Act 020 of 1918 : Companies (Foreign Interests) Act, 1918

Section 1. Short title

1. Short title.-This Act may be called the Indian Companies (Foreign Interests) Act, 1918.

Section 2. Definitions

2. Definitions.-(1) In this Act-

¹[(a) the expression "Commonwealth citizen" has the same meaning as in Section 1 of the British Nationality Act, 1948, but shall include any association incorporated in any part of the Commonwealth including India];

(b) the expression "restrictive provision" means any provision in the articles of association of a company which, in the opinion of the ²[Central Government], is designed to restrict or limit or has the effect of restricting or limiting the share or shares or interest which may be held, or the rights, powers or authority which may be conferred upon or exercised by or on behalf of persons other than ³[commonwealth citizens] in the company, or in respect of the control, management or direction of the affairs thereof.

(2) All words and expressions used in this Act and defined in the Indian Companies Act, 7 of 1913, shall be deemed to have the meanings respectively attributed to them by that Act.

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Prior to amendment by A.L.O., 1950 Section 2 read as:

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2. Definitions.-(1) In this Act-

(a) the expression "British subject" has the same meaning as in Section 27 of the British Nationality and Status of Aliens Act, 1914, but shall include any person who holds a certificate of naturalization as a British subject granted under any Act of the Governor-General in Council for the time being in force, and any association incorporated in any part of His Majesty's dominions: Provided that the said expression shall, for the purposes of this Act, be deemed to apply to any subject of a State in India;

(b) the expression "restrictive provision" means any provision in the articles of association of a company which, in the opinion of the Governor-General in Council, is designed to restrict or limit or has the effect of restricting or limiting the share or shares or interest which may be held, or the rights, powers or authority which may be conferred upon or exercised by or on behalf of persons other than British subjects in the company, or in respect of the control, management or direction of the affairs thereof.

(2) All words and expressions used in this Act and defined in the Indian Companies Act, 7 of 1913, shall be deemed to have the meanings respectively attributed to them by that Act.

Section 3. Application of Act

3. Application of Act.-This Act shall apply to such companies as the ¹[Central Government] may, by notification in the ²[Official Gazette], declare to be companies with restrictive provisions, and any such notification shall specify the restrictive provisions.

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Prior to amendment by A.O., 1937 Section 3 read as:

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3. Application of Act.-This Act shall apply to such companies as the Governor-General in Council may, by notification in the Gazette of India, declare to be companies with restrictive provisions, and any such notification shall specify the restrictive provisions.

Section 4. Alterations in restrictive provisions and winding up

4. Alterations in restrictive provisions and winding up.-So long as a notification issued under Section 3 is in force in respect of any company, notwithstanding anything to the contrary in any other-

(1) no alteration of the articles of association of the company affecting either directly or indirectly any restrictive provision shall be of any effect until it has received the consent in writing of the ¹[Central Government];

(2) a resolution for the voluntary winding up of the company shall be of no effect unless the ²[Central Government] authorizes or ratifies it by a written consent;

(3) any Court which has jurisdiction to wind up the company may, in its discretion, refuse to make a winding up order. In the exercise of its discretion the Court shall be guided by the consideration whether the winding up is bona fide with a view to the discontinuance of the undertaking, or is with a view to continuing the undertaking freed either wholly or in part from any restrictive provision;

(4) the ³[Central Government] in giving consent, or the Court in making a winding up order, as the case may be, may impose such terms or conditions for giving effect to the purposes of this Act as ⁴[* * *] it thinks fit.

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Prior to amendment by A.O., 1937 Section 4 read as:

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4. Alterations in restrictive provisions and winding up.-So long as a notification issued under Section 3 is in force in respect of any company, notwithstanding anything to the contrary in any other-

(1) no alteration of the articles of association of the company affecting either directly or indirectly any restrictive provision shall be of any effect until it has received the consent in writing of the Governor-General in Council;

(2) a resolution for the voluntary winding up of the company shall be of no effect unless the Governor-General in Council authorizes or ratifies it by a written consent;

(3) any Court which has jurisdiction to wind up the company may, in its discretion, refuse to make a winding up order. In the exercise of its discretion the Court shall be guided by the consideration whether the winding up is bona fide with a view to the discontinuance of the undertaking, or is with a view to continuing the undertaking freed either wholly or in part from any restrictive provision;

(4) the Governor-General in Council in giving consent, or the Court in making a winding up order, as the case may be, may impose such terms or conditions for giving effect to the purposes of this Act as he or it thinks fit.