REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 1

PUBLISHED BY AUTHORITY

No. 17]

NEW DELHI, MONDAY, MAY 30, 1966/JYAISTHA 9, 1888

Separate paging is given to this Part in order that it may be filed

as a separate compilation.

MINISTRY OF LAW

(Legislative Department)

New Delhi, the 30th May, 1966/Jyaistha 9, 1888 (Saka)

The following Act of Parliament

received the

assent of

the

President on the 29th May, 1966, and is hereby published for general

information: —

THE UNIT TRUST OF INDIA (AMENDMENT)

ACT, 1966

No. 17 OF 1966

[29th May, 1966]

An Act further to amend the Unit Trust of India Act, 1963.

BE it enacted by Parliament m the Seventeenth

Year of the

Republic of India as follows: —

1. (1) This Act may be called the Unit Trust of India (Amend-

ment) Act, 1966.

(2) It shall come into force on such date as the Central Govern-

ment may, by notification in the Office Gazette, appoint.

Short

title and

com-

mence-

ment.

(155)

156

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II

Amend-

ment of

section 2.

2. In section 2 of the Unit Trust of India Act, 1963 (hereinafter

referred to as the principal Act),—

(!) after clause (c), the following clause shall be inserted,

namely: —

' (cc) "first unit scheme" mean* the unit scheme made

before the commencement of the Unit Trust of India

(Amendment) Act, 1966;';

(ii) after clause (j), the following clause shall be inserted,

namely: —

'(jj) "subsequent unit scheme" means any scheme made

after the commencement of the Unit Trust of India (Amend-

ment) Act, 1966;';

(Hi) in clauses (n), (o), (p) and (q), for the words "the

unit scheme", the words "a unit scheme" shall be substituted.

52 on 963

Amend-

ment of

section 4.

3. In section 4 of the principal Act, in sub-section (5), for the

words "the contributing institutions", the following words, brackets,

letters and figure shall be substituted, namely: —

"any contributing institution, and in making any such re-

fund the Board shall not make any discrimination between the

institutions referred to in clause (c) of sub-section

(2) or

between the institutions referred to in clause (d) of that sub-

section".

Amend-

ment of

section 19.

4. In section 19 of the principal Act, in sub-section (1),—

(i) after clause (c), the following clause shall be inserted,

namely: —

" (cc) formulating in relation to any unit scheme—

(i) savings and life insurance plan or plans in as-

sociation with or as the agent of, the Life Insurance

Corporation of India, but not including the life insurance

business; or

(ii) any other plan or plans,

under which a person may acquire an Interest in units;";

(ii) in clause (d), after the words "matters and things", the

words "as may promote the sale of units or" shall be inserted.

Amend-

ment of

section 20.

5. In section 20 of the principal Act, for sub-sections (2), (3) and

(4), the following sub-sections shall be substituted, namely: —

" (2) The Trust may borrow money from the Reserve Bank—

(i) repayable on demand or on the expiry of a fixed

period not exceeding ninety days from the date on which

Sue. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

157

the money is so borrowed, against stocks, funds and securi-

ties (other than immovable property) in which a trustee is

authorised to invest trust money by any law for the time

being in force in India;

(ii) repayable on demand or within a period of eighteen

months from the date on which the money is go borrowed,

against the security of the bonds which the Trust may issue

with the approval of the Central Government;

(Hi) on such terms and conditions and against the secu-

rity of such other property of the Trust as may be specified

in this behalf by the Reserve Bank for the purposes of any

scheme other than the first unit scheme:

Provided

that any amount

borrowed under

this

clause and outstanding at any one time shall not exceed—

(a) five crores of rupees in respect of each such

scheme; and

(b) ten crores of rupees in respect of all such

schemes in the aggregate.

(3) The bonds issued by the Trust under sub-section (2)

shall be guaranteed by the Central Government as to the repay-

ment of principal and the payment of interest at such rate as may

be fixed by the Central Government at the time the bonds are

issued".

6. After section 20 of the principal Act, the following sections shall

be inserted, namely:—

Insertion

of new

sections

20A and

20B.

"20A. The Reserve Bank may, from time to time, in its dis-

cretion pay to the Trust from out of the amount payable to the

Reserve Bank under sub-section (2) of section 25A any sum to

be utilised by the Trust solely for meeting the losses arising out

of, or any additional amount required in connection with, any

variation made by the Trust in the sale or re-purchase price of

a unit.

Special

contri-

bution by-

Reserve

Bank.

20B. The Trust may receive gifts, grants, donations or bene-

factions from Government or any other source and such gifts,

grants, donations or benefactions shall be treated by the Board

as capital or income of the first unit scheme or, as the case may

be, of any subsequent unit scheme according to the purposes for

which they are made and in the absence of any indication of such

purposes, they shall be treated as capital or income of such unit

scheme or schemes and to such extent as the Board thinks fit."

Grants,

donations,

etc. to

Trust.

158

THE GAZETTE OF INDIA EXTRAORDINARY

t^ART II

Amend-

ment of

section 21,

7. In section 21 of the principal Act,—

(a) In sub-section (1), for the words "shall make a unit

scheme", the words "may make one or more unit schemes" shall

be substituted;

(b) in sub-section (3), for the words "the scheme", the words

"any scheme" shall be substituted;

words "Every scheme" shall be substituted.

Substitu-

tion of

new

Chapter

for

Chapter V.

8. For Chapter V and sections 22 to 25 of the principal Act, the

following Chapter and sections shall be substituted, namely: —

'CHAPTER V

ALLOCATION AND DISTRIBUTION OF INCOME AND RESERVE FUNDS

Capital

of the

Trust,

22. (1) The capital of the Trust In relation to the first unit

scheme shall consist of—

(i) the initial capital,

(ii) the unit capital of the said scheme,

(vli) any reserves created for that scheme,

(iu) any amount borrowed for the purposes of that

scheme,

(u) any amount received for the purposes of that scheme

by way of gifts, grants, donations or benefactions from the

Government or any other source and treated as the capital

of that scheme under section 20B,

(vi) any other capital allocated to that scheme by the

Board having regard to the nature of such capital and other

relevant factors.

(2) The capital of the Trust in relation to any subsequent

unit scheme shall consist of—

(i) the unit capital of that scheme,

(ii) any reserves created for that scheme,

(iii) any amount borrowed for the purposes of that

scheme,

(to) any amount received for the purposes of that

scheme by way of gifts, grants, donations or benefactions

from the Government or any other source and treated as the

capital of that scheme under section 20B.

SEC. 1]

THE GAZETTE OF iKDlA EXTRAORDlNAnY

159

(v) any other capital allocated to that scheme by the

Board having regard to the nature of such capital and other

relevant factors.

(3) The capital in respect of a unit scheme shall be held

separately from the capital in respect of any other unit scheme

and such capital shall, subject to the provisions of this Chapter,

be applied solely for the purposes of that unit scheme.

23. The Income of the Trust shall consist of—

(i) In relation to the first unit scheme,—

(a) the income arising out of the capital referred to

in sub-section (1) of section 22,

(b) any gifts, grants, donations or benefactions

treated as the income of that scheme under section 20B,

and

the Board having regard to the nature of the income and

other relevant factors;

(ii) in relation to any subsequent unit scheme,—

(a) the income arising out of the capital referred to

in sub-section (2) of section 22,

(b) any gifts, grants, donations or benefactions

treated as the income of that scheme under section 20B,

and

Board having regard to the nature of the income and

other relevant factors.

Income ol

the Trust.

24. The income of the Trust in any year arising out of the

capital of the Trust relating to the first unit scheme shall be

allocated to the initial capital and the unit capital thereof in the

same proportion as the former bears to the latter at the end of

that year.

Allocation

of income

in respect

of first

unit

scheme.

25. (1) The interest payable for any year for any borrowings

by the Trust and the total amount of other expenses Incurred by

the Trust for that year for the purposes of the first unit scheme

shall be allocated and charged to the initial capital and the unit

capital thereof in the same proportion as is referred to in sec-

tion 24.

Allocation

of interest

and other

expenses,

i6o

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II

(2) Notwithstanding anything contained In sub-section (1),

if In any year the amount of expenses, other than interest allo-

cated to the unit capital relating to the first unit scheme, is more

than five per cent, of the income allocated in that year to that

scheme, only an amount equal to such five per cent, shall be

charged to that unit capital and the rest of the total amount of

expenses other than interest shall be charged to the initial capital.

(3) The interest payable for any year for any borrowings by

the Trust and the total amount of other expenses Incurred by the

Trust in that year for the purposes of any subsequent unit scheme

shall be charged to the unit capital of such scheme in such manner

and to such extent as the Board may, with the previous approval

of the Reserve Bank, determine.

(4) For purposes of this section, where expenses are incurred

in common by the Trust in relation to more than one unit scheme

such expenses may be allocated to the different schemes to such

extent and in such manner as the Board may, with the previous

approval of the Reserve Bank, determine having regard to the

nature and purposes of the expenses and other relevant factors.

Distribu-

tion of

i ncome.

25A. (1) The income allocated to the initial capital in any

year reduced by the interest and the amount of other expenses

charged for that year to the Initial capital may be distributed in

the prescribed manner among the contributing institutions

each case in proportion to their respective contributions.

(2) The income allocated in any year to the unit capital

relating to the first unit scheme reduced by the interest and the

amount of other

expenses

charged for that

year

such unit capital may, but not less than ninety per cent, of such

income so reduced, shall, be distributed in respect of that year

to the unit holders under that unit scheme.

(3) The income allocated in any year to the unit capital

relating to each of the subsequent unit schemes reduced by the

interest and the amount of other expenses charged for that year

to such unit capital may, having regard to the purposes of that

scheme and other relevant factors,—

(i) be distributed in respect of that year to the UBit

holders under that scheme in such manner and at such

percentage of the income so

reduced as the Board may

determine; or

SEC, 1]

THE GAZETTE OF INDIA EXTRAORDINARY

161

(ii) be carried forward and re-invested or otherwise

utilised for the benefit of the unit holders in accordance with

the provisions of that scheme.

25B. (1) The Trust may establish one or more reserve funds

by transferring such sums as it may deem fit out of the amount

of the income of the Trust not distributed to the contributing

institutions or unit holders under the provisions of this Chapter.

(2) Subject to the provisions of this Act, the amount in any

reserve fund created specifically for the purposes of any unit

scheme shall be applied or utilised only for the benefit of the unit

holders under that unit scheme and for such purposes and in such

manner as the Board may determine.

Reserve

funds.

25C. In this Chapter, "year" means the period in respect of

which the books and accounts of the Trust are balanced and

closed under sub-section (2) of section 26.'.

Definition.

9. In section 27 of the principal Act, for sub-section (1), the follow-

ing sub-section shall be substituted, namely: —

Amend-

ment of

section

27.

1 of 1956.

"(1) The affairs of the Trust shall be audited by one or more

auditors duly qualified to act as auditor under subjection (/) of

section 226 of the Companies Act, 1956 (hereinafter referred to

as the auditor) who shall be appointed by the Trust with the pre-

vious approval of the Reserve Bank and shall receive such remu-

neration as the Trust may fix.".

7 of 1964.

10. In section 32 of the principal Act, in sub-section (1),—

(i) after the words and figures "the Super Profits Tax Act,

1963,", where they occur for the first time, the words, brackets and

figures "the Companies (Profits) Surtax Act, 1964," shall be in-

serted;

(ii) for the words "or super profits tax", the words "super

profits tax, surtax" shall be substituted;

(Hi) in clause (a), after the words "super profits tax", the

word, ", surtax" shall be inserted;

(iv) in clause (c),—

Amend-

ment of

section 32,

7 of 1964.

(a) after the words and figures "the Super Profits Tax

Act, 1963,", the words, brackets and figures "or to surtax under

the Companies (Profits) Surtax Act, 1964," shall be inserted;

(b) . after the words "for the purposes of super profits

tax", the words "or surtax" shall be inserted.

162

THE GAZETTE OF INDIA; EXTRAORDINARY

[PART II—SEC. 1]

Amend-

ment of

Act 2 ol

1934.

11. In section 17 of the Reserve Bank of India Act, 1934, in clause

(4BBB) ,—

(i) the word "or" occurring at the end of sub-clause (i) shall

be omitted;

(ii) after sub-clause (ii), the following sub-clause shall be

Inserted, namely: —

"(iU) for the purpose of any scheme other than the first

unit scheme under the Unit Trust of India Act, 1963 on such

terms and conditions and against the security of such other

property of the Unit Trust as may be specified in this behalf

by the Bank;".

52 of 1963.

S. P. SEN-VABMA,

Secy, to the Govt, of India.

I'HINTED

IN INDIA BY THL CKNERM, MANAGER.,

GOVERNMENT OF

INDIA

PRESS,

M1MT0 BOAli, NEW DELHI AND PUBLISHED IIY THE MANAQER OF PUBLICATIONS,

OW.HJ, 1969.