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  THE INDIAN COMPANIES (FOREIGN INTERESTS) ACT, 1918

  ACT NO. 20 OF 1918

 [26th September, 1918.]

An Act to take power to prohibit the alteration, except with  the sanction of  1[the Central Government], of  articles  of  association which restrict foreign interests in certain Companies, and to  provide for other purposes connected therewith.

      WHEREAS it is expedient to take power to prohibit the alteration, except with the sanction of 1[the Central Government], of articles  of association which restrict foreign interests in certain companies, and to  provide  for  other purposes connected therewith ; It  is  hereby enacted as follows:-

 1. Short title.

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

  2. Definitions.

     2.Definitions. (1) In this Act-

     2[(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 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 4 Indian Companies Act, 1913,( 7 of 1913) shall be deemed to  have  the meanings respectively attributed to them by that Act.

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    1 Subs. by the A. O. 1950 for "the G. G. in C.".

    2 Subs., ibid., for cl. (a).

    3 Subs., ibid., for "British subjects".

4 Now see the Companies Act, 1956 (1 of 1956).

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 Application of Act.

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

    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 Act-

        (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 Central Government;

       (2)   a  resolution  for  the voluntary  winding  up  of  the company  shall be of no effect unless the 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 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 1[it] thinks fit.

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    1 Subs. by the A. O. 1937 for "he or it".

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