 bill no 139 of 1985' the unit trust of india (amendment) bil4 1985  billfu1'ther to amend 'the unit trust of india act, 1963 ~ be it enacted by parliament in the thirty-sixth year of the republic of india as follows: -' 1 (1) this act may be called the unit trust of india (amendment) act, 1985  5 (2) it shall come into force on such date as the central government may, by notification in the official gazette, appoint short title and commence ment s2 of 1963 2 in section 2 of the unit trust of india act; 1963 ,(hereinafter refer-amend-' red to as the principal act),-"a:c  ment at sadlon z , (a) after clause (cb), the following aause shall ·be inserted, namely:-10 j7oflm '(cc) "general insurance corporatiori" means the general insurance corporation of indiaforrned under section 9 of the general insurance business (nationalisation) ac,t, 1972;'; (ob) after clause (1), the following clause shall be inserted, namely:-i, , - (fa) "public financial institution'~ means every financial institution,  other than the trust, specified by or under aection 4a of the companies act, 1956;';' 1 of 1, (c) for clause (i), the following clause shall be substituted, namely-:- 10" ,   - (i) "security" means-(a) any share, stock, bond, debenture or debenture tock, of, any body corporate; (b) any unit or sub-unit issued by, or other participation ·in 8 unit scheme framed by, any body or autpority (not 5 being the trust) outside india' or a mutual fund established outside india; and includes---(i) a government security 88 defined in section 2 of the public debt act, 1944; 10 180f 1944  (ii) a savings certificate to which the government savings certificates act, 1959 applies; 46 of 19'9, (iii) any security issued by anf local authority in india, or by the government of, or a local authority in, any such country outside india as 'may be approved by the reserve bank; 15 and (iv) any foreign security as defined in section 2 of the foreign exchange regulation act, 197a, as may be approved 46 of 1973 by the reserve bank;' amendmat of section 4 3 in section 4 of the principal act, in sub-section (5), for the words 20 "it may refund the whole or any part of such capital", the words ''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 l'lch capital as is in excess of its requireirients" shall "be substituted 4 after section j4 of the principal act, the following section shall be 25 inserted, namely:-c' 1diei'-tion of aew iicc-dod 14a  "14a if the chairman, whose appointment is whole-time, is of opinion that circumstances exist which render it necessary for him to "take immediate action in respect of any matter which is within the competence of the ~d and that the interests of the trust may be go prejudicially aftectejl:f such action is deferred until after the next meeting of the board, then, ,notwithstanding anything contained in clause (c) of lub-aection (2) of section 14, the chairman may take such action in respect of that matter as he deems necessary and for such purpose, he may exercise all powers and do all acts and things 35 wblch may be exercised or ~ done by the board, but in every such case, he shall, 88 &<ton as may be after the action is taken, make a written report to the board containing, a statement of the action taken and  the circumstances under which it wae taken:'    aattitu-5 for section 18 of the principal act the following section shall be 4  of substituted, namely:-newaee-uon for teetioa 18 '19 (1) subject to the provisions of this act and the rejulatioll8 ~ made under section 43, the trust may carry on and transact auy of of trust the following kinds of business in india, name1y:-(1) selling and purchasing units; 5 (2) investing in, and acquiring, holding or dispoaing of, securities and exercising and enforcing, all po~ and rights incidental thereto including protection or realisation of such investment and the taking over of the admfnh1tration of any property offered as security for such investment; 10 (3) granting of loans and advances upon the security of any movable or immovable property or otherwf8e; (4) accepting, collecting discounting, rediscounting, purcbuing, selling or negotiating or otherwise dealing with, any btu of exchange, hundies, promissory notes, coupon's, drafts, bills of lading, railway receipts, warehouse receipts, documents of title to goods, warrants, certificates, scrips and other mercantue inltru-, menta; (5) purchasing, selling or issuing parlicipation certificates in relation to any loan or advance granted by any' -pubuc financial !l0 ~nstitution or scheduled bank or su~h other institution as may be p~crlbed; : (6) keeping money "on deposit with companies or other bodies corporate, scheduled banks or such other tnntitutions as may be prescribed; (7) investing in any special paper or security fioated by the central government or the reserve bank or by any such foreijfl1 government or foreiem bank as may be prescribed; (8) fonnulating in relation to any unit scheme,-(4) savings and life insurance plan or plans under which a person may acquire an interest in units in asaoclation with or as the agent of, the life insurance corporation or the central government, but not including the life insur~ anee business; , 35 (b) savings and' insurance pl_n or plans under which a person may acquire an interest in units in association with or as the orgi~i of, the general rnsurance corporation but not including the general insurance business; or (c), any other plaq -,>r plans, under which a person may acquire an interest in units; (9) acquiring immovable property or any interest therein, the development (including construction) and sale of such property and ,the i!-nderinl! of financial and other assistance to any person for the acquisition of rny inu:novable property or any interest therein and for the develo1')ment (including construction) of such property; 45 (11) providing merchant banking and investment compa~ies, and other bodies corporate; advisory (11) providing' merchant banking investment advillbry senfees; ' r' ~ t - '":"'-,-(12) extending investment or fund or portfolio management services to persons resident outside india; (13) opening of an account or the making of an agency arrangement with a ~ank incorporated outside india; (14) buying or selling 0(, or entering into such other dealing 5 in, foreign exchange, as may be necessary for the discharge of its functions; (15) doing any other kind of business connected with mobilisation of savings or investments which the central government may authorise; 10 (16) generally, doing all such acts and things as may be ;incidental to or consequential upon the discharge of its functions  under this act i ~lanation-foro the purposl!s of cl~use (12) and clause (14), the expressions "persons resident outside india" and "foreign ex- 15 change" shall have the meanings respectively assl~· to them in section 2 of the foreign exchange regulation act, 1973, 46 of 1973   (~) subj~t to the provisions of this act and th~ regulations made under section 43, the trust may carry on outside india also any of the kinds of business mentioned in clauses (1), (2), (4), (6),!lo (7), sub-clause (e) of clause (8) and clauses (11), (12) (13) and «is) of sub-section (1)' 6 after section 19a of the principal act, the following section hall be inserted, namely:-insertion of new section 19b special provision for enforcement flf claim 1:y the trusl  '19b (1) where a company or other body corporate, in breach of !l5 any a !tteement makes any default in repayment of any loan or advance or any instalment thereof, or in meeting its obligations or otherwise fails to comply with the terms of its agreement with -the tnlst tben, without preiudice to the provisions of section 69 of the transfer of property act 1982 any officer of the '!';rust f(enerally or 30 4 ol1882 specially authori'sed by the trust in this behalf may apply to the c?urt for one or more of the following reliefs, namely:--= (a) for an order for the sale of the property pledged, mortgaged; hypothecated- or aasigned to the trust as security for the loan or advance, or -35 (b) for tram;ferrin~ the management of the company or other body corporate to the trust, or  (e) for an ad interim iniunction where there is apprehension of the machinery -or the equipment being removed from the pre:  misesof the company or other body corporate without the per- 40 mission of the trust  i (2) an ;lpplication uftder sub-section (1) shallstate the nature ajld -  extent of the liability of the company or other body corporate to the -tj"ust, the grounds on- which it ii made and such other ~cu1ars as may be prescribed· ," 4" (3) when the application is f~r the reliefs mentioned in subclauses (a) and (c) of sub-section (1) the court shall pass an ad interim order attaching the security or so much of the property ,of the company or other body corporate as would on'being sold realise in its ~ estimation an amount equivalent in value to the outstanding liability of the company or other body corporate to the trust together with the costs of the proceedings taken under this section with or without an ad interim hijunction restraining the company or other body corporate from transferring or removing its machinery or equipment j() (4) where the application is for the relietmentioned in sub-clause (b) of sub-section (1) the court shall grant an ad interim injunction restraining the company or other body corporate from transferring or removing its machinery or equipment and issue a notice calling upon the company or other' body corporate to show cause on a date to be specified in the notice why the management of the company or other body corporate should not be transferred to the trust (5) before passing any order under sub-section (3) or sub-section (4) the court may if it thinks fit, examine the officer making the application 20 (6) at the same time as ,it passes an order under suj>section (3), the court shan issue to the company or other body corporate a notice accompanied by copies of the order, the application and the evidence, if any, recorded by it calling upqn the company or other body corporate to show cause on a date to be specified in the notice why the ad interi,m nrder of attachment should not be made absolute or th~ iniunction conflnned (7) if no cause is shown on or before the date s'ooctfied in the notic!" unner- sub-spctions (4) and (6), the court shall forthwith make the ad intcr'm orner ahsolute ~no riirecl the sale ot the attached nrooertv or trimmer the mana~ement of the comp~ny or other body - corporah- to the truc:t, orconflrm the injunction (8) if cause is ~no~'i7n the court shell procepd to investi~ate the claim of the trllst an~ thf> provisions of the code of civil procedure 1908 shall as far ac: u  acticable ~typly to sl,ich proceedin~s ' 35 (9) on an investigation made under suh-section (8) the court shall pass an order-, (a) con firm in/! the order of attachment and directin~ the sale i")f tre rttac'heri nrooerty; or (b) 't!'1rvinrr the orde" of attarhment so as to release a 'dortion of th~ nropertv frnm rttachme'1t rnd (firectin~ the 'sale of the r!"n'u'iinfipr of the attaebed pronert,r: or (c) re1easinp' the pr01jer tv from att"lchrnent if it is ~atfsfled that it is nl'lt n~e<;sary in the ',intel"ests of' thp trust; or (d) ,eonflrminl'" or '"'tc'ltfng the iniunctiotl; or 45 (e) transferring' thq man:u?;ement of thp companvor ouier b'ldv c'1')1"'l)orate to the trl1st or reiedin(l' thf' claim made in this behalf: provided that when making any, order undej' clause (c), ~ court may make such further orders as it thinks necessary to protect the interests of the trust, and may apportion the costs of the prc>--' ceedings in such manner as it thinks fit: provided further that unless the trust intimates to the court 5 that it will not appeal against any order releasing any property from attachment, such order shall not be given effect to until the expiry of the period fixed under sub-section (12) within which an appeal may be preferred, or if an appeal is preferred, unless the court empowered to hear appeals from the decisions of the said court other- j 0 wise directs untfl the appeal is disposed of s of 1901 (10) an order of, attachment or sale of property under this section shali be ~arrled into effect as far as may be practicable in the manner provided in the ~e of civil procedure, 1908, for tbe _ attachment or sale of property in execution of a decree, as if the j 5 trust were the decree-holder (11) an order under this section transferring the management of a company or other body corporate to the trust sliah be carried into effect as far as may be practicable, in the manner provided in the code of civil procedure, 1908, for the possession of immovable pro- 2 , of ito& perty or the delivery of movable property in execution of a decree,  as if th~ truat we:re the decree-holder (12) anv 'party aggrieved by an order under sub-section (7) (:jr sub-section (9) may, within thirtv days from the date of the ot"~, 8l)peal ~ the court empowered to hear apperls from the decisions of 115 the court which l)a'sre1 the o~er anri the atyoehate court may after hearing the parties 'pass such orders as it thinks proper   (13) nothing in this section shall be construed, where proceedfnp's for liquidation in respect of the comnanv or other body corporate h~v~ commenced """fore an application is made under sub~ion (ll 30 as p,ivin~ to the trurt any preference ovet" the other creditors of the company or other body corporate not conferred on it by any other law ' \' ,  ~ (14) for the remov'll of doubts, it is herebv declared that any court comootef't to tn"ant an ad interim injunction· und~ this section 35 shall also have ole power to appoint ar~iv'pr ~nd to exercise all other nowers incidental thereto  (15) for the 'purpose of thjq section "court" means the ffigh court within the lo~al l'mits of whose jurisdiction- ·(i) tbe·ciefendant or respondent, or where thri is more ·than 40 one defendant or re9!)ondent anyone of them-(1') has his registered offtce; 01'   - (2) carries on the whole or part of his busilietss, at the time of the commencement of any legal proceedings, against him under this act; or (ii) the cause of action fql' such legal proceedings, wholly 5 or in part, arises  (16) the provisions of' this 'section shall not apply to or in relation to any proceedings (whether by way of suits or appeals or other proceedings) under this act pending before a district judge or an additional district judge or a high cou,rt, at the commence-10 ment of the unit trust of india (amendment) act, 1985' 7 in section 20 of the principal act, in sub-section (1), for the words amend- meat of "the 'trust may borrow", the words "the trust may boj'l'ow, whether section 20  in india or outside india," shall be substituted 8 after section 20b of the principal act, the followihg section shall idiertion 15 be inserted, namely:-of dew aeetion 2oc !-ower to transfer riahta "2oc the rights and interests of the trust (including any other rights incidental thereto) in relation to any loan or advance granted, or any amount recovarable, by it maybe transferred by the trust, either in whole or in part, by the execution or issue of any instrument, or by the transfer of any instrument by endorsement or in any other manner in which the rights and interests 'in relation to suc:b loan or advance may be lawfully transferred, and the trust may, notwithstanding such transfer, act as the trustee within the meaning of section 3 of the indian trusts act, 1882, for the transferee" 2 of 1882 \ 9 in section 21 of the principal act,- ' ameddmeat of aec:tiod 21 'i (a) ijn sub-sedion (1), for :the words "unit schemes", the words "unit schemes, including one or more unit schemes for issuing units to persons resident outside india in' such foreign currencies, as the trust may deem fit" shall be 'substituted; (b) in sub-section (2), fql' clause (a), the following clause shall be substituted, namely:-"(4) the issue of units and the face value of each unit: provided that the face value of each unit shall, where web value is in indian currency, be not less than ten rupees or more than one hundred rupees and where such val~ is in any fqreign currency, be in multiples of tenj" 10 in section 25a, to sub-section (2), the following proviso shall be added, namely:-amendment of iection 25a "provided that in relation to any year in which the trust has declared a dividend of not less than ten per cent on the unit capital, the requirement as to distribution of not less than ni~ety per cent 5 of such income in such year as so, reduced shall not apply" , ,  11 in section 43 of the principa~ act,-amendmemtof section 43 i (a) in sub-section (1), for the words "the board may, with the previous approval of the development bank," the words "the board, 'with the previous ~pproval 'of the development bank, may, by noti- 10 fication in the official gazeue," ·shall be substitute~; (b) in sub-section (2), for clause (i), the following clauses shall be substituted, namely:- "(i) the institutions ,to w'hich'loans or advances may ~ gi-anted or with which money mlily be kept in deposit; , ' 15 (ia) special papers or securities floated by governments or banks· in which investment may be made; (ib) the particulars which may be included in an applica-'tion u,rder section 19b;"; (c) flfter sub-s~tiori (3), the following sub-section shall be 120 inserted, namely: -  "(4) every regulation made under this act shall be laid,was soon as may be, after it is made, before each house of parliamenf, while it is in session, for a total period of thirty days which may be comprised in one session or: in two 25 or more successive sessions, and if, before the expiry of the session immediately follow'ng the session or' th,e successive sessions aforesaid, bpth hous~ agree in making any modiflca~ tion in the regulation or both houses agree that the regulation should not be made, the regulation shall there"after have effect so only in such modified form or be of nq",~ect, as  the case may be; so, however, that any such modification or annulment shall ' be without prejudice to the validity of anything previously done under that regulation," the unit trust of india has been functioning for over wo decadell n~w ~t ¥s r~~ye4 til~' fc;~ ot~, invasws and h pown ijq~tlu1~"uy n s1@1~ ~q ~~g~h with ill growth it 411 to wter utq~~ th~ r~ur~ it iiwpili~ ~4 g~~enttt iqcome ud profit ~roulh a v~fif:,ty of inv~s~ent bctivitieei the pr~cipal obj~tive c)f tq~ ~ilj, is to yriq,n th~ s~o~ f?~ ~, b~i­ness which the" ~t can transac;t to ~n~q~ ~~ 'l'~t to ~tfn11' ~q­nelise the funds mobilised by it from the public' into more productive wy~nt'l~~t q~t1e~ ~oth ip ~\ atld ql'tii~ india this wqwd provid1 for' a goqd ~~d ifqwing  t~ to tqe unit holder and the truat wouw ~,se' itt o~j,ec:tjve by optimum utiusation of oi>~tuniti for inw'strp~nt ' apart from the above, the bill also provides fo~ man~~ment of ~~vestm~~ by non-residents, merabant banking, direct lendbig, lji~, cupcqun~g, leuing and other matters, including b special provision' f~~ enforcement of the claims of the trust     the bill seeks to  achieve the above objectives nilw dblbij the 19th july, 1985 vishwanath pratap singh ~  ,   ',',   - memorandum regarding delegated legislationclause 9 of the bill ,seeks to amend section 21 of the unit ·trust of india act, 1963 relating to the power to make schemes so as to enable  the trust to include therein the issue also l)f units of such face value in such deaignated foreign currency in multiples 'of ten as the t1:ust may specify it is also being provided therein that the t,l'ust may make one or more unit schemes for issuing units to" persons resident outside india, in such foreign currency as the trust may deem fit clause 11 of the bill seeks to amend section 43 relating to the power to make' replatio~s so as to provide therein' that the power to make such regulatiolls with respect to the institutions to which loans or advances may be ~ted or with which money may be kept on deposit; special papers or securities floated by government or banks in which  investments may be made and the particulars 'which may be included in an application under' the proposed new section 19b ·  opportunity is also being taken to 8illend sub-section (1) of section ~3 of the act by the aforesaid clause 11 to provide therein that the trust may make regulations, by notification in 'the ofticial gazette it is alao proposed to insert ne; sub-section (4) in that section for laying ot regulations made under the act before each house of parliament ·  · the matters with respect to which regulations may be made are matters of procedural detail the delegation of legislative power itt, therefore, of a nonnal in character  z in this act, unless the context otherwise requires,-definitions - - - - - · 18 of 1944 ,(i) "securities" means shares, debentures, bonds and other stock of any company or other body ~rpora:te, whether·· incorporated in india or outside, and securities issued by any local authority in india or by the government of, or a local authority in, any such cqpntry outside india u may be approved by the rasei've bank and includes goyemment security as defined in section 2 of the public debt act 1944, but does not include mortgages on immovable property; initial capital (5) if at any time the board is of opinion that th~ amount of the initial capital is in excess of the requirements of the trust, it may refund the whole or any part of such capital to any contrlbtlting institution, and in making any such refund the board shall not make any discrimination between the institutions ~ferred to in clause (c) of sulhlection (2) or bet-ween the institutions referred to in clause {d) of that sub-section: provided that where only a part ,is so refunded the amount to be refunded to each ~ch institution shall bear, as tar 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 sucb basis as the central government may specify in this behalf, regard being had to the  real or exchan,,able value thereof  - -  -  chap1'er iv powers and ftmctions 0  the' trustbuaineaa of trust it (1) the trust may carry on and transact any of the following kinds of business, namel;y: - (a) selling and purchasing wiits; ii (b) investing in, acquiring, holding or disposing of, securities and exercising and enforcing all powers and rights incidental thereto; (c) keeping money on deposit with scheduled banks or with such other institutions as may be prescribed;  ~1 (ee) formulating in relation to ~y unit schem~-(i) savings and life insurance plan or plans in association with or as the agent of, the life insurance corporation of india, but not inc1udin~ the ufe insurance business, or (~i) any pther pl4n or plans, under which a person may acquire an interest ill units; (4)' il~elral1y jioing all ~ ill8t~r~ 81)4 thi~ 8& dlay pro-~o~ ~e ~e of ~ts o~ as may pe incidap,1;1jl tq qr conqquential upon the i;tiscpafge of itj fu~ions u~r tliis act  (2) the trust shall not take on lease, purchase or otherwise acquire except for its own use' any immovable property or any interest iheretn - - - - 20 (1) the trust may botrow from,;f11y authority or person, not be:inf qovemrnent ~ ~~ ~~rve ~':ill~!l~t suell ~c1:'rit;y 'j'lp on borrowil'll powen ~uc~ terms ~nd condit~pnf as :i!l!y ~ ~ 1!pqn , , - 3~ (1) !'oj' t~e pu~ qf provicijng f~~ fqr ~pa~op' m t~o unit acbeme"s in~~, pf¢lts ~d lain, ~in, o9;t qf ~ ~~u~si~, i;apl~ng, ~~  ment or dijposal of securities by the trust, the board may mw'one or more udit ichemes (?l ~l\hie~ ~ tjle provi~oiw 9f th\s aq, ~d 148 ~lu~ticmj 111""-under section '43 a scheme made under bub-section (1) may providlt 'or-(a) th, i~u~ of un~ts ~n,4 the 1a~ v~u~ of ~h ~i~~ which &~q nqt be in! ~~an te!1 rup~ ~~~or~ t~ltn o~e ·tt1jn~4,rpp,; - - - - - reiulatiollf 43 (1) the board may, with the previouf approval of the develop- ment bank, make regulation n~~ ~ppf"~nt with this act:- to provide for an matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this ad (2) in pariieular and without prejudice to the ~nera1i' ()f tjte fo~ going power, such regulations may provide tor-- - - - - (i) the institutil'ms with which money may be kept on depoait; - - - - " , a bill further to amend the unit trust of india act, 1983 (shri vibhwanath pratap singh, minister of finance) 