Statute Law Repeals - Law Commission - Ministry of Justice

3.66 The 1853 Act was the first of five statutes promoted to establish and reinforce the
Madras Railway Company’s operation. In August 1853 the railway company
agreed with the East India Company that the “experimental line” should be
extended further towards the west coast, and that branch lines should be
constructed to Bangalore and to the foothills near Ootacamund (now
Udhagamandalam), which amounted to a significant enhancement of the original
scheme. The East India Company were also interested in a link to Madras on the
east coast. By 1854 the railway company had embarked on construction of the
first phase, but it required additional statutory powers. The Madras Railway
Company Act 1854 71 authorised the railway company to contract with the
government of India to extend the experimental line to the western coast of India
and to build the two branchlines, to increase its capital to an uncapped sum (by
further share creation), and to extend its borrowing power to a specified ceiling.
3.67 In June 1855 the railway company was almost ready to contract with government
to undertake the western extension project, but it lacked sufficient take-up of its
shares in Great Britain. In order to raise working capital in the East Indies, and
concerned that the project was “of great public importance” and should proceed
without delay, the company promoted what was to become the Madras Railway
Act 1855. 72 The Act, amongst other things, enabled the railway company to issue
and register share transfers in Indian offices and to issue debentures, and it
required the company to contribute its net profits to the Indian government to
compensate for the interest payable under the capital guarantee scheme. 73
3.68 In April 1907, pursuant to the provision in the original 1853 Act, the Secretary of
State in Council of India gave notice to the railway company of his intention to
purchase the entire railway and telegraph network. Prior to the transfer date (31
December 1907) the company had established various funds, including a
provident fund and a charitable grant fund. On transfer the government became
responsible for these funds and for redemption of the debenture loans and
interest. Instead of making a single payment for the undertaking the government
opted to pay by annuity instalments, commencing in April 1908 and terminating in
April 1956. 74
71 17 & 18 Vict. c.xxix (1854).
72 18 & 19 Vict. c.xl (1855).
73 The Indian Railway Companies Act 1868 (c.26) (see above) enabled the Madras Railway
Company, amongst others, to raise further moneys by debenture stock.
74
This period tied-in with the residue of the original 99 year lease which ran from 1857
onwards.
131