Statute Law Repeals - Law Commission - Ministry of Justice

3.30 Construction commenced in 1856 but, after not a great deal of progress,
concerns were voiced as to the economic viability of the enterprise (whether the
5% guaranteed return was disproportionate to the escalating cost of
construction), culminating in parliamentary questions in 1860. The government -
through the Secretary of State for the Colonies - subsequently annulled the
contract and took over all the company’s assets and liabilities. The Ceylon
Railway Company’s Dissolution Act 1862 30 made provision for the company’s
formal dissolution (which necessitated specific legislation). The company was to
pay its undistributed capital residue into the Bank of England (to be held to the
order of the Court of Chancery, which would authorise payment out to entitled
shareholder claimants). The dissolution arrangements were not to interfere with
the property and rights acquired by the Ceylon government. 31
3.31 Once the government had taken over the company’s assets it set about fulfilling
construction of a railway system for the island by inviting tenders from interested
building contractors and taking over three existing contracts, one with Robert
Stephenson & Co., locomotive engineers. From there on in the railway network in
Sri Lanka has been a state enterprise. The 1862 Act (like that of 1856) is now
spent, and can be repealed.
East Indian Railway Company
3.32 The East Indian Railway Company was formed provisionally in June 1845 as a
joint stock company, and then incorporated by statute in August 1849. Its
purpose was to acquire lands in the East Indies and Great Britain, to construct
and operate one or more railways in India, and to undertake a range of ancillary
functions (which were to include mineral and iron working, coal mining, furnace,
forge and smelting operation, and gas manufacture).
30 25 & 26 Vict. c.ci (1862) (“The 1862 Act”).
31 The 1862 Act, ss 3, 4.
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