3. Undertakings of the Reconstruction Bank to vest in company.—On such date1
as the Central
Government may, by notification in the Official Gazette, appoint, there shall be transferred to, and vest
in, the Company, the undertakings of Reconstruction Bank.
4. General effect of vesting of undertaking in Company.—(1) The Central Government, being
the shareholder of the Reconstruction Bank immediately before the appointed day, shall be deemed to
be registered, on and from the appointed day, as a shareholder of the Company.
(2) The undertakings of the Reconstruction Bank which are transferred to, and which vest in, the
Company under section 3 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 Reconstruction Bank in relation to its undertakings, within or
without India, all books of account, registers, records and documents relating thereto and shall also be
deemed to include all borrowings, liabilities and obligations of whatever kind within or without India
then subsisting of the Reconstruction Bank in relation to its undertakings.
1. 27th March, 1997, vide notification No. S.O. 242(E), dated 25th March, 1997, see Gazette of India, Extraordinary, Part II,
sec. 3(ii).
3
(3) All contracts, deeds, bonds, guarantees, powers of attorney, other instruments and working
arrangements subsisting immediately before the appointed day and affecting the Reconstruction Bank
shall cease to have effect or to be enforceable against the Reconstruction Bank and shall be of as full
force and effect against or in favour of the Company in which the undertakings of the Reconstruction
Bank have vested by virtue of this Act and enforceable as fully and effectually as if instead of the
Reconstruction Bank, the Company had been named therein or had been a party thereto.
(4) Any proceeding or cause of action pending or existing immediately before the appointed day by
or against the Reconstruction Bank in relation to its undertakings may, as from the appointed day, be
continued and enforced by or against the Company in which the undertakings of the Reconstruction
Bank have vested by virtue of this Act as it might have been enforced by or against the Reconstruction
Bank if this Act had not been enacted and shall cease to be enforceable by or against the Reconstruction
Bank.
5. Provisions in respect of officers and other employees of Reconstruction Bank.—(1) Every
officer or other employee of the Reconstruction Bank (except a Director of the Board or the Chairman
and Managing Director) serving in the employment immediately before the appointed day shall, in so
far as such officer or other employee is employed in connection with the undertakings which have
vested in the Company by virtue of this Act, become, as from the appointed day, an officer or, as the
case may be, other employee of the 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 Reconstruction Bank if its undertakings had not vested in the
Company and shall continue to do so as an officer or, as the case may be, other employee of the
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 Company within such period.
(2) Where an officer or other employee of the Reconstruction Bank opts under sub-section (1) not
to be in employment or service of the Company, such officer or other employee shall be deemed to have
resigned.
(3) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) in any
other law for the lime being in force, the transfer of the services of any officer or other employee of the
Reconstruction Bank to the 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.
(4) The officers and other employees who have retired before the appointed day from the service of
the Reconstruction Bank and are entitled to any benefits, rights or privileges shall be entitled to receive
the same benefits, rights or privileges from the Company.
(5) The trust of the provident fund or the gratuity fund of the Reconstruction Bank and any other
bodies created for the welfare of officers or employees would continue to discharge their functions in
the Company as was being done hitherto in the Reconstruction Bank and any tax exemption granted to
the provident fund or the gratuity fund would continue to be applied to the Company.
(6) 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 Reconstruction Bank, no Director
of the Board, Chairman and Managing Director or any other person entitled to manage the whole or
substantial part of the business and affairs of the Reconstruction Bank shall be entitled to any
compensation against the Reconstruction Bank or the Company for the toss of office or for the
premature termination of any contract of management entered into by him with the Reconstruction
Bank