The British India Corporation Limited (Acquisition of Shares) Act, 1981

Summary of The British India Corporation Limited (Acquisition of Shares) Act, 1981
Purpose: To acquire certain shares of the British India Corporation Limited (BICL) to ensure proper management, continuity, and development of its vital woolen fabric production for national needs.
Key Points:
1. Company in Question: British India Corporation Limited, Kanpur, engaged in manufacturing pure and blended woollen fabrics.
2. Reason for Acquisition: - Ensure proper management of the company.
• Secure continuity and development of vital woolen fabric production.
• Previous investments by public financial institutions and the Central Government required further investment for modernization and development.
3. Acquisition Details: - Acquisition by the Central Government of effective control through share acquisition.
• Exemptions from Acquisition: Shares held by the Central Government, State Governments, State Bank of India, Life Insurance Corporation of India, Unit Trust of India, and certain nationalized banks.
4. Provisions (Outlined but not detailed in the provided context):
• Transfer and vesting of shares in the Central Government.
• Management of the Company.
• Payment of amounts to shareholders.
• Appointment of a Commissioner of Payments.
• Claims and disbursement process.
• Inspection and dispute resolution powers.
5. Effective Date: Deemed to have come into force on 11th June 1981.

Legislative History:

The British India Corporation Limited (Acquisition of Shares) Act, 1981

● Act Title - The British India Corporation Limited (Acquisition of Shares) Act, 1981

● Act Number / Year - 29 of 1981

● Act ID (India Code) - 198129

● Presidential Assent Date - September 11, 1981

● Enforcement Date - June 11, 1981

● Nodal Ministry - Ministry of Textiles

Precedent & Historical Rationale

● Nationalisation of Historical Textile Conglomerate - The British India Corporation (BIC) Limited, Kanpur, was a premier colonial-era industrial conglomerate controlling major woolen and cotton textile mills, including Cawnpore Woollen Mills (Lalimli) and New Egerton Woollen Mills (Dhariwal). Financial mismanagement, mounting debts, and severe operational sickness threatened the total collapse of these manufacturing centers.

● Public Investment Protection & Worker Rehabilitation - Prior to 1981, the Central Government and public financial institutions already held a significant minority stake in the corporation. To prevent liquidation, protect the employment of thousands of textile workers, secure national wool manufacture capacity, and enable direct state capital infusion for modernization, the Act provided for the compulsory acquisition of all privately held shares, turning BIC into a wholly owned Central Public Sector Undertaking (CPSU).

Parliamentary Trajectory & Enactment

● Formulation - Introduced by the Union Ministry of Commerce (Department of Textiles) to replace the British India Corporation Limited (Acquisition of Shares) Ordinance, 1981 (Ordinance 5 of 1981) promulgated by President N. Sanjiva Reddy on June 11, 1981.

● Parliamentary Passage - Debated and passed by both Houses of Parliament (Seventh Lok Sabha and Rajya Sabha) during the monsoon session in August–September 1981.

● Presidential Assent - Received Presidential Assent on September 11, 1981.

● Enforcement - Enforced on June 11, 1981.

Source - Official Record of Parliament, India Code, and Ministry of Textile.