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| AIR CEYLON |
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AN ACT TO ESTABLISH A CORPORATION FOR THE OPERATION OF AIR TRANSPORT SERVICES, TO PROVIDE FOR GOVERNMENT INVESTMENT IN ITS CAPITAL AND GENERALLY TO PRESCRIBE AND REGULATE THE FUNCTIONS AND POWERS OF THE CORPORATION.
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[15th March
, 1951 ]
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Short title and date of operation.
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1. This Act may be cited as the Air Ceylon Act, and shall come into operation on the 15th day of March, 1951, (hereinafter referred to as the ” appointed date”).
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| ESTABLISHMENT AND POWERS OF CORPORATION, MEMBERSHIP, AND CAPITAL |
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Establishment of “Air Ceylon ” corporation.
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2.
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(1) There shall, on the appointed date or as soon as may be thereafter, be established a corporation to be called and known as ” Air Ceylon Limited “.
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(2) The corporation shall consist of the persons for the time being holding office as members thereof in accordance with the provisions in that behalf contained in this Act.
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(3) The corporation shall have perpetual succession and a common seal and may sue and be sued in its corporate name.
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(4) The corporation shall have power to acquire and hold land and to dispose of land so acquired or held.
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(5) The head office of the corporation shall be at Colombo or at such other place in Ceylon as may be approved by the Minister in that behalf.
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Functions and powers of the corporation.
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3.
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(1) It shall be the duty of the corporation, subject as hereinafter provided, to secure the fullest development, consistent with economy, of efficient air transport services to be operated by the corporation and to secure that such services are operated at reasonable charges.
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(2) The corporation is hereby empowered and authorized, subject as hereinafter provided, either in connexion with the discharge of their duty under the preceding subsection or as an independent activity –
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(a) to operate air transport services in Ceylon or to and from Ceylon, including intermediate points, or otherwise howsoever, whether scheduled, non-scheduled or on charter terms ;
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(b) to undertake flights for the purposes which the corporation may consider necessary, including purposes of aerial survey ;
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(c) to undertake and make arrangements for the instruction and training in matters connected with air transport of persons employed, or desirous of being employed, whether as pilots or in any other capacity, either by the corporation or by other persons ; and
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(d) to carry out maintenance, repair and overhaul of aircraft.
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(3) The corporation shall have power, subject as hereinafter provided, to do anything which is calculated to facilitate the discharge and performance of the functions and duties conferred or imposed by the preceding provisions of this section or which is incidental or conducive thereto, including in particular, but without prejudice to the generality of those provisions, power –
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(a) to acquire or hire aircraft, and to acquire parts of aircraft and aircraft equipment and accessories ;
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(b) to acquire, establish and maintain aerodromes, landing grounds, seadromes, riverdromes, and flying-boat bases in Ceylon or elsewhere ;
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(c) to acquire, establish and maintain buildings and maintenance, repair and overhaul shops ;
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(d) to acquire lights, beacons, wireless installations and other plant and equipment;
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(e) to manufacture parts of air-frames and of aero- engines and aircraft equipment and accessories ;
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(f) to sell, let or otherwise dispose of any property belonging to them and not in their opinion required for the proper discharge of their functions;
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(g) to transport passengers, goods and mails and to impose and recover charges for such transport ;
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(h) to enter into contracts with the Postmaster-General for the transport of mails by air upon terms to be provided for in such contracts ;
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(i) to enter into arrangements, agreements or contracts for establishing or maintaining air transport services to be operated, in collaboration with the corporation or otherwise, by other persons, or any arrangement for the pooling of receipts or profits with other persons operating air transport services ;
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(j) to act as agents for any other undertaking engaged in the provision of air transport services, or in other activities of a kind which the corporation has power to carry on ;
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(k) to provide accommodation for passengers, crew and other personnel in hotels or otherwise, and facilities for their transport to or from aerodromes, and for the collection, delivery and storage of baggage and freight; and to make, with persons carrying on the business of providing any facilities for passengers, crew or other personnel or freight, in connexion with air transport services, arrangements for the provision of such facilities ;
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(l) to acquire any undertaking engaged in the provision of air transport services or in other activities of a kind which the corporation has power to carry on, or to acquire, hold or have any shares or stock of, or any financial interest in, any such undertaking ;
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(m) to carry out experimental work, and conduct, promote and encourage education and research in matters connected with any of their functions under this Act;
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(n) to acquire land or buildings and to establish and maintain hotels, restaurants and similar establishments for any purposes herein before specified ;
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(o) to acquire and maintain all such plant, machinery, vehicles and other goods or equipment as may be required for any of the purposes herein before specified ;
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(p) to carry on the business of the purchase and sale of goods and commodities ;
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(q) to appoint such advisory boards or committees, and such local boards or committees, with such executive or other functions and upon such terms as to remuneration and otherwise, as the corporation may deem expedient;
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(r) to enter into agreements with the Government of any country.
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(4) The Minister may by Order authorize the corporation, subject to such conditions as may be specified in the Order, to carry on any undertaking or business or to do any act or thing not mentioned in the preceding provisions of this section, if he is satisfied that it is expedient so to do for purposes connected with the efficient discharge and performance of the powers and duties conferred or imposed on the corporation by such preceding provisions.
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(5) Every Order made under subsection (4) shall be brought before the Senate and the House of Representatives for approval, and if so approved shall be published in the Gazette, and come into force on the date of such publication.
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Control of Minister over certain activities.
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4. The corporation shall not, except with the approval of the Minister, or in accordance with the terms of any general authority given by him-
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(a) undertake any flight for the purpose of aerial survey, except in connexion with the development of an air transport service operated or proposed to be operated by the corporation ; or
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(b) exercise any of the powers conferred on the corporation by paragraph (i) or (p) or (q) of subsection (3) of section 3 of this Act, or, except in relation to persons employed, or desirous of being employed, by the corporation, the power conferred on them by paragraph (c) of subsection (2) of that section.
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Power of the Minister to issue directions to the corporation.
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4A. The Minister maw from time to time, either of his own motion or after consultation with the corporation, give to the corporation in writing general or special directions as to the performance of its duties and the exercise of Its powers, and the corporation shall give effect to such directions “.
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Capital.
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5.
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(1) The authorized capital of the corporation shall be fifteen million rupees.
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(2) The House of Representatives may by resolution increase the authorized capital to such amount as may be specified in the resolution.
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Government contribution of capital.
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6.
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(1) The Government shall, as soon as may be after the appointed date, make an initial contribution of one million and twenty thousand rupees to the capital of the corporation.
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(2) The assessed value of the assets transferred to the corporation by section 30 shall be set off in reduction of the amount of the initial contribution specified in subsection (1), and the amount of the deficiency, if any, shall be payable to the corporation by the Government.
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(3) The corporation may from time to time, with the approval of the Minister, given with the concurrence of the Minister of Finance, call up further contributions to the capital from the Government; and the amount of any such further contribution shall be payable to the corporation by the Government: Provided that if the assessed value of the assets transferred to the corporation by section 30 exceeds the amount of the initial contribution specified in subsection 1), the amount of the excess shall be deemed to be a further contribution of capital by the Government.
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(4) The payment of any amount declared by the preceding provisions of this section to be payable by the Government to the corporation is hereby charged on the Consolidated Fund ; and such, payment shall be made out of that Fund to the corporation in accordance with the provisions of section 67 of the Ceylon (Constitution) Order in Council, 1946.
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(5) No contribution to the capital of the corporation shall be made or accepted except in pursuance of the provisions of this section or section 35.
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Commencement of business.
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7. The corporation shall not commence business until the initial contribution referred to in section 6 has been made by the Government, and a certificate under the hand of the Minister has been issued authorizing the corporation to commence business. * [* 1st May, 1951, fixed for commencement of business.- Gazette No. 10,240 of 27th April, 1951.]
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Person who may execute documents and make payments on behalf of Government.
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8. The Secretary to the Treasury is hereby authorized to sign and execute all documents which are required to be executed by the Government as a shareholder of the corporation.
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Appointment of members of the corporation.
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9.
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(1) The Minister shall appoint not more than five persons to be members of the corporation, one of whom shall be an officer nominated for the purpose by the Minister of Finance.
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(2) The Minister shall designate one of the persons appointed under subsection (1) to be the chairman of the corporation.
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(3) A Senator or a Member of Parliament shall not be eligible for appointment under the preceding provisions of this section as a member of the corporation or as the chairman thereof.Judicial officer shall not be eligible for appointment as the chairman of the corporation.
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Term of office, &c.
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10.
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(1) Every member of the corporation shall, unless he earlier vacates his office as hereinafter provided, hold office for a period of three years from the date of his appointment.
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(2) Any member of the corporation vacating office by resignation or effluxion of time shall be eligible for reappointment.
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(3) If any member of the corporation is or is likely to be absent from Ceylon for a period exceeding one month or is unable to discharge the duties of his office for a period exceeding one month by reason of ill health or for any other cause, the Minister may appoint some other person to act in place of such member until the resumption of duties by such member.
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(4) Where any member of the corporation ceases to hold office as such at any time prior to the expiration of his period of appointment, the Minister may appoint some other person to be a member in his place during the remainder of that period.
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Vacation of office.
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11. A member of the corporation shall vacate office as such –
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(a) if his appointment is terminated by order made by the Minister ; or
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(b) if he is adjudged by a competent court to be of unsound mind ; or
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(c) if, having been adjudged an insolvent or a bankrupt, he has not been granted by a competent court a certificate to the effect that his insolvency or bankruptcy has arisen wholly or partly by unavoidable losses or misfortunes; or
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(d) if he absents himself, without leave of the corporation, from three consecutive meetings of the corporation ; or
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(e) if he resigns office by writing under his hand addressed to the Minister ; or
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(f) if he in any way, otherwise than as a member and in common with the other members of any company consisting of more than twenty-five members –
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(i) becomes concerned or interested in any contract or agreement entered into by or on behalf of the corporation ;
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(ii) participates or claims to participate in the profits of any such contract or agreement or emolument arising from the contract or agreement:
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Provided, however, that a member of the corporation shall not be deemed to be concerned or interested in any contract or agreement herein before mentioned or to participate or claim to participate in the profits of or in any benefit or emolument arising from any such contract or agreement by reason only of his entering into or obtaining any benefit arising from a contract or agreement between himself and the corporation for the transport by the corporation of himself or any other person or of any goods.
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Remuneration, &c, of members of corporation.
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12.
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(1) The members of the corporation shall be paid out of the funds of the corporation such remuneration as the corporation may from time to time determine with the approval of the Minister given with the concurrence of the Minister of Finance.
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(2) A member of the corporation in whose place a person has been appointed to act shall not receive the remuneration attached to his office during the continuance of such acting appointment, but such remuneration shall be paid to the person acting in his place.
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(3) Where any member of the corporation is entrusted with any special mission or function or by request performs special services on behalf of the corporation, the corporation may grant him such additional remuneration as it thinks fit. The members may be repaid by the corporation all such reasonable travelling, hotel and incidental expenses as they may incur in attending meetings of the corporation or which they may otherwise incur in or about the business of the corporation.
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| GENERAL PROVISIONS FOR CONDUCT OF BUSINESS, &C. |
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Custody and use of common seal.
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13.
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(1) The corporation shall provide a common seal for the purposes of the corporation and may from time to time change the same ; and such seal may be kept by such person and in such manner as the corporation may from time to time determine, but shall not be used except by the authority of the corporation and in the presence of at least two members of the corporation, or of one member and the General Manager or other officer appointed for that purpose by the corporation who shall sign the document to which the seal is affixed.
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(2) The corporation shall have full power to use the common seal in the execution of all or any of the powers vested in the corporation by this Act, or otherwise in relation to the affairs and business of the corporation as the corporation in its discretion sees fit.
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Appointment and remuneration of officers, &c.
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14.
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(1) The corporation shall have power to appoint and dismiss the staff of the corporation including the subordinate staff: Provided that the appointment or dismissal of the General Manager shall not be made without the previous approval in writing of the Minister.
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(2) The remuneration and other conditions of service of the staff of the corporation shall be determined by the corporation.
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(3) The corporation may establish and regulate any pension or provident fund for the benefit of the members of the staff and their dependants or nominees, and make contributions to any such fund out of the moneys of the corporation.
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Contracts
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15. Contracts on behalf of the corporation may be made as follows : –
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(a) a contract which if made between private persons would be by law required to be in writing, may be made on behalf of the corporation in writing under the common seal of the corporation ;
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(b) a contract which if made between private persons is by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the corporation in writing, signed by any person or persons duly authorized thereto by the corporation ; and
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(c) a contract which if made between private persons would in law be valid although made by parol only and not reduced into writing, may be made by parol on behalf of the corporation by any person or persons duly authorized thereto by the corporation.
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Bills of exchange and promissory-notes.
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16. A bill of exchange or promissory note shall be deemed to have been made, executed, or endorsed on behalf of the corporation if made, executed, or endorsed in the name of, or by or on behalf or on account of, the corporation by any person or persons duly authorized thereto.
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Execution of deeds abroad.
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17.
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(1) The corporation may, by writing under its common seal, empower any person either generally or in respect of any specific matter, as its attorney, to execute deeds on its behalf in any place not situate in Ceylon.
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(2) A deed signed by such an attorney on behalf of the corporation and under his signature or seal shall bind the corporation and have the same effect as if it were under its common seal.
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Receipts when valid.
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18. A receipt signed by two members of the corporation or by any officer expressly authorized by the corporation to give receipts shall be an effectual discharge for moneys paid to the corporation.
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Delegation of functions of corporation.
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19. The corporation may delegate any of its powers other than the power to make by-laws or to appoint the General Manager, Assistant General Manager, secretary, and accountant, to committees consisting of two or more members of the corporation or to any one member, or to the General Manager or to any other officer of the corporation, and may from time to time revoke any such delegation either wholly or in part and either as to persons or purposes : but every such committee, or member, General Manager or other officer shall, in the exercise of the powers delegated to it or him, conform to all such by-laws as are made by the corporation. All acts done by any such committee, or member, General Manager or other officer, in conformity with such regulations and in fulfilment of the purposes of its or his appointment, but not otherwise, shall have the like force and effect as if done by the corporation.
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Application of law relating to carriage by air and aerial navigation.
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20.
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(1) The provisions of any other law having effect in Ceylon in relation to contracts of carriage of goods or persons by air and to rights, obligations and liabilities of parties to any such contracts shall apply to and in relation to contracts by or with the corporation for such carriage.
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(2) The provisions of any other written law having effect in Ceylon in relation to aerial navigation shall apply, in all respects, to and in relation to the corporation and to aerial navigation undertaken by or on behalf of the corporation.
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Accounts of corporation.
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21.
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(1) The corporation shall keep and maintain accounts of receipts and expenditure and such other accounts as may be directed by the Minister of Finance in such form as may be approved for the purpose by that Minister.
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(2) The corporation shall prepare estimates of its receipts and expenditure for each financial year. Such estimates shall be submitted to the Minister within such time as he may direct in that behalf.
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Audit of accounts.
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22.
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(1) The accounts of the corporation shall be subject to inspection and audit by the Auditor-General.
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(2) The Auditor-General shall examine the accounts of the corporation and ascertain the correctness of the balance sheet of the corporation, and report to the corporation and the Minister –
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(a) whether or not he has obtained1 all the information and explanations required by him ; and
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(b) whether in his opinion the balance sheet referred to in the report is properly drawn up so as to exhibit a true and correct view of the corporation’s affairs according to the best of his information and the explanations given to him and as shown by the books of the corporation.
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(3) The audited accounts of the corporation shall, as soon as may be after being presented to the Minister, be laid before the Senate and the House of Representatives.
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Application of moneys of corporation.
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23. Moneys received by the corporation in the exercise of its powers and functions under this Act shall be applied-
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(a) in the payment or discharge of all costs, expenses and obligations incurred or undertaken by the corporation in pursuance of this Act;
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(b) in the payment of the remuneration and allowances to the members of the corporation and to the staff of the corporation and in the payment of any contributions to any pension, provident fund or scheme established under this Act; and
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(c ) in the payment of all taxes, rates or charges payable to the Government or to any local authority under and in accordance with any other written law in force in Ceylon in that behalf.
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Investment of moneys.
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24 Any moneys of the corporation not immediately required to be expended for the purposes mentioned in section 23 may be invested in securities of the Government of Ceylon.
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Reserves.
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25. The corporation may with the approval of the Minister from time to time set aside such sums as it thinks fit as reserves for depreciation of assets, insurance, taxation or any other purpose whatsoever ; and all sums so set aside shall, until required for the purpose for which they were reserved, be invested as provided in section 24.
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Payments to Consolidated Fund.
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26. All sums remaining out of the net receipts of the corporation for each financial year after provision has been made for the payments and reserves herein before specified shall, in accordance with such directions as may from time to time be issued in that behalf by the Minister of Finance, be paid by the corporation and credited to the Consolidated Fund.
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Minister may request corporation to operate service.
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28.
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(1) The Minister may from time to time request corporation to arrange for the operation by the corporation of any specified air service, whether in Ceylon or to and from any place or places outside Ceylon ; and any such request shall be complied with by the corporation subject to the provisions of sub-section (3).
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(2) Nothing in subsection (1) shall be construed any way to restrict the right of the corporation its own motion to operate any air services.
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(3) Where the corporation is of opinion that the operation of any air service required by the Minister under subsection (1) is likely to involve financial loss to the corporation, the corporation may so inform the Minister, who may thereupon, with the concurrence of the Minister of Finance, by order direct the corporation to operate such service.
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(4) Where any service is operated in pursuance of an order made under subsection (3) and it is proved to the satisfaction of the Minister of Finance that the operation of that service during any financial year has caused financial loss to the corporation, the Minister of Finance shall by order direct the payment to the corporation from the Consolidated Fund of an amount representing the amount of the loss so incurred by the corporation.
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By-laws.
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29.
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(1) The corporation may make by-laws not inconsistent with the provisions of this Act for or in respect of all or any of the following matters : –
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(a) The operation of air services and the conditions regulating the carrying out by the corporation of any power, function or undertaking authorized by this Act.
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(b) The protection and preservation of property vested in or belonging to or otherwise in the 1 custody or under the control of the corporation.
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(c) The maintenance of order in connexion with the operation of air services.
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(d) The disposal of unclaimed goods in the possession of the corporation.
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(e) The prohibition of interference with the air services or the property of the corporation or of any interference with or obstruction of any officer or employee of the corporation.
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(f) The limitation of the liability of the corporation in respect of any damage to or loss of goods and the conditions governing the making of claims against the corporation in respect of any such damage.
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(g) The conduct of the business of the corporation, the time and manner of the holding and summoning of its meetings, and the procedure to be followed at such meetings.
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(h) The imposition of penalties not exceeding one hundred rupees or of imprisonment for any period not exceeding one month for any breach of any by-law.
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(2) No by-law made by the corporation shall be of any force or effect unless it has been approved by the Minister and published in the Gazette. No by-law made by the corporation under paragraph (h) of subsection (1) shall be of any force or effect unless it has been approved by the Senate and the House of Representatives and is published in the Gazette.
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(3) Any person contravening or failing to comply with the provisions of any by-law made by the corporation shall be guilty of an offence and liable to the punishment provided by the by-laws in that behalf.
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Transfer of existing Air Ceylon assets to corporation.
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30.
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(1) All aircraft, plant, machinery and equipment, used or employed for the purposes of the air undertaking under the name of Air Ceylon heretofore carried on by the Government shall forthwith from the date of commencement of business by the corporation, be transferred to, vested in and become the property of the corporation.
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(2) The value of the assets so transferred to the corporation shall be assessed by the corporation in consultation with the Secretary to the Treasury.
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Company law not to apply to corporation.
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31. Nothing in the Companies Ordinance or in any other Written law relating to companies shall apply to or in relation to the corporation.
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Power of Governor-General in emergency.
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32.
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(1) An order made under section 7 of the Air Navigation Act may require that the whole or any part of the undertaking of, or of any property and rights of, or under the control of, the corporation shall be placed at the disposal of the Government, or of such persons as may be specified in the order.
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(2) So long as any such order is in force, the corporation shall comply with any directions which may be given to it by or under the authority of the Governor-General.
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| AGREEMENT FOR PARTICIPATION IN UNDERTAKING OF CORPORATION |
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Agreement for participation.
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33.
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(1) Any public officer designated by the Minister is hereby authorized, on behalf of the Government, to conclude an agreement with any person engaged or proposing to engage in any air undertaking whether in or outside Ceylon for participation by such person in the business of the corporation ; and where any such agreement is concluded, such person shall become the participant for the purposes of this Act with effect from such date as may be specified in that behalf in the agreement.
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(2) The agreement referred to in subsection (1) may contain such covenants and conditions as the Minister may consider necessary, in addition to the provisions required or authorized by this Act to be contained therein.
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(3) All rights or powers exercisable under or for the purposes of this Act by the participant may be exercised on behalf of the participant by such person or persons, and in such manner, as may be specified in that behalf in the agreement, and if so exercised, shall be deemed for the purposes of this Act to have been duly exercised by the participant.
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(4) The corporation as constituted under section 9 (1)may, together with the Government and the participant be a party to the agreement referred to in subsection (1) of this section.
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Application of this Part.
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34 The provisions of sections 35 to 46 shall apply only if an agreement is concluded under section 33, and only so long as such agreement is in force.
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Participant’s contribution of capital.
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35.
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(1) The participant shall make an initial contribution to the capital of the corporation of an amount which bears to the total amount previously contributed to the capital by the Government the proportion of 49 : 51.
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(2) Where any further amount is contributed by the Government to the capital of the corporation, the participant shall make a further contribution towards the capital of such an amount that the total sum contributed by the participant will be equal to forty-nine per centum, of the capital for the time being of the corporation.
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Government and participant to be shareholders in corporation.
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36.
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(1) Notwithstanding that neither the Government nor the participant is a member of the corporation, the Government and the participant shall by virtue of their contributions to the capital of the corporation, be shareholders in the corporation ; and accordingly certificates for shares, each of a nominal value of ten thousand rupees, shall, in accordance with an order which shall be made for the purpose by the Minister, be issued by the corporation to the Secretary the Treasury on behalf of the Government, and to the participant, up to an amount equal to the contribution made by the Government and the participant respectively.
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(2) The shares held by the Government and the participant in the corporation shall entitle the Government and the participant –
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(a) to participate, subject to the provisions of this Act, in the profits of the corporation pro rata according to the nominal value of the shares held; and
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(b) in the event of the dissolution of the corporation, to participate pro rata, according to the nominal value of the shares held, in. the amount realized by the sale of the assets of the corporation, after payment of liabilities to other persons, if any.
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(3) The right of the participant to transfer or dispose of any shares held by it shall be subject to the provisions contained in that behalf in this Act and in the agreement concluded under section 33 ; and if any such shares are duly transferred to any other person, such shares shall be held by such other person in all respects in like manner and subject to the same provisions (whether contained in this Act or in the agreement) as though such person were the participant.
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(4) The liability of the Government and of the participant, as shareholders in the corporation, shall be limited.
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Restriction on sale, &c, of shares of participant.
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37.
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(1) The participant shall not be entitled to sell, assign, charge or otherwise in any manner whatsoever to alienate or encumber any shares in the corporation except with the prior consent in writing of the Minister and except to or in favour of a person approved by the Minister for the purpose. If the agreement concluded under section 33 contains provision specifying the circumstances in which the consent of the Minister to any proposed sale or alienation of the shares of the participant shall not be withheld, such provision shall have effect as though it were herein enacted.
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(2) No shares of the participant in the corporation shall, except with the prior consent in writing of the Minister, be or be liable to be sold in execution of any order or decree of any court or by any assignee in insolvency of the participant, or if the participant is a company by any liquidator or otherwise in the course of any proceedings for the winding up of the company.
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(3) Where application is made to the Minister for such prior consent as is required by subsection (1) or subsection (2), the Minister may, in lieu of granting such consent, determine that the shares to which the application relates shall be acquired by the Government ; and such determination shall take effect if sanctioned by resolution of the House of Representatives.
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(4) If consent is granted by the Minister to the sale of any shares in any case referred to in subsection (2), the Minister may with the prior sanction of a resolution of the House of Representatives authorize the Secretary to the Treasury to purchase the shares for and on behalf of the Government at any sale in execution or from the assignee in insolvency or from the liquidator or other person or authority competent to dispose of such shares in proceedings for the winding up of the company, as the case may be.
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(5) The preceding provisions of this section shall have effect notwithstanding anything in any written or other law, and in the event of any conflict or inconsistency between such preceding provisions and anything in any written or other law, such provisions shall prevail.
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Acquisition by Government of participant’s shares.
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38. Upon the expiration of a period of ten years from the date on which an agreement under section 33 takes effect, or at any time thereafter, the Minister may, with the prior sanction of a resolution of the House of Representatives, determine that the shares in the corporation of the participant shall be acquired by the Government.
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Valuation of participant’s shares.
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39. “Where the shares or any of the shares of the participant are to be acquired by the Government in pursuance of a determination under subsection (3) of section 37 or under section 38, the value of the shares which are to be so acquired shall be determined in such manner and upon such terms and conditions as shall be contained in that behalf in the agreement under section 33 ; and provision so made in the agreement shall include terms and conditions as to the determination, where necessary, of the value of goodwill. Nothing in the preceding provisions of this section shall apply in any case where any shares of the participant are purchased in pursuance of subsection (4) of section 37.
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Payment for shares acquired or purchased by Government.
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40. Payment for the shares or any of the shares in the corporation of the participant which are acquired or purchased by the Government under the preceding provisions of this Act shall be made out of the Consolidated Fund from moneys voted by Parliament for the purpose.
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Purchase of aircraft, equipment, &c, and hiring of aircraft from participant.
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41.
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(1) Where provision in that behalf is contained in any agreement concluded under section 33, the corporation may purchase from the participant any aircraft, plant, machinery or equipment at a price to be determined in accordance with the agreement ; and the whole or the appropriate part of such price shall be set off in reduction or satisfaction of the contribution payable by the participant under section 35 to the capital of the corporation.
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(2) Where provision in that behalf is contained in any agreement concluded under section 33, the corporation may, for the purposes of the operation of air services, take on hire, upon charter, any aircraft from the participant upon such terms and conditions as shall be specified in the agreement.
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(3) Any sums received by the participant from the corporation as the hire of any aircraft taken on hire under subsection (2) shall not be taken to be profits or income of the participant for the purposes of any written law relating to income tax or profits tax.
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Additional members of corporation may be nominated by participant.
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42.
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(1) The Minister shall appoint two persons nominated for the purpose by the participant to be members of the corporation, in addition to the persons appointed by the Minister under subsection (1) of section 9.
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(2) The provisions of subsection (3) of section 9 and the provisions of sections 10 and 11 shall apply to and in relation to any person appointed as provided in subsection (1) of this section to be a member of the corporation, subject however to the following modifications, that is to say: –
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(a) The powers conferred on the Minister by sub- section (3) or subsection (4) of section 10 shall not be exercised except at the request of the participant, and no appointment of any person shall be made under either of those subsections unless such person is nominated for such appointment by the participant.
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(b) The power of the Minister under paragraph (a) of section 11 to terminate the appointment of any member of the corporation shall not be exercised in relation to any person appointed as provided in subsection (1) of this section except at the request of or with the concurrence of the participant.
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(c) Paragraph (f) of section 11 shall apply to or in relation to a person appointed as provided in subsection (1) of this section, subject to the modification that the reference in that paragraph to any company consisting of more than twenty-five members shall be read as a reference to any company whatsoever formed and registered outside Ceylon.
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(3) Notwithstanding anything in section 9 –
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(a) the Minister may designate one of the persons appointed under subsection (1) of this section to be the chairman of the corporation, and shall in that event designate one of the members appointed under section 9 to be the deputy chairman of the corporation who shall in the absence of the chairman act as chairman ; and
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(b) any person appointed under subsection (1) of this section to be a member of the corporation may, with the approval of the Minister, appoint an alternate who shall, in the absence of such member from Ceylon, represent such member and be deemed for the purposes of this Act to be a member of the corporation.
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Nomination of General Manager by participant.
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43. A person shall not be appointed to be the General Manager of the corporation unless he is nominated in that behalf by the participant.
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Operations committee.
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44.
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(1) There shall be an operations committee of the corporation which shall be constituted in accordance with provisions to be contained in that behalf in the agreement concluded under section 33, and which shall exercise the functions conferred on it by the agreement.
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(2) Without prejudice to the generality of the provisions of subsection (1), the committee shall be charged with the function of making recommendations to the corporation with respect to the following matters, that is to say: –
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(a) The determination of the places to and from which air services are to be provided by the corporation and the routes and schedules of such services.
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(b) The determination of the other services or facilities which the corporation is authorized by paragraphs (g), (h), (j) and (k) of section 3 (3) to provide or maintain.
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(c) The determination of the type, and the number or quantity, of aircraft and equipment to be acquired and held by the corporation, and the control and supervision of the buildings and maintenance and repair and overhaul shops of the corporation.
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Restriction on increase of capital.
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45 Notwithstanding anything in section 5, no resolution under subsection (2) of that section may be introduced unless the corporation by unanimous decision of all its members recommends the introduction of the resolution.
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Provision for payment of dividends.
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46.
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(1) Nothing in section 25 or in section 26 shall apply in respect of any financial year during which any shares of the corporation are held by the participant.
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(2) Unless the corporation by unanimous decision of all its members otherwise determines in respect of any financial year, at least fifty per centum of the net profits of the corporation for each1 financial year shall be applied in the payment of a dividend to the Government and the participant respectively upon the shares in the corporation.
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(3) Nothing in section 56 (1) of the Income Tax Ordinance shall apply in the case of the corporation ; and accordingly the participant shall not be assessable to tax under that subsection.
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(4) All sums remaining out of the net profits for any financial year, after payment of the dividend for which provision is made in subsection (2) and after deduction of such amount as may be kept in hand for general purposes, shall be set aside by the corporation as reserves for depreciation of assets, insurance, taxation or any other purposes whatsoever ; and all sums ) set aside shall, until required for the purposes for which they were reserved, be invested as provided in section 24.
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Employment of Ceylonese personnel.
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47. In the engagement and appointment of its officers and servants and in the exercise of the powers conferred by section 3 (2) (c) of this Act, the corporation shall give preference to such citizens of Ceylon as may be qualified and suitable, and shall have regard to the need for securing as far as practicable that on the expiration of a period of ten years from the appointed the persons employed for the purposes of the pairing of the corporation will be persons who are citizens of Ceylon.
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