Statute Law Repeals - Law Commission - Ministry of Justice

3.19 In December 1905 the Indian government purchased the railway infrastructure
under the terms of the guarantee contract, 15 but the company retained
responsibility for operational aspects (through its continuing ownership of rolling
stock and equipment) until 1941 - at which point the partnership arrangement
was dissolved by the state. 16
3.20 Under the contracts prior to 1905 the Secretary of State was liable to pay some
£11.68 million by way of purchase price, together with the debenture sums when
due but, by 1905, circumstances for government had changed. The 1905 contract
varied the arrangement so that the Secretary of State could issue to the company
3% India Stock 17 to the value of just over £10 million (with quarterly interest) and
then make additional half-yearly payments whilst the company maintained and
operated the railway system.
3.21 The Bombay Baroda and Central India Railway Act 1906 18 was designed to
provide authority to issue and regulate the handling of new stock, to make proper
provision for the realisation and distribution of railway property (including that
which was not to be sold to the Secretary of State), and to empower the company
to operate railways within its own system and in any part of India. The company’s
own system embraced five “state railways” 19 which were run in conjunction with
those of three other railway companies. The 1906 Act repealed three previous
Acts relating to the company - 1855, 1859 and 1898 - subject to preserving the
name and composition of the original company.
3.22 By 1924 the company, having been reincorporated with £2M initial capital and
having distributed the issued India 3% stock, was still maintaining, managing and
working the railway system on the government’s behalf. The 1906 Act
arrangements required some practical adjustment. The Bombay Baroda and
Central India Railway Act 1924 20 provided for, amongst other matters, a reduction
in the number of stockholder meetings and the quoracy requirements for such
meetings, authorisation of an interim dividend, and the combining of stockholder
registered details.
15 The transfer of railways and works included all lands provided to the company under the
various contracts. The sale took place under a further contract of 1905.
16 In 1951 (post-independence) the management of the Bombay Baroda and Central India
Railway network was merged with the state-owned Saurashtra, Rajasthan and Jaipur
Railways to form the western zone of Indian Railways.
17
The stock was issued in accordance with the East India Loans (Railways) Act 1905 (5
Edw.7 c.19) (repealed in 1937).
18 6 Edw.7 c.lix (1906).
19 See the 1906 Act, s 27 and Sch F.
20 14 & 15 Geo.5 c.vii (1924).
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