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THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002

Title : THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002

Year : 2002

[58 OF 2002]


An Act to provide for the transfer and vesting of the undertaking (excluding the specified undertaking) of the Unit Trust of India to the specified company to be formed and registered under the Companies Act, 1956, and the transfer and vesting of the specified undertaking of the Unit Trust of India in the Administrator and for matters connected therewith or incidental thereto and also to repeal the Unit Trust of India Act, 1963.

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:-

CHAPTER I
PRELIMINARY


 
(1) This Act may be called the Unit Trust of India (Transfer of Under taking and Repeal) Act, 2002.
 
(2) It shall be deemed to have come into force on the 29th day of October, 2002.



In this Act, unless the context otherwise requires,-

(a) “Administrator” means a person or a body of persons appointed as Administrator under section 7;

(b) “Appointed day” means such date as the Central Government may, by notification in the Official Gazette, appoint under section 4;

(c) “Bank” shall have the meaning assigned to it in clause (d) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993);

(d) “Development Bank” means the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);

(e) “financial institution” shall have the meaning assigned to it in clause (h) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993);

(f) “Life Insurance Corporation of India” means the Life Insurance Corporation of India established under sub-section (1) of section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);

(g) “Schedule” means Schedules I and II to this Act;
 
(h) “Specified company” means a company to be formed and registered under the Companies Act, 1956 (1 of 1956) and whose entire capital is subscribed by such financial institutions or banks as may be specified by the Central Government, by notification in
the Official Gazette, for the purpose of transfer and vesting of the undertaking;

(i) “Specified undertaking” includes all business, assets, liabilities and properties of the Trust representing and relatable to the schemes and Development Reserve Fund specified in the Schedule I;

(j) “State Bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);

(k) “Trust” means the Unit Trust of India established under sub- section (1) of section 3 of the Unit Trust of India Act, 1963 (52 of 1963);

(l) “Undertaking” includes all business, assets, liabilities and properties of the Trust representing and relatable to the schemes and plans specified in the Schedule II;

(m) “Unit” means a unit issued under a unit scheme made under section 21 of the Unit Trust of India Act, 1963 (52 of 1963).



(1) On the appointed day, the initial capital of the Trust,contributed by the Development Bank, the Life Insurance Corporation, the State Bank and the subsidiary banks and other institutions under sections 4 and 4A of the Unit Trust of India Act, 1963 (52 of 1963), as it stood immediately before the commencement of this Act, shall stand transferred to, and vest in, the Central Government.

(2) The initial capital contributed by the Development Bank, the Life Insurance Corporation, the State Bank and the subsidiary banks and other institutions shall be refunded,by the Central Government, to such extent as may be determined by it, having regard to the book value, the assets and liabilities  of the Trust. Undertaking of Trust to vest in specified company and specified undertaking of.



(1) On such date as the Central Government may, by notification in the Official Gazette,appoint, there shall be transferred to, and vest in,-

(a) The specified company,the undertaking (excluding the specified undertaking) of the Trust for such consideration and on such terms and conditions as may be mutually agreed upon between the Central Government and the subscribers to the capital of the specified company;
 
(b) The Administrator, the specified undertaking of the Trust.

(2) The decision of the Central Government, as to whether any business, assets, liabilities or properties represent or relate to the undertaking or specified undertaking, shall be final:

Provided that any business, asset or property which is not represented or related to the undertaking or specified undertaking, shall vest in the Central Government.



(1) The undertaking of the Trust which is transferred to, and which vest in, the specified company or the specified undertaking of the Trust, which is transferred to, and vest in, the Administrator, as the case may be, under section 4, shall be deemed to include all business, assets, rights, powers, authorities and privileges and all properties, movable and immovable, real and personal, corporeal and incorporeal, in possession or reservation, present or contingent of whatever nature and wheresoever situate including lands, buildings, vehicles, cash balances, deposits, foreign currencies, disclosed and undisclosed reserves, reserve fund, special reserve fund, benevolent reserve fund, any other fund, stocks,investments, shares, bonds, debentures, security, management of any industrial concern, loans, advances and guarantees given to industrial concerns, tenancies, leases and book-debts and all other rights and interests arising out of such property as  were immediately before the appointed day in the ownership, possession or power of the Trust in relation to the undertaking or the specified undertaking, as the case may be, within or without India, all books of account, registers, records and documents relating thereto and shall also be deemed to include all borrowings, liabilities, units issued and obligations of whatever kind within or without India then subsisting of the Trust in relation to such undertaking or the specified undertaking, as the case may be.

(2) All contracts, deeds, bonds, guarantees, powers-of-attorney, other instruments (including all units issued and unit schemes formulated by the Trust) and working arrangements subsisting immediately before the appointed day and affecting the Trust
shall cease to have effect or to be enforceable against the Trust and shall be of as full force and effect against or in favour of the specified company or the Administrator, as the case may be, in which the undertaking or specified undertaking has vested by virtue of this Act and enforceable as fully and effectually as if instead of the Trust, the specified company or the Administrator, as the case may be, had been named therein or had been a party thereto.

(3) All unit schemes taken by the Board of the Trust immediately before the commencement of this Act shall be deemed to have been taken by the specified company or the Administrator, as the case may be, and all the units issued by the Trust under such
scheme shall be deemed to be the units issued by the specified company or the Administrator, as the case may be, and the income on such units shall be distributed and such units shall be redeemed or purchased by them in the same manner as would have been done by the Trust had the undertaking or the specified undertaking not been transferred under section 4.

(4) Any proceeding or cause of action pending or existing immediately before the appointed day by or against the Trust may, as from the appointed day, be continued and enforced by or against the specified company or the Administrator, as the case may be, in which the undertaking or specified undertaking has vested by virtue of this Act as it might have been enforced by or against the Trust if this Act had not been enacted and shall cease to be enforceable by or against the Trust.



(1) Every officer or other employee of the Trust (except a trustee of the Board, the Chairman and executive trustee) serving in the employment immediately before the appointed day shall become, as from the appointed day, an officer or, as the case may be,
other employee of the specified company and shall hold his office or service therein by the same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave, leave fare
concession, welfare scheme, medical benefit scheme, insurance, provident fund, other funds, retirement, voluntary retirement, gratuity and other benefits as he would have held under the Trust if its undertaking had not vested in the specified company and shall
continue to do so as an officer or, as the case may be, other employee of the specified company or until the expiry of a period of six months from the appointed day if such officer or other employee opts not to continue to be the officer or other employee of the specified company within such period.
 
(2) The Administrator, in consultation with the specified company, may requisition, the services of such officers or other employees as it may deem fit, on such terms and conditions which may be mutually agreed upon between the Administrator and the specified company.

(3) Where an officer or other employee of the Trust opts under sub-section (1) not to be in employment or service of the specified company, such officer or other employee shall be deemed to have resigned.

(4) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) or in any other law for the time being in force, the transfer of the services of any officer or other employee of the Trust to the specified company shall not entitle such officer or other employee to any compensation under this Act or under any other law for the time being in force and no such claim shall be
entertained by any court, tribunal or other authority.

(5) The officers and other employees who have retired before the appointed day from the service of the Trust and are entitled to any benefits, rights or privileges shall be entitled to receive the same benefits, rights or privileges from the specified company.

(6) The trust of the provident fund or the gratuity fund of the Unit Trust of India and any other bodies created for the welfare of officers or other employees would continue to discharge their functions in the specified company as was being done hitherto in the Unit Trust of India and any tax exemption granted to the provident fund or the gratuity fund would continue to be applied to the specified company.

(7) Notwithstanding anything contained in this Act or in the Companies Act, 1956 (1 of 1956) or in any other law for the time being in force or in the regulations of the Unit Trust of India, the Chairman, the trustees, executive trustee or any other person entitled to manage the whole or substantial part of the business and affairs of the Trust shall not be entitled to any compensation against the Trust for the loss of office or for the premature termination of any contract of management entered into by him with the Trust.



(1) The Central Government shall, on and from the appointed day, appoint a person or a body of persons, as the "Administrator of the specified undertaking of the Unit Trust of India" for the purpose of taking over the administration thereof and the Administrator shall carry on the management of the specified undertaking of the Trust for and on behalf of the Central Government.

(2) The Central Government may issue such directions (including directions as to initiating, defending or continuing any legal proceedings before any court, tribunal or other authority) to the
Administrator as to his powers and functions as that Government may deem desirable and the Administrator may apply to the Central Government at any time for instructions as to the manner in which he shall conduct the management of the specified under taking or in relation to any matter arising in the course of such management.

(3) Subject to the other provisions of this Act and the Schemes made there under and the control of the Central Government, the
Administrator shall be entitled, notwithstanding anything contained in any other law for the time being in force, to exercise, n relation to the management of the specified undertaking, the powers specified under section 10 including powers to dispose of any property or assets of such specified undertaking whether such powers are derived under any law for the time being in force

(4) Every person having possession, custody or control of any property forming part of the specified undertaking of the Trust shall deliver forthwith such property to the Administrator.

(5) Any person who, on the appointed day, has in his possession or under his control any books, papers or other documents relating to the specified undertaking, including the minutes book containing the resolutions of the persons in charge of the management of the specified undertaking before the appointed day, the current cheque books relating to the specified undertaking, any letters, memorandum, notes or other communications between him and the Trust so far they relate to the specified undertaking shall, notwithstanding anything contained in any other law for the time being in force, be liable to account for the books, papers and other documents (including such minutes book, letters, memorandum, notes or other communications) to the Administrator.

(6) Any person in charge of the management of the specified under taking immediately before the appointed day shall, within ten days from that day or within such further period as the Central complete inventory of all the properties and assets (including particulars of book-debts and investments and belongings) forming part of the specified undertaking immediately before the appointed day and of all the liabilities and obligations of Government may allow in this behalf, furnish to the Administrate the specified undertaking, in relation to its administration, subsisting immediately before that day, and also of all agreements relating to specified undertaking entered into by the Trust in relation to its administration and in force immediately before t at day.

(7) The Administrator shall receive from the funds of the specified undertaking such remuneration as the Central Government may fix.



(1) The Administrator shall, immediately on redemption of all the schemes of the specified undertaking and the payment of entire amount to investors, shall vacate his office; but nothing in this sub- section shall e construed as prohibiting his appointment as a member of the Board of Advisers after vacation of his office as such.

(2) On the vacation of his office, the Administrator shall forthwith deliver, to the Central Government or any institution or officer specified by it, possession of all assets and properties representing and relatable to the specified undertaking which are in his possession, custody and control on the date immediately preceding the date on which he vacates his office as the Administrator.
Last updated on October, 2016

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