(1) The Central Government shall, by notification in the official Gazette, establish a corporation by the name of the Unit Trust of India which shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold or dispose of property and to contract, and may, by the said name, sue or be sued.
(2) The head office of the Trust shall be at Bombay or at such other place as the 1*[Development Bank] may, by notification in the official Gazette, specify.
(3) The Trust may establish local offices, branches or agencies at any places in or outside India.
3A - 2*Prohibition against the use of words "Unit Trust", "Unit" or "Units" as a part of the name of any person other than the Trust
(1) No individual or group of individuals, or company, other than the Trust, who or which accepts money by way of any loan, deposit, investment or similar other transaction, shall use the word or words "Unit Trust", "Unit" or "Units" as a part of his or its name.
Explanation.-For the removal of doubts it is hereby declared that nothing in this sub-section shall be deemed to prevent any individual or group of individuals, or company from describing any scrip or other security issued by him or it for any amount which has been received and repayable by him or it in the course of transaction of any business which is of the nature of a unit trust or mutual fund, as a unit certificate or units, as the case may be.
(2) If any provision of sub-section (1) is contravened, any person guilty of such contravention shall be punished with fine which may extend to two thousand rupees, and where the contravention is a continuing one, with a further fine which may extend to one hundred rupees for every day after the first during which the contravention continues.
(3) Where any provision of sub-section (1) has been contravened by a company, every person who at the time of such contravention was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided herein if he proves that the contravention was made without his knowledge or that he had exercised all due diligence to prevent the contravention.
(4) Notwithstanding anything contained in sub-section (3), where any offence under this section has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
(5) No Court shall take cognizance of any offence punishable under this section except upon a complaint in writing made by an officer of the Trust generally or specially authorised in writing in this behalf by the Trust and no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try such offence. Explanation.-For the purposes of this section,-
(a) "Company" means any body corporate and includes a firm or other association of individuals; and
(b) "Director", in relation to a firm, means a partner in the firm.]
(1) Subject to the provisions of this Act, the initial capital of the Trust shall be five crores of rupees divided in the form of certificates each of which shall be of such face value as may be prescribed and contributed in the manner hereinafter provided.
(2) Before such date as the Central Government may by notification in the official Gazette, specify in this behalf-
(a) The Reserve Bank shall contribute two and a half crores of rupees;
(b) The Life Insurance Corporation shall contribute seventy-five lakhs of rupees;
(c) The State Bank and the subsidiary banks shall contribute seventy-five lakhs of rupees, the amount which the State Bank and each subsidiary bank shall contribute being determined by the State Bank;
(d) Other institutions,1namely, scheduled banks other than those referred to in Cl. (c) and such classes of financial institutions as may be notified by the Central Government in the official Gazette in this behalf may contribute one crore of rupees.
(3) If the aggregate of the contributions made by the institutions referred to in Cl. (d) of sub-section (2) exceeds one crore of rupees, the Board shall refund the excess amount to such institutions, so however, that the amount to be refunded to each such institution bears, as far as possible, the same proportion to the contribution made by it as the excess amount bears to the aggregate of the contributions made by such institutions.
(4) If the aggregate of the contributions made by institutions referred to in Cl. (d) of sub-section (2) is less than one crore of rupees, the Reserve Bank shall contribute the deficiency within thirty days of the date specified under sub-section (2):
Provided that the Reserve Bank may, thereafter, transfer the whole or any part of its contribution under this sub-section to any institution referred to in Cl. (d) of sub-section (2).
(5) If at any time the Board is of opinion that the amount of the initial capital is in excess of the requirements of the Trust,2[the Board may, and if the Central Government being of like opinion so directs, the Board shall, refund the whole or as the case may be so much of such capital as is in excess of its requirements] to3[any contributing institution, and in making any such refund the Board shall not make any discrimination between the institutions referred to in C1. (c) of sub-section (2) or between the institutions referred to in C1. (d) of that sub-section]:
Provided that where only a part is so refunded the amount to be refunded to each such institution shall bear, as far as possible, the same proportion to the contribution made by it as such part bears to the initial capital:
Provided further that for the purpose of any refund, the value of the initial capital shall be determined by the Board on such basis as the Central Government may specify in this behalf, regard being had to the real or exchangeable value thereof.
4A -4* Transfer of initial capital to Development Bank
On such date as the Central Government may, by notification in the official Gazette, appoint (hereinafter referred to as the notified date), all the contributions made by the Reserve Bank to the initial capital of the Trust, as on the date immediately preceding the notified date, shall stand transferred to, and vested in, the Development Bank.
4B - Payment of amount
The Reserve Bank shall be given by the Development Bank, in cash, for the transfer to, and vesting in, the Development Bank of the contributions made to the initial capital of the Trust by the Reserve Bank, an amount equal to contributions to the initial capital so transferred.
The Board shall maintain in such manner as may be prescribed a register containing the name of the contributing institutions, the amount contributed by each such institution and such other particulars as may be prescribed.
(1) As soon as may be after the contribution has been made by any contributing institution under Section 4, the Board shall issue to such contributing institution a contribution certificate or contribution certificates in such form and containing such particulars as may be prescribed.
(2) Where the whole or any part of the contribution has been refunded to any institution under sub-section (5) of Section 4, that institution shall, as soon as may be after the refund has been made, forward the contribution certificate or certificates to the Board for cancellation or amendment, as the case may be, and the Board shall cancel or amend the certificate or certificates accordingly.
(1) Any contributing institution referred to in Cl. (d) of sub-section (2) of Section 4 may, in the prescribed manner, transfer a contribution certificate to any other institution referred to in that clause and thereupon such other institution shall be deemed to be a contributing institution for the purposes of this Act.
(2) Save as provided in sub-section (1), a contribution certificate shall not be transferred.
Every holder of a contribution certificate shall have all the rights and be subject to all the liabilities conferred or imposed on a contributing institution by or under this Act.
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