Whereas the Central Government is of opinion that
for the more efficient carrying on of general insurance business it is
necessary to frame a scheme for the merger of certain Indian Insurance
Companies in the National Insurance Company Limited; Now, therefore, in exercise of the powers on
referred by sub-section (1) of section 16 of the General Insurance Business
(Nationalisation) Act, 1972, (57 of 1972) the Central Government hereby frames
the following Scheme, namely:- (1) This Scheme may be called the National Insurance Company Limited
(Merger) Scheme, 1973. (2) It shall come into force on the 1st day of January, 1974. (1) In this Scheme, unless the context otherwise requires,- (a) "Act" means the General Insurance Business (Nationalisation)
Act, 1972 ( 57 of 1972); (b) "merged company" means a company specified in the First
Schedule; (c) "Schedule" means a schedule appended to this scheme; (d) "specified day" means the 1st day of January, 1974; (e) "transferee company" means the National Insurance Company
Limited. (2) Words and expressions used in this Scheme and not defined herein or in
the Act but defined in the Insurance Act shall have the meanings respectively
assigned to them in the Insurance Act. (3) Words and expressions used in this Scheme and not defined herein or in
the Act or in the insurance Act but defined in the Companies Act shall have the
meanings respectively assigned to them in the Companies Act. (1) On and from the specified day, the undertaking of every merged company
shall stand transferred to and vested in the transferee company. (2) The undertaking of every merged company shall be deemed to include all
assets, rights, powers authorities and privileges and all property, movable and
immovable, cash balances, capital and reserve funds, investments and all other
rights and interests in or arising out of such property, as were immediately
before the specified day in the ownership, possession, power or control of such
merged company, whether or within or without India and all books of accounts,
registers, records and all other documents of whatever nature relating thereto;
and shall be deemed to include all borrowings, liabilities and obligations of
whatever kind then subsisting of the merged company. (3) All profits accruing or losses arising or incurred by merged company on
or after the 1st day of January1973, shall, for the purpose this scheme for all
other purposes, be deemed to be the profits or losses, as the case may be, of
the transferee company. (4) Notwithstanding the dissolution of a merged company, the auditor of the
merged company appointed under section 619 of the Companies Act and holding
office immediately before such dissolution, shall continue in office, examine
the accounts of the merged company for the year ending 31st December, 1973 and
submit a report of such examination, in accordance with the provisions of
section 227 of the Companies Act, to the transferee company. (5) On receipt of the audited accounts of all merged companies, the
transferee company shall prepare, for the year ending 31st December, 1973, one
consolidated set of accounts, namely, Revenue Accounts, Profit and Loss
Account, Profit and Loss Appropriation Account, and Balance-Sheet, as required
by section II of the Insurance Act, in respect of all general insurance
business transacted by the transferee company and the merged companies during
that year. (6) All items of miscellaneous expenditure shown in the accounts or a merged
company and not written of or adjusted, and all debit balances of the Profit
and Loss Account of the merged company, as on the 31st day of December, 1972,
which have been carried forward in the balance-sheet of the merged company
shall be debited to the Profit and Loss Account prepared under sub-paragraph
(5) and shall be a charge on, and shall set of against, the profits of the
transferee company as shown in the said consolidated accounts. (1) All deeds, bonds, agreements, powers-of-attorney, grants or legal
representation and other instruments of whatever nature subsisting or having
effect immediately before the specified day and to which any merged company is
a party or which are in favour or such merged company shall be of as full force
and effect against or in favour of the transferee company and may be enforced
or acted upon as fully and effectually as if in the place of such merged
company the transferee company had been a party thereto or as if they had been
issued in its favour. (2) If on the specified day any suit, appeal or other proceeding of whatever
nature is pending by or against any merged company or the Custodian in charge
of the management of such merged company, the same shall not able, be
discontinued or be in any way prejudicially affected by reason of the transfer
of the merged company under paragraph 3 or of anything contained in this
Scheme, but the suit, appeal or proceeding may be continued, prosecuted or
enforced by or against the transferee company. Every whole-time officer or other employee of any
merged company who was employed by such company immediately before the
specified day shall on and from that day become an officer or other employee,
as the case may be, of the transferee company and shall hold his office or
service under the transferee company on the same terms and conditions and with
the same rights as to pension, gratuity and other matters as would have been
admissible to him if there had been no such transfer as referred to in
paragraph 3 and shall continue to do so, unless and until his employment in the
transferee company is terminated or until his remuneration, terms and
conditions are duly altered by the transferee company or by any other scheme
framed under the Act. Where a provident fund established by a merged
company for the benefit of its employees is in existence immediately before the
specified day, the said fund shall, notwithstanding the fact that the merged
company is to cease to exist on and from the specified day, continue on and
from the said day for the benefit of employees covered by the fund and the fund
shall also continue to be governed by the rules with which it would have been
governed had not the merged company ceased to exist, unless and until the said
rules are duly altered by the transferee company or under any other scheme
framed under this Act. (1) Where a merged company has established a superannuation, welfare or any
other fund (other than a provident fund) for the benefit of its employees and
constituted a trust in respect thereof (hereinafter in this paragraph referred
to as an existing trust), the monies standing to the credit of such fund on the
specified day shall stand transferred to and vested in the transferee company
on such day free from any such trust. (2) The transferee company shall, as soon as may be after the specified day,
constitute in respect of the monies and other assets which are transferred to
and vested in it under sub-paragraph (1) one, or more trusts having objects as
similar to the objects of the existing trust as in the circumstances may be
practicable. (3) Where all the monies and other assets belonging to an existing trust are
transferred to and vested in the transferee company under this paragraph, the
trustees of such trust shall, as form the specified day, stand discharged from
the trust, except as respects things done or omitted to be done before the
specified day. (1) A merged company shall, on the specified day, stand dissolved without
winding up. (2) The transferee company shall, as soon as may be practicable after the
specified day, give an intimation to the Registrar of Companies of the State in
which the registered office of a merged company is situated as to the
dissolution of the merged company and on receipt of such intimation, the
Registrar of Companies shall make the necessary entries in his records and
strike the name of the dissolved company of the register of companies. (3) Notwithstanding the dissolution of a merged company, the Board of
Directors of the transferee company shall, as soon as may be, after the
specified day, prepare, get audited and lay before the transferee company at
its general meeting, a balance-sheet and profit and loss account of the merged
company in respect of any calendar year preceding the calendar year 1973 for
which the balance sheet and profit and loss account have not been laid before
the merged company, and such account or accounts shall be dealt with in the
same manner as the merged company would have dealt with such account or
accounts shall be dealt with in the same manner as the merged company would
have dealt with such account or accounts had not the merged company been so
dissolved. The shares of the transferee company and of the
merged companies, in force immediately before the specified day, shall, on and
from that day, stand cancelled and all rights and obligations there under shall
stand extinguished without prejudice to the rights conferred by sub-section (5)
of section 4 of the Act. On and from the specified day the transferee
company shall issue new shares in lieu of the shares which stand cancelled
under paragraph 9 and for this purpose the authorized capital of the transferee
company shall be rupees twenty crores divided into (a) three crore equity shares of five rupees each; and (b) five lakhs preference shares of one hundred rupees each. (1) Out of the authorized capital the transferee company shall issue
fifty-eight lakh, six thousand and ninety equity shares, which shall be deemed
to be fully paid-up. (2) Out of the issued capital, there shall be allotted to every person,
registered immediately before the specified day on the register of members of either
the transferee company or of any one or more of the merged companies shares in
the transferee company issued under sub-paragraph (1), and such allotment shall
be made in proportion to the total amount paid up on the shares held by such
person, immediately before the specified day, in the transferee company or in
one or more of the merged companies. Notwithstanding anything contained in the
Memorandum of Association and the Articles of Association of the transferee
company, on or after the specified day neither the share capital of the
transferee company shall be reduced, nor any further capital shall be issued by
the transferee company except with the prior consent of the Central Government. The Memorandum of Association and the Article of
Association of the transferee company shall, on and from the specified day,
stand altered as set out in the Second Schedule. The provisions of the Companies Act, in so far as
they relate to the retirement of directors by rotation, shall not apply in
respect of the Directors of the transferee company. In the event of there being any inconsistency
between any provision of the Articles of Association of the transferee company
as has not been altered by paragraph 13 and any provision of the Articles as
altered by the said paragraph or of this Scheme, the Article as so altered, or
this Scheme, as the case may be, shall prevail. [See paragraph 2(b)] Merged Companies (1) Calcutta Insurance Limited. (2) Clive Insurance Company Limited. (3) General Assurance Society Limited. (4) Hindusthan General Insurance Society Limited. (5) Hukumchand Insurance Company Limited. (6) India Reinsurance Corporation Limited. (7) Neptune Assurance Company Limited. (8) Ruby General Insurance Company Limited. (9) Triton Insurance Company Limited. (See paragraph 13) Alteration of Memorandum of Association and Article
of Association of the National Insurance Company Limited PART I 1.
The Memorandum of Association In paragraph III of the Memorandum of Association of
the National Insurance Company Limited (herein after referred to as the said
Memorandum) (a) for clause (12), the following clause shall be substituted, namely :- "(12) To
underwrite, undertake and subscribe for conditionally or unconditionally,
stock, shares, debentures and other securities whether marketable or otherwise
of any other Company." (b) clause (15) shall be omitted: (c) after clause (17), the following clauses shall be inserted, namely :- "(18) To pay,
satisfy or compromise any claims made against the Company in respect of any
contracts of insurance granted by, dealt in or entered into by the Company
which claims the company may deem it expedient to pay, satisfy or compromise
notwithstanding that the validity thereof at law may be disputable and to revive
any contracts that may have become void or lapsed on such terms and conditions
and in such case as may be deemed expedient or in lieu of reviving any such
contract or make any other concession in favour of the persons or any of the
persons entitled to such contract. (19) Generally to
carry on, undertake or transact all kinds of trust or agency business including
that of the Government or local authority either gratuitously or a otherwise
and without prejudice to the generality of the premises to act as and undertake
the duties of an executor or administrator of estates, trustees of wills and
settlement and or trust deeds or other instruments constituting debentures,
debenture stocks, bonds and other securities and to act as and undertake the
duties of a custodian, trustee, a trustee for charitable or other institution,
a trustee for pension, benevolent or other funds, and generally to act in a
fiduciary capacity of any sort including the undertaking of all duties normally
undertaken by a trust corporation either with or without remuneration. (20) To contract
with property holders, borrowers, lenders, annuitants and others for the
establishment of accumulation provision and payment of sinking funds,
redemption funds, depreciation funds, renewal funds, endowment funds, and any
other special funds and that either in consideration of a single payment or of
annual or other periodical payments or otherwise and generally on such terms
and conditions as may be arranged. (21) To carry on
any other business which may seem to the Company capable of being conveniently
carried on in connection with its objects or calculated directly or indirectly
to enhance the value of or render profitable any of the Company's business,
property or rights. (22) To acquire
and deal with the shares, stocks or securities in or of any Company carrying on
any business which this Company is entitled to carry on or of any other Company
or undertaking the acquisition of which may seem likely or calculated directly
or indirectly to promote or advance the business of the Company or be
advantageous or beneficial to the Company and to continue to hold any shares in
any such Company heretofore acquired by the Company and to sell or dispose of
and transfer any such shares, stocks, or securities. (23) To provide
for the amelioration and welfare of persons employed or formerly employed by
the Company and the wives, widows, families, dependents or connections of such
persons by building or contributing to the building of houses, dwellings or
chawls or any grants of money, pensions, allowances, bonuses, or other payments
or by creating and from time to time subscribing or contributing to Provident
and other Funds, Associations, Institutions or Trusts or by helping persons
employed by the Company to effect or maintain insurance on their lives by
contributing to the payment or otherwise, and by providing or subscribing or
contributing towards places of instructions and recreation, hospitals and
dispensaries medical and other attendance and other assistance as the company
shall think fit. (24) To dedicate,
present, subscribe to or otherwise aid out of the profits and/or assets of the
Company benevolent, charitable, national or other institutions or objects of a
public character, or which have any moral or other claims to support or aid by
the Company by reason of the locality or nature of its operations or otherwise. (25) To make,
draw, accept, endorse, discount, execute and issue cheques, promissory notes,
bills of exchange, bills of lading, warrants, debentures and other negotiable
or transferable instruments. (26) To do all or
any of the above things, and all such other things as are incidental or as may
be thought conducive to the attainment of the above objects or any of them in
India or at any other part of the world, either as principals, agents,
trustees, contractors or otherwise, and either by or through agents,
contractors, trustees or otherwise, and either by or through agents,
contractors, trustees or otherwise and either alone or in conjunction with others". 2.
For paragraph V of the said Memorandum, the
following paragraph shall be substituted, namely:- "V. The
shares capital of the Company shall be rupees twenty crores divided into: (a) three crore equity shares of five rupees each ; and (b) five lakhs preference shares of one hundred rupees each with the rights,
privileges and conditions attaching thereto as are provided by the Articles of
Association of the Company for the time being and with power to increase and
reduces the capital of the company and to divide the shares in the capital for
the time being into several classes and to attach thereto respectively such
preferential, deferred, qualified or special rights, privileges or Conditions
as may be determined by or in accordance with the Article of Association of the
Company for the time being and to vary, modify or abrogate any such rights,
privileges or Conditions in such manner as may be permitted by the Companies
Act 1956 (1 of 1956) or Provided by the Article of Association of the Company
for the time being". PART II The Article of Association 1.
In the Article of Association of the National
Insurance Company Limited (hereinafter referred to as the said Articles): (a) for the words "Members' Directors" and "members
'Directors", the words "Directors" shall be substituted: (b) for the words "members' Director", the word
"Director" shall be substituted. 2.
In Article 1 of the said Articles:- (a) in the definition of "The Directors", the words "and
shall unless excluded by or repugnant to the context or subject mean and
include both members ' Directors and Policy holders 'Directors" shall be
omitted. (b) in the definition of "The Directors", and "Policy
holders' Directors" shall be omitted. 3.
For Article 4 of the said Articles, the following
Articles shall be substituted, namely:- 4.
CapitalThe share capital of the Company shall be
rupees twenty crores divided into : (a) three crore equity shares of five rupees each ; and (b) five lakh preference shares of one hundred rupees each." (c) Article 61 of the said Articles shall be omitted. 5.
For Article 90 of the said Articles, the following
Article shall be substituted, namely: "90.Chairman
The Directors may elect a Chairman of their meetings and determine the period
for which he is to hold office; but if no Chairman is elected, or if at any
meeting the Chairman is not present at the time appointed for holding the same,
the Directors present shall choose one from among those present to be Chairman
of such meeting." 6.
For Articles 110 to 117 (both inclusive) of the
said Articles, the following Articles shall be substituted, namely: "110.
Constitution of the Board of Directors. The Board of Directors shall consist of not less
than four and not more than eleven Directors, including a whole-time
Chairman-cum-Managing Director. 111. Appointed and
term of office of Directors, etc. (1) The Directors shall be appointed, with the previous approval of the
Central Government, by the Chairman of the General Insurance Corporation of
India [hereinafter in this Article and in Article 112 referred to as the
Chairman (GIC)]. (2) The term of office of every Director shall be two years from the date of
his appointment: Provided that the Chairman (GIC) may, with the
previous approval of the Central Government, extend the term of office of a
Director by a further period not exceeding two years at a time. (3) The Chairman (GIC) may, with the previous approval of the Central
Government, fill up any vacancy caused by death, resignation, retirement or
otherwise of a Director. (4) A director appointed under clause (3) shall hold office only for the
remainder of the term of office of the Director in whose place he is appointed
: Provided that the Chairman (GIC) may, with the
previous approval of the Central Government, extend the term of office of the
Director appointed under clause (3) by a further period not exceeding two years
at a time. 112. Removal of
Directors. If the Chairman (GIC) considers it necessary, in
the interests of the Company so to do, he may, with the previous approval of
the Central Government, remove a Director from office before the expiry of the
term of his office as such Director: Provided that no Director shall be removed from his
office unless he has been given a reasonable opportunity of showing cause
against the proposed action. 113. Share
qualification. A Director shall not be required to hold any
qualification shares. 114. Conditions of
service, etc., of Directors. The Conditions of service of, or the remuneration
payable to a Director shall be such as may be fixed from time to time by the
General Insurance Corporation of India with the previous approval of the
Central Government. 7.
In Article 118 of the said Articles, the words
"or for the purpose of filling up vacancies" shall be omitted. 8.
In Article 119 of the said Articles clause (a)
including the word "or" occurring at the end, and clause (b)
including the word "or" occurring at the end, shall be omitted. 9.
Articles 120 to 133 (both inclusive) of the said
Articles shall be omitted. 10. For Article 135 of the said Articles, the following Article shall be
substituted, namely :- "135.
Directors may summon meeting. Three Directors may at any time require the manager
to summon a meeting of the Board of Directors by giving all the Directors four
clear days' notice in writing specifying the object of such meeting." 11. For Articles 137 and 138 of the said Articles, the following Article
shall be substituted, namely:- "137.Quorum. Three Directors shall form a quorum." 12. In Article 144 of the said Articles, clause (d) and the words "or
of the policyholders" shall be omitted. 13. Article 151 of the said Articles shall be omitted. 14. In Article 157 of the said Articles, the portion commencing with the
words "And the Company" and ending with the words "requirements
of any local law" shall be omitted. 15. Articles 160 to 165 (both inclusive) of the said Articles shall be
omitted. 16. In Article 185 of the said Articles, for the words "President or
Vice-President", the word "Chairman" shall be substituted. 17. In Article 188 of the said Articles, for the word "President",
the word "Chairman" shall be substituted. 18. In Article 190 of the said Articles, the words and figures "unless
copies are sent to him under Article 192"shall be omitted. 19. Articles 191 to 193 (both inclusive) of the said Articles shall be
omitted. 20. In Article 200 of the said Articles, the word "British"
shall be omitted. NATIONAL
INSURANCE COMPANY LIMITED (MERGER) SCHEME, 1973
PREAMBLE