3. Transfer of initial capital.—(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.
4. Undertaking of Trust to vest in specified company and specified undertaking of Trust to vest
in Administrator.—(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.
5. General effect of vesting of undertaking or specified undertaking in specified company or
Administrator.—(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
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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.
6. Provisions in respect of officers and other employees of 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.