Holding

Both the Administrator of the Specified Undertaking of UTI and the UTI Trustee Company Private Limited are financial institutions under the DRT Act, and the DRT has jurisdiction to entertain their claim for recovery of debts due to them.

Summary

Southern Petrochemicals Industries Corp. Ltd. defaulted on a loan of Rs. 101 crore advanced by a consortium that included the Unit Trust of India (UTI). After the UTI was restructured under the UTI (Transfer of Undertaking and Repeal) Act, 2002, the Administrator of the Specified Undertaking of UTI and the UTI Trustee Company Private Limited (the "Specified Company") filed a claim under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (DRT Act). The company contended that the two respondents were not "financial institutions" within the meaning of the DRT Act and thus the Debt Recovery Tribunal (DRT) lacked jurisdiction. The Supreme Court held that, by virtue of the deemed amendment of Section 4‑A of the Companies Act and Section 18 of the UTI Act, both respondents qualify as financial institutions under Section 2(h) of the DRT Act. Consequently, the DRT had clear jurisdiction to entertain their claim for recovery of debts owed to them, and the respondents were not acting merely as agents or trustees of the Central Government. The High Court’s decision was affirmed.

Issues considered

Whether the Administrator of the Specified Undertaking of UTI and the UTI Trustee Company Private Limited are "financial institutions" within the meaning of Section 2(h) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Assuming they are financial institutions, whether the action before the Debt Recovery Tribunal is for recovery of debts due to them personally and not on behalf of any other person.

Legislation cited

Banking Regulation Act, 1949s. 6
Companies Act, 1956s. 4-A
Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. 17, s. 19(1), s. 19(2), s. 2(g), s. 2(h), s. 34, s. 4-A
Unit Trust of India Act, 1963s. 19, s. 3, s. 4

Subjects

financial institutionDebt Recovery TribunalUTI Act 2002Section 4-A Companies Actjurisdictionstatutory authorityagencytrusteecorporate restructuring

Judgment

A SOUTHERN PETROCHEMICALS INDUSTRIES CORPORATION LTD.
v.
ADMINISTRATOR OF SPECIFIED UNDERTAKING OF UNIT TRUST OF
INDIA AND ORS

DECEMBER 13, 2006
B
[RP.SINGH AND AL TAMAS KABIR, JJ.]

Recovery of Debts Due to Banks and Financial Institutions Act, 1993:
C Sections 2(g), (h), 17, 19(1), (2) and 34.
Financial institutions-Under a common loan agreement executed
between the UT!, IDBI, IFCI and /CIC/ and the company a sum of Rs. 101-
crores was advanced to the company for its project-UT/ also advanced a
sum of Rs. 25 crores against privately placed debentures-The company
D accumulated liabilities exceeding Rs. I, 0001- crore and defaulted in its
obligation to the UT/ under the common agreement-UT! filed a claim under
the DRT Act-Company filed an objection alleging that the Administrator of
Specified Undertaking of Unit Trust of India and UT/ Trustee Company
Private Limited (''specified company"), not being "financial institutions"
within the meaning of the DRT Act, the Debt Recovery Tribunal (DRT) had
E no jurisdiction to decide the claim-DRT dismissed the objection-The
Appellate Tribunal held that they were "financial institutions" as defined by
Section 2(h)(i) of the DRT Act-The High Court rejected the writ petition
filed by the company-Correctness of-Held: The "Specified Company" and
the ''Administrator of the Specified Undertaking" are financial .institutions-
F Hence, both are entitled to sue as financial institutions-The DRT had,
therefore, undoubted jurisdiction to entertain their claims-The Administrator
and the Specified Company were not acting either as agents of the Central
Government or as trustees-UT! (Tra11sfer of Undertaking and Repeal) Act,
2002, S.18--Companies Act, 1956, S. 4-A.

G Words & Phrases:

"Financial institutions"-Meaning of-In the context of Section 2(h)(i)
of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Under a common loan agreement executed between the Unit Trust
II 932
- SOUTHERN PETROCHEM. INDUS. CORPN, LID.'" ADMIN. OF SPECIFIED UNDERTAKING OF U.TJ. OF INDIA 93 3
of India (UTI), the Industrial Development Bank of India QDBI), IFCI and ICICI A
Ltd. and the appellant, a sum of Rs. 10/- crore was advanced to the appellant
for its project The UTI also advanced a sum of Rs. 25 crores against privately
placed debentures. The appellant-company accumulated liabilities exceeding
Rs. 1,000/- crore and defaulted in its obligation to the UTI under the common
agreement.
B
The UTI filed a claim under the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (DRT). The appellant filed an application for
dismissal of the said claim on the ground that respondents Nos. 1 and 2, not
being "financial institutions" within the meaning of the DRT Act, the Debts
Recovery Tribunal had no jurisdiction to decide the claim. The Debts Recovery C
Tribunal dismissed the said application. The Appellate Tribunal held that
respondents Nos. 2 and 3 were "financial institutions" as defined by Section
2(h)(i) of the DRT Act The writ petition filed by the appellant was also rejected
by the High Court. The High Court held that the action brought against the
appellant-company by respondents Nos. 1 and 2 for recovery of debts due to
them was rightly entertained by the Debts Recovery Tribunal constituted under D
the DRT Act Hence the appeal.

The following questions arose before the Court:-

(1) Whether respondents Nos. 1 and 2, namely, the Administrator of
Specified Undertaking of Unit Trust oflndia and UTI Trustee Company Private E
Limited are "financial institutions" within the meaning of that term in the
Recovery of Debts due to Banks and Financial Institutions Act, 1993?

(2) If the answer is in the affirmative, whether the action brought by
them before the Debts Recovery Tribunal is for recovery of debts due to them
from the appellant and not due to any other person on whose behalf the aforesaid F
respondents are suing?

Dismissing the appeal, the Court

HELD: 1.1. By reason of the deemed amendment of Section 4-A of the
Companies Act, 1956, the "Specified Company" and the "Administrator of G
the Specified Undertaking" come with the definition of "financial institutions"
as defined under Section 2(h) of the Recovery of Debts due to Banks and
Financial Institutions Act, 1993 (DRT Act). (948-F, GI

1.2. By reason of section 18 of the UTI (Transfer of Undertaking and H
A
934 SUPREME COURT REPORTS [2006] SUPP. JO S.C.R.

Repeal) Act, 2002, both respondents Nos. 1 and 2 stand substituted. Both are
-
entitled to sue as financial institutions and the question whether they have an
enforceable claim must be decided in the facts and circumstances of each case.
There is no uncertainty because the assets possessed by these two identities
are clearly enumerated in Schedules I and II of the UTI Act, 2002. Therefore,
B the use of the words "as the case may be" in Section 18 of the UTI Act, 2002
does not introduce any element of uncertainty. [949-B-C]

Krishna Filaments limited v. Industrial Development Bank of India,
(2004) 118 Company Cases 356, W.O. Holdsworth v. State of UP., [1958)
SCR 296, Chhagan Lal Magan Lal (P) ltd. v. Municipal Corporation of
C Greater Bombay, (1974) 2 SCC 402 and Gujarat State Financial Corporation
v. Natson Manufacturing Co. Pvt. Ltd., (1979] 1SCC193, referred to.

2.1. The Scheme of the UTI Act, 2002 discloses that the Unit Trust of
India created under the Unit Trust of India Act, 1963 ceased to exist and in
its place the Specified Company and the Administrator of the specified
D undertaking of the Trust were created which took charge of all the properties,
business, assets, rights etc. of the erstwhile Unit Trust of India. The initial
capital of the Trust stood transferred to and vested in the Central Government
under Section 3(1) of the Act. Sub-section (2), however, mandated that the
initial capital contributed by the named contributors shall be refunded by the
E Central Government to such extent as may be determined by it. [949-D-E]

2.2. The UTI Act, 2002 by Section 4 thereof vested in the specified
company the undertaking of the Trust (excluding the specified
undertaking) for such consideration and on such terms and conditions as
may be mutually agreed upon between the Central Government and the
F subscribers to the capital and the specified company. The decision of the
Central Government as to whether any business, assets, !!abilities or
properties represent or relate to the undertaking or specified undertaking
is made final. If there remained any business, asset or property which was
not represented or related to the undertaking or specified undertaking that
vested in the Central Government. In this manner, the erstwhile Unit Trust of
G India ceased to exist and in its place a specified company and an Administrator
of the specified undertaking of the Trust came into existence. The transfer
and vesting of assets, rights etc. in these two bodies is in the widest possible
terms as would be obvious from a plain reading of Section 5 of the UTI Act,
2002. (949-F, G, H; 950-A)

H
SOUTilERN PElROCHEM. INDUS. CORPN. LTD. v. ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INDIA 935

2.3. The fact that the management is carried on by the Administrator A
of the specified undertaking on behalf of the Central Government which is
authorized to issue directions to the Administrator does not detract from the
fact that the "specified undertaking" vests in the Administrator. The wide
sweep of the language employed in Section 5 of the Act leaves no manner of
doubt that the vesting in the Administrator or in the Specified Company is B
complete. The powers vested in the Administrator under Section 10 of the
Act cover almost every power of manag~ment and administration.
[951-C, D, E]

2.4. The Admiuistrator of the specified undertaking is, therefore,
constituted as a statutory authority under the Act with wide powers and C
functions vested in him in relation to the specified undertaking which also
stand vested in him. When he seeks to recover dues owing to the specified
·undertaking he exercises his own authority as Administrator and assumes
powers which are vested in him by law. There is nothing in the Act which
may justify the submission that the specified company acts as a trustee. It
manages and executes the schemes contained in Schedule I of the Act in D
accordance with the provisions of the Act. [952-G, H; 953-A)

State Bank of India v. Special Secretary, land & land Revenue &
Reforms & land & land Utilisation Deptt. of W.B., [19951Supp.4 SCC 40,
referred to.
E
3.1. The vesting in the Administrator or the Specified Company is
complete. The concept of mere vesting of management cannot be imported into
the scheme of the Act. The Administrator and the Specified Company were,
therefore, fully authorized in law to recover the dues from the appellants as
"financial institutions". The Debts Recovery Tribunal had, therefore,
undoubted jurisdiction to entertain their claims. (953-FJ F
3.2. Respondents Nos. 1 and 2 were not acting either as agents of the
Central Government or as trustees. It is, therefore, held that they have acted
in the exercise of power vested in them by the UTI Act, 2002 and in their own
right. [953-GJ
G
CIVIL APPELLATE JURISDICTION : Civil Appeal No, 5782 of2006.

From the Final Judgment and Order dated I 0.8.2004 of the High Court
of Judicature at Bombay in Writ Petition No. 5758 of 2004.

K.K. Venugopal, Santosh Paul, Rai Mehta, A.K. Rao, Rajeev Sharma, H
936 SUPREME COURT REPORTS [2006) SUPP. 10 S.C.R.

A M.J. Paul for the Appellant.
Vikas Singh, ASG, R.F. Nariman, Rakesh Dwivedi, Lalit Mohan Tyagi,
T.S. Doabia, Rajiv Kapur, Arti Singh, Abhishek Chaudhary, Virula Sinha, Piyush
Vats, Ajit Singh, Adarsh Upadhyay, Gaurav Librehan, Saad Shervani, Sanjay
Kapur, T.A. Khan, V.K. Verma, Rajesh Srivasatava for the Respondents.
B
The Judgment of the Court was delivered by

B.P. SINGH, J. Special Leave granted.

In this appeal by special leave, the appellant M/s. Southern
C Petrochemicals Industries Corp. Ltd. has impugned the judgment and order
of the High Court of Judicature at Bombay dated August l 0, 2004 in Writ
Petition No.5758 of 2004 upholding the order passed by the Chairperson of
the Debts Recovery Appellate Tribunal in Misc. Appeal No.132 of 2004.
The High Court held that the action brought against the appellant company
by respondents 1 and 2 herein for recovery of debts due to them, was rightly
D entertained by the Tribunal constituted under the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993, which had jurisdiction to entertain
the claim. The objection to the jurisdiction of the Debts Recovery Tribunal
was taken at the threshold and, therefore, in this appeal we are not concerned
with the merit of the claims of respondents l and .2.
E
The questions which arise for consideration in this appeal are whether
respondents l and 2, namely, Administrator of Specified Undertaking of Unit
Trust of India and UTI Trustee Company Private Limited are "financial
institutions" within the meaning of that term in the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the
F 'ORT Act'). If the answer is in the affirmative, whether the action brought
by them before the Debts Recovery Tribunal is for recovery of debts due to
them from the appellant herein, and not due to any other person on whose
behalf the aforesaid respondents are suing.

The factual background in which these questions arise is as follows:-
G
Under a common loan agreement dated October 1, 1992 executed between
the Unit Trust of India (for short 'UTI'), the Industrial Development Bank of
India (for short 'IDBI') as the lead institution, IFCI, respondent No.4 herein,
ICICI Ltd., respondent No.5 herein, and the appellant herein, a sum of Rs. l 0
H crore was advanced to the appellant for its project on the terms and conditions
SOUTHERN PETROCHEM. INDUS. CORPN. LTD."· ADMIN. OF SPECIFIED UNDERTAKING OF U.Tl. OF INDIA !SINGH. J.J 93 7
contained therein. The UTI also advanced a sum of Rs.25 crores against A
privately placed debentures. The appellant Company accumulated liabilities
exceeding Rs.1,000 crore and defaulted in its obligation to the UTI under the
common loan agreement. The Reserve Bank of India was contemplating a
restructure scheme pursuant to which all the creditors of the appellant company
met in September, 2003 to consider proposals for reduction in the rate of
interest and fresh scheduling of re-payment etc. There was a general consensus B
among the other creditors but the Unit Trust of India did not agree with the
suggested scheme and instead filed a claim under the ORT Act being O.A.
No.237 of2003.

At this stage, it may be noted that under the UTI (Transfer of Undertaking C
and Repeal) Act, 2002 (hereinafter referred to as 'UTI Act, 2002'), respondent
No. I, the Administrator of Specified Undertaking of Unit Trust of India, and
respondent No.2 UTI Trustee Company Private Limited, were created. The
Unit Trust of India Act, 1963 was repealed and the Board of Trustees referred
to in Section 10 of the said Act stood dissolved.
D
In O.A. No.237 of 2003, the appellant filed a Misc. Application on
December 12, 2003 praying for dismissal of the O.A. on the ground that
respondents 1 and 2 not being "financial institutions" within the meaning of
that term in the ORT Act, the Tribunal under the Act had no jurisdiction to
entertain and decide the application filed by respondents l and 2 for alleged E
recovery of debts due to them. The Debts Recovery Tribunal by its order of
February 12, 2004 dismissed the said application. The appellant challenged
the order of the Tribunal before the Debt Recovery Appellate Tribunal but
the appeal was also dismissed on May 5, 2004. The Appellate Tribunal held
that respondents l and 2 were "financial ·institutions" as defined by Section
2 (h) (i) of the ORT Act and, therefore, the application by them for recovery p
of debts due from the appellant was maintainable under Section 19 of the
DRT Act.

The Appellate Order was challenged before the High Court of Bombay
in writ petition No.5758 of 2004 which was also rejected on August 10,
2004. The appellant has preferred this appeal by special leave impugning the G
judgment and order of the High Court.

We may very briefly notice the findings recorded by the High Court.
The High Court held that the provisions of Section 18 of the UTI Act, 2002
has the effect of substituting in every Act, Rule, Regulation enacted by the
H
938 SUPREME COURT REPORTS [2006) SUPP. 10 S.C.R.

A Parliament and/or Notification issued thereunder by the Central Government,
the names of respondents I or 2 in place of the words "Unit Trust of India",
as the case may be. In view of the provisions of Section 18, no further
amendment was required to be effected separately and independently in every
Act, Rule, Regulation enacted by the Parliament. The whole purpose of
Section 18 was to bring about this effect so that it became unnecessary to
B make numerous amendments in the various Acts, Rules arid Regulations etc.
The Parliament had the legislative competence to enact such a provision
which it has done. Referring to the Companies Act it held that by virtue of
the provisions of Section 18 of the UTI Act, 2002, the provisions of Section
4A of the Companies Act also stood amended. As a result, instead of words
C "Unit Trust of India" found in Clause (v) of sub-section (l) of Section 4A
of the Companies Act, the names of respondent I or 2, as the case may be,
stand substituted. As a necessary consequence fes'pondents I and 2 are
deemed to be "financial institutions" under Section 4A of the Companies
Act. Such being the legal effect respondents I ana 2 shall also be deemed
to be "financial institutions" under Section 2(h) (i) of the ORT Act.
D Consequently, the application filed by respondents I and 2 was maintainable,
they being "financial institutions" suing for the recovery of debts due .to
them.

The High Court also negatived th·e contention urged on behalf of the
E appellant that even if respondents 1 and 2 were financial institutions, they
could not maintain the Original Application before the Debts Recovery
Tribunal since they were suing in the capacity of debenture trustee holders
or as agent of the Central Government, and riot cfaiinliig recovery ofilinount
due to them. The judgment of the Bombay High Court in Krishna Filaments
limited v. Industrial Development Bank of India & Ors., (2004) I I 8 Company
F Cases 356 was distinguished on facts.

Shri K.K. Venugopal, senior advocate, appearing on behalf of the appellant
advanced four main submissions before us. Firstly, ·he submitted that the use
of the words "as the case may be" in Section 18 of UTI Act, 2002 introduced
an element of uncertainty. Section 18 seeks to substitute 'in the place of the
G Unit Trust of India, the names of respondents 1and2 herein in all Acts, Rules
or Regulations etc. This provision does not lay down with any certainty as
to which of the two respondents shall be deemed to be a financial institution
in a particular Act, Rule or Regulation. The use of the words "as the case
may be" could not be included in a definition clause. It is not permissible
H to say in a definition clause that in each case it must be .discovered which
SOUlllERN PETROCHEM. INDUS. CORPN. LTD. v. ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INDIA !SINGH. J.1 939

of the two names is more appropriate. According to him, the language of A
Section 18 does not at all give effect to the purpose for which it was enacted.
Secondly, he submitted that under the DRT Act, the debt sought to be
recovered must be due to the financial institution. A financial institution
acting-Eis an agent cannot claim on behalf of its principal which is not a
financial institution. The claim must be in its own right and not on behalf
of its principal which is not a financial institution. Relying on the provisions B
of the Act he contended that the Administrator acts as an agent of the Central
Government. The legislative scheme of the OTI Act, 2002 disclosed the
existence of principal agent relationship and, therefore, as such agent the
Administrator could not maintain a claim under the DRT Act. Similarly, a
trustee also could not invoke the provisions of the DRT Act. He submitted C
that the term "vested" may have different meanings depending upon the
context, the language, and the object of the statute. It may mean vesting of
the assets or it may mean only vesting of the management. The statute must
be construed having regard to its purpose with a view to find in whom the
assets vests. According to him, the autonomy of the two entities under the
scheme envisaged by UTI Act, 2002, has been maintained only for the purpose D
of accounting so that their performance may be objectively judged. While
making payments, the value, assets and the liabilities of the Trust must be
taken into account. Section 7 of the UTI Act, 2002 when it uses the words
"for and on behalf of' import the concept of agency under Section 182 of the
Contract Act. He emphasised the distinction between trustee and agent E
enunciated in WO. Holdsworth & Ors. v. The State of U.P., [1958] SCR 296
and submitted that the words used do not signify vesting of ownership, but
only vesting of management on behalf of the Central Government. The
power to appoint the Administrator and his/its advisors, as also the power to
give directions vests in the Central Government. In any event, a financial
institution could not recover dues under the DRT Act acting as a trustee. Far F
reaching and adverse consequences may follow if banks are allowed to sue
under the DRT Act in such or similar capacity that is agent, trustee etc.

Thirdly, he submitted that there was no plea raised on behalf of
respondeuts 1 and 2 that the funds invested came out of the assets and G
schemes entrusted to them.

Lastly, it was submitted that under Section 19 B of the Unit Trust of
India Act, 1963 special provision for enforcement of claim by the Trust have
been made which were quite effective and sufficient. The stringent provisions
contained therein were sufficient to protect the interest of the Unit Trust of H
940 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A India. On the other hand, Section 19 of the ORT Act provides for another
procedure for recovery of debts due to banks and financial institutions.
Relying upon the judgment of this Court in Chhagan Lal Magan Lal (P) Ltd.
etc. etc. v. Municipal Corporation of Greater Bombay and Ors. etc. etc.,
[1974] 2 sec 402, he submitted that the two procedures laid down mwer two
B different acts for recovery of dues violated Article 14 of the Constitution of
India.

After submissions were made by the respondents herein, Shri Venugopal
did not press th~ last two submissions noted above. The submission based
on Section 5(4) of the UT! Act, 2002 was not pressed since it touched the
C merit of the claim of respondents 1 and 2, which could not be gone into at
this stage. Similarly, the submission based on Section 19 B of the Unit Trust
of India, 1963 and Section 19 of the ORT Act was not pressed in view of the
principles laid down by this Court in its judgment in Gujarat State Financial
Corporation v. Natson Manufacturing Co. Pvt. ltd and Ors., [1979] 1 SCC
193. We shall not therefore, notice the submissions urged by the respondents
D in response to the aforesaid two submissions not pressed by Shri Venugopal.

Shri R.F.Nariman, senior counsel appearing on behalf of the
Administrator, respondent No. I, submitted that Section 7 of the UT! Act,
2002 gives effect only to a part of the scheme which must be understood in
the background of the larger scheme envisaged by the Act read as a whole.
E Under Section 3 of the Act the statutory successor is the Central Government
and the share capital vests in the Central Government. Refund of the share
capital is to be made by the Central Government to the contributors named
therein. It is for this reason that the Central Government steps in. Under
Section 4, the undertaking (excluding the specified undertaking) vests in the
F Specified Company. The specified undertaking vests in the Administrator
under Section 5. This is the scheme of transfer and, therefore, Sections 7 and
18 of the Act must be read harmoniously. He further submitted that even if
it is assumed for the sake of argument that the Administrator acts as an agent
of the Central Government, that is immaterial because the Administrator and
the Specified Company are deemed to be "financial institutions" by reason
G of Section 18 of the Act read with Section 4A of the. Companies Act. In any
event, in this case, the facts are quite clear and respondents I and 2 have sued
for recovery of amounts due to them, and they have not acted as an agent or
as a debenture trustee.

Shri Rakesh Owivedi, senior advocate appearing on behalf of the UTI
H
SOUTHERN PETROCHEM. INDUS. CORPN. LTD."· ADMIN. Of SPECIFIED UNDERTAKING Of UT.I. OF INDIA !SINGH. l.j 941

Trustee Company - respondent No.2 herein drew our attention to Section 3 A
of the Unit Trust of India Act, 2002 and submitted that the aforesaid provision
refers to "the initial capital of the Trust". To understand that term one must
refer to Section 4 of the Unit Trust of India Act, 1963 which provided for the
initial capital of the Trust. Section 4 aforesaid provided that the initial capital
of the Trust shall be five crores of rupees divided in the form of certificates B
each of which shall be of such face value as may be prescribed and contributed
in the manner hereinafter referred. Sub-section (2) refers to the contribution
to be made by the Reserve Bank of India, the Life Insurance Corporation, the
State Bank and the subsidiary banks and other institutions. Section 22 of the
1963 Act provided that the capital of the Trust in relation to the first unit
scheme shall consist of the initial capital, the unit capital of the said scheme, C
any reserves created for that scheme etc. etc. Thus when Section 3(2) of
2002 Act refers to "the initial capital", it refers to the initial capital created
under Section 4 of the Unit Trust of India Act, 1963.

He submitted that under the UTI Act, 2002 the initial capital has to be
refunded by the Central Government. Thereafter Sections 4 and 5 of the UTI D
Act, 2002 Act deal with the Undertaking of the Trust and the Specified
Undertaking of the Trust which vest in the Specified Company and the
Administrator respectively. The Undertaking as well as the Specified
Undertaking represent the assets, schemes etc. which were created under
various Schemes under the Unit Trust of India Act, 1963. Each of the E
Schedules represent the business and liabilities etc. Under Section 3 the
initial capital is refunded in the manner prescribed and the other assets are
divided in the manner provided. Under the proviso to Section 4 if any
business, asset or property is not represented or related to the Undertaking or
Specified Undertaking, it shall vest in the Ce:ntral Government. Thus under
Section 3 the initial capital is refunded. Under Sections 4 and 5 the business, F
assets and properties are divided and while the Specified Undertaking of the
Trust vests in the Administrator, the Undertaking vests in the Specified
Company. Whatever remains vests in the Central Government. This represents
a complete scheme under which the entire assets and liabilities are distributed
and stand refunded or vested as the case may be, in accordance with the G
provisions of Sections 3, 4 and 5.

He submitted that Section 7 no doubt refers to the appointment of
Administrator of the Specified Undertaking for the purpose of taking over the
administration thereof and to carry on the management for and on· behalf of
the Central Government. The Central Government has been given powers to H
942 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A issue directions. He submitted that such control is exercised over every
Government Corporation. The provisions of the Act vest the power to
administer in the Administrator, reserving to the Central Government the right
to regulate the exercise of its powers and functions. This does not prevent
the Administrator from acting on his own. As an Administrator he has power
to recover dues owing to the Specified Undertaking. The very wide powers
B vested in the Administrator have been enumerated in Section 10 of the Act.
He also submitted that in the instant case the Administrator had acted to
recover the amount due to the Specified Undertaking and similarly the Specified
Company had taken action to recover dues owing to it. In the instant case
there is no dispute that the amounts sought to be recovered were paid by
C the Unit Trust of India and those amounts are now sought to be recovered
by respondents I and 2 in whom the rights vest to recover the amounts due.

The Learned Additional Solicitor General appearing on behalf of the
Union of India drew our attention to the definition of "public financial
D institution" under Section 2(fa) of the Unit Trust of India Act, 1963 and
submitted that it includes every financial institution other than the Trust
specified by or under Section 4-A of Companies Act, 1956. Section 2(e) of
the UTT Act, 2002 defines the "financial institution" as having the same
meaning assigned to it in clause (h) of Section 2 of the DRT Act, 1993.
E Section 2(h) of the DRT Act, 1993 defines the "financial institution" to mean
a public financial institution within the meaning of Section 4-A of the Companies
Act, 1956 and such other institution as the Central Government may by
Notification specify. He, therefore, submitted that High Court was right in
holding that Section 18 effected an amendment in Section 4-A of the Companies
Act with the result that instead of "Unit Trust of India" the "Specified
F Company" and the "Administrator" stood substituted. They being financial
institutions have every right to invoke the provisions of the DRT Act.

Before considering the submissions advanced on behalf of the parties,
it may be useful to notice some of the provisions of the UTI Act, 2002. The
definitions of "financial institution", "Specified Company", the "Specified
G Undertaking" and "Undertaking" are relevant and they define as follows :-

"(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;

H
SOUIBERN PETROCHEM. INDUS. CORPN. Lro. "· ADMIN. OF SPECIFIED UNDERTAKING or U.T.I. OF INDIA (SINGH. J.f 943

(h) "specified company" means a company to be formed and regis~ered A
under the Companies Act, 1956 {I 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 B
properties of the Trust representing and relatable to the schemes and
Development Reserve Fund specified in the Schedule I;

(I) "undertaking" includes all business, assets, liabilities and properties
of the Trust representing and relatable to the schemes and plans
specified in the Schedule II;" C
Sections 3 and 4 provide as follows -

"3. Transfer of initial capital.-

(I) On the appointed day, the initial capital of the Trust, contributed D
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 oflndia Act, 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
E
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
F
undertaking of Trust to vest in Administrator.-

(l) On such date as the Central Government may, by notification in
the Official Gazette, appoint, there shall be transferred to, and vest
in,-
G
(a) the specified company, the undertaking (excluding t!le specified
undertaking) of the Trust for such consideration and on such
terms and conditions a;; may be mutually agreed upon between
the Central Government and the subscribers to the capital of the
specified company; H
944 SUPREME COURT REPORTS (2006] SUPP. 10 S.C.R.

A (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
B
or related to the undertaking or specified undertaking, shall vest in the
Central Government."

Sub-section (l) of Section 5 must also be noticed which provides:-

"5. General effect of vesting of undertaking or specified undertaking
c in specified company or Administrator.-

( l) 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 which vest in, the Administrator,
as the case may be, under section 4, shali be deemed to include all
D 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
E 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
F 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
G without India then subsisting of the Trust in relation to such
undertaking or the specified undertaking, as the case may be."

Sub-sections (l) to (3) of Section 7 read as under :-

"7. Appointment ofAdministrator to manage specified undertaking.-

H
SOUTHERN PETROCHEM. INDUS. CORPN. LTD. ''· ADMIN. OF SPECIFIED UNDERTAKING OF U.T.1. OF INDIA (SINGH. J.( 94 5

(I) The Central Government shall, on and from the appointed day, A
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
B
(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 C
Government at any time for instructions as to the manner in which he
shall conduct the management of the specified undertaking 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
thereunder and the control of the Central Government, the D
Administrator shall be entitled, notwithstanding anything contained
in any other law for the time being in force, to exercise, in relation
to the management of the specified undertaking, the powers specified
under section I 0 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." E
Section 18 which is of considerable significance in this appeal is
reproduced below :-

"18. Substitution in Acts; rule or regulation or notification by specified
company or Administrator in place of Trust. - F
In every Act, rule, regulation or notification in force on the appointed
day, for the words "Unit Trust of India", wherever they occur, the
words, brackets and figures "specified company referred to in the
Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002"
or "Administrator of the specified undertaking of the Unit Trust of G
India referred to in the Unit Trust of India (Transfer of Undertaking
and Repeal) Act, 2002", as the case may be, shall be substituted"

It is also necessary to notice the relevant provisions of the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993. Section 2 (g)
H
,·
946 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A defines "debt" as follows :-"
"[(g) "debt" means any liability (inclusive of interest) which is claimed
as due from any person by a bank or a financial institution or by a
consortium of banks or financial institutions during the course of any
business activity undertaken by the bank or the financial institution
B or the consortium under any law for the time being in force, in cash
or otherwise, whether secured or unsecured, or assigned, or whether
payable under a decree or order of any civil court or any arbitration
award or otherwise or under a mortgage and subsisting on, and legally
)
recoverable on, the date of the application;]"

C A "financial institution" under the said Act is defined by Section 2(h)
in the following words :-

(i) a public financial institution within the meaning of section 4A of
the Companies Act, 1956 (l of 1956);
D (ii)· Such other institution as the Central Government may, having
regard to its business activity and the area of its operation in
India by notification, specify ;

Section 17 deals with the jurisdiction, powers and authority of the
Tribunals constituted under the Act. It reads as under :-
E "17. Jurisdiction, powers and authority ofTribunals.-(l) A Tribunal
shall exeroise, on and from the.appointed day, the jurisdiction, powers
and authority to entertain and decide applications from the banks and
Financial institutions for recovery of debts due to such banks and
financial institutions.
F
(2) An Appellate Tribunal shall exercise, on and from the appointed
day, the jurisdiction, powers and autho1 ity to entertain appeals against
any order made, or deemed to have been made, by a Tribunal under
this Act."

G Sub-sections (l) and (2) of Section 19 are also relevant. They read as
under :-
-·
"19. Application to the Tribunal.-(l) Where a bank is a financial
institution has to recover any debt from any person, it may make an
application to the Tribunal within the local limits of whose jurisdiction-
H
SOU1l!ERN PETROCHEM. INDUS. CORPN. LTD. v. ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INDIA !SINGH. I.I 94 7

(a) the defendant, or each of the defendants where there are more A
than one, at the time of making the application, actually and
voluntarily resides or carries on business or personally works for
gain, or
(b) any of the defendants, where there are more than one, at the time
of making the application, actually and voluntarily resides or B
carries on business or personally works for gain, or
(c) the cause of action, wholly or in part, arise.

(2) Where a bank or a financial institution, which has to recover the
debt from any person, has filed an application to the Tribunal
under sub-section ( l) and against the same person another bank C
or financial institution also has claim to recover its debt, then,
the later bank or financial institution may join the applicant bank,
or financial institution at any stage of the proceedings, before the
final order is passed, by making an application to that Tribunal."

Section 34 gives to the Act over-riding effect by providing as follows:- D
"34. Act to have over-riding effect.-(1) Save as otherwise provided
in sub-section (2), the provisions of this Act shall have effect
notwithstanding anything inconsistent (herewith contained in any other
law for the time being in force or in any instrument having effect by E
virtue of any law other than this Act."

(2) The provisions of (his Act or the rules made thereunder shall be
in addition to, and not in derogation of, the Industrial Finance
Corporation Act, 1948 (15of1948), the Stale Financial Corporations·
Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of F

,
1963 ), the Industrial Reconstruction Bank of India Act, 1984 (62 of
1984), "the Sick Industrial Companies (Special Provisions) Act, 1985
( l of 1986) and the Small Industries Development Bank of India Act,
1989 (39of1989)."

Before the High Court the main submission urged on behalf of the G
appellant was that respondents l and 2 herein are not 'financial institutions'
within the meaning of DRT Act, 1993. The respondents, however, relied on
Section 11 of the UTI Act, 2002 and Section 2(h)(ii)(ii) of the DRT Act to
contend that the aforesaid respondents are 'financial institutions' within the
meaning of the term in the DRT Act. The High Court upheld the contention
H
948 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A of the respondents. Section 18 of the UT! Act, 2002 in terms provide that
for the words "Unit Trust of India", wherever they occur in any Act, rule,
regulation, or notification, the words" Specified Company" and "Administrator
of the Specified Undertaking of the Unit Trust of India" shall be substituted.
The effect of this provision is that in every Act, rule, regulation or notification
B the words "Unit Trust of India" are substituted by the "Specified Company"
and the "Administrator of the Specified Undertaking" referred to in the UT!
Act, 2002. It is, therefore, not necessary to pass a separate amending Act
or to amend all the rules, regulations or notifications by adopting an amending
procedure. Section 18 of the UT! Act, 2002 operates by its own force to
bring about the substitution. Legislative policy adopted ~y the Parliament to
C enact a legislation which effects an amendment in other Acts, rules, regulations,
notifications etc. is permissible subject to its legislative competence. If the
enactment brings about such amendments as is within the legislative
competence of the Parliament and the statutes, notifications, etc. in which
such amendment is affected are also within the legislative co~petence of the
Parliament, the method adopted by the Parliament cannot be assailed. Rather
D than enacting several statutes and numerous amendments of rules, regulations,
notifications etc., the Parliament achieved this purpose by a single enactment.

Section 4-A of the Companies Act provides that each of the financial
institutions specified in sub-section (I) shall be regarded for the purpose of
E this Act, as a public financial institution. The financial institutions specified
included the "Unit Trust of India" established under Section 3 of the UT! Act,
1973. By operation of Section 18 of the UT! Act, 2002, "Unit Trust of India"
is substituted by the "Specified Company" or "Administrator of the Specified
Undertaking'', as the case may be. Thus, the "Specified Company" and the
"Administrator of the Specified Undertaking" must be deemed to be financial
F institutions specified in sub-section (1) of Section 4-A of the Companies Act.

This takes us to the definition of 'financial institution' under the DRT
Act, Section 2(h) whereof defines a "financial institution" to mean a public
financial institution within the meaning of Section 4-A of the Companies
Act. Consequently by reason of deemed amendment of Section 4-A of the
r
G Companies Act, the "Specified Company" and the "Administrator of the
Specified Undertaking" come within the definition of financial institutions as
defined under Section 2(h) of the DRT Act.

Mr. Venugopal submitted that under Section 18 of the UTI Act, 2002 the
H substitution is of "Specified Company" or "Administrator of the Specified
- SOUTHERN PETROCHEM. INDUS. CORPN. LTD. v. ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INOIA iSINGH. J.J 949

Undertaking", "as the case may be". According to him this brings about an A
uncertainty and in each case it has to be discovered as to whether one or
the other is substituted. According to him Section 18 which in a sense is a
definition clause should not permit such uncertainty. We find no merit in this
submission. By reason of Section 18 of the UTI Act, 2002, in place of Unit
Trust of India, both respondents 1 and 2 stand substituted. Both are entitled B
to sue as financial institutions and the question whether they have an
enforceable claim must be decided in the facts and circumstances of each
case. There is no uncertainty because the assets possessed by these two
identities are clearly enumerated in Schedules I and II of the UTI Act, 2002.
We, therefore, do not find that the use of the words "as the case may be"
introduces aily element of uncertainty. C
The next question is whether respondents 1 and 2 are seeking to recover
the debts owing to them or whether they are acting as agent on behalf of their
principals, or as trustees.

The Scheme of the Act discloses that the Unit Trust of India created D
under the Unit Trust of India Act, 1963 ceased to exist and in its place the
Specified Company and the Administrator of the specified undertaking of the
Trust were created which took charge of all the properties, business assets,
rights etc. of the erstwhile Unit Trust of India. The initial capital of the Trust
stood transferred to and vested in the Central Government under Section 3(1) E
of the Act. Sub-section (2) however, mandated that the initial capital
contributed by the named contributors shall be refunded by the Central
Government to such extent as may be determined by it. Section 21 provides
for the repeal of the Unit Trust of India Act, 1963 and the dissolution of its
Board of Trustees.
F
Having done so UTI Act of 2002 by Section 4 thereof vested in the
specified company the undertaking of the Trust (excluding the specified
undertaking) 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 and the specified company. The decision of the Central G
Government as to whether any business, assets, liabilities or properties
represent or relate to the undertaking or specified undertaking is made final.
If there remained any business, asset or property which was not represented
or related to the undertaking or specified undertaking, that vested in the
Central Government. In this manner, the erstwhile Unit Trust of India ceased H
to exist and in its place a specified company and an Administrator of the
950 SUPREME COURT REPORTS [2006] SUPP. 10.S.C.R.

A specified undertaking of the Trust came into existence. The transfer and
vesting of assets, rights etc. in these two bodies is in the widest possible
terms as would be obvious from a plain reading of Section 5 of the UTI Act,
2002. It provides that what is transferred and vested in the specified company
or the Administrator of the specified undertaking, shall be deemed to include:-

B "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
c 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
D ownership, possession or power of the Trust in relation to the
undertaking or the specified undertaking, as the case may be".

Thus the transfer and vesting is complete. All contracts, deeds bonds,
guarantees, other instruments and working arrangements subsisting
E immediately before the appointed day cease to be enforceable against the
erstwhile Trust but 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, 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
F party thereto. Similarly, all unit schemes taken by the Board of the erstwhile
_ Trust are deemed to have been taken by the Specified Company or the
Administrator as the case may be.

Having vested the undertaking of the Trust in the Administrator, Section
G 7 of the Act provides for the appointment of the Administrator of the specified
undertaking who is entrusted with the task of taking over the administration
thereof and to carry on the management of the specified undertaking of the
Trust for and on behalf of the Central Government. sub-section (2) of Section
7 empowers the Central Government to issue such directions to the
Administrator as to his powers and functions as the Government may deem
H desirable. The Administrator may also seek directions from the Central
SOUTHERN PETROCHEM. INDUS. CORPN. LTD. v. ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INDIA !SINGH. J.t 951

Government as to the manner in wh1ich he shall conduct the management of A
the specified undertaking or in relation to any matter arising in the course of
such management.

Much was sought to be made of the use of the words "carry on the
management of the specified undertaking of the Trust for and on behalf of
the Central Government" in Section 7 of the UTI Act, 2002. It was also B
emphasized that under sub-section (2) of Section 7 the Central Government
has been authorized to issue directions to the Administrator as to his powers
and functions and similarly permitted the Administrator to seek directions of
the Central Government as to the manner in which he shall conduct the
management of the specified undertaking or in relation to any matter arising C
in the course of such management. The power to issue directions of this
nature are to be found in several other statutes which create a Government
cooperation or other legal entity. The power to issue directions vested in the
Central Government is with a view to provide policy guidance to the
Administrator. The fact that the management is carried on by the Administrator
of the specified undertaking on behalf of the Central Government which is D
authorized to issue directions to the Administrator does not detract from the
fact that the "specified undertaking" vests in the Administrator. The wide
sweep of the language employed in Section 5 of the Act leaves no manner
of doubt that the vesting in the Administrator or in the Specified Company
is complete. The powers vested in the Administrator under Section IO of the E
Act cover almost every power of management and administration. Section l 0
(l) (b) in particular authorizes him on the advice of the Board of Advisors to
invest, acquire, hold or dispose of securities and to exercise and enforce all
powers and rights incidental thereto including protection or realization of
such investment etc. Thus, it is a part of the power of management vested
in the Administrator to invest as well as to realize such ·investments. F
Apparently therefore, if any amount is owing to the specified undertaking,
the Administrator has the authority to take all necessary steps to realize any
amount due to the specified undertaking. The statute vests this power in the
Administrator. It cannot therefore by any stretch of imagination be assumed
that the Administrator does not possess the power to make recoveries in G
course of management of the specified undertaking. The mere fact that the
Central Government may give him directions or he may seek instructions from
the Central Government of the nature contemplated by sub-section (2) of
Section 7, does not mean that the power exercised by the Administrator are
not the powers vested in him by law. Subject to such directions as may be
given under the aforesaid sub-section, it is the Administrator who must H
952 SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.

A exercise his power of management and administration. Apparently therefore
in recovering dues owing to the specified undertaking, the Administrator
exercises the powers vested in him under the Act in his own right since the
undertaking vests in him, and the Act vests in him wide powers of management
and administration which include the power to recover dues owing to the
B specified undertaking. It is, therefore, futile to contend that the Administrator
acts as an agent of the Central Government. He acts in exercise of the powers
vested in him by the statute and in the manner prescribed by the statute.

Even assuming that the Administrator manages the specified undertaking
on behalf of the Central Government, that will not make any difference. The
C amounts sought to be recovered are allegedly owing to the Specified Company
and the Administrator, who as we have found are "financial institutions"
within the meaning of that term in the ORT Act, 1993. Thus, the Specified
Company and the Administrator of the Specified Company are not seeking
to recover any dues owing to the Central Government, and therefore, they
cannot be held to be acting on behalf of the Central Government. In their
D own right they are seeking to recover the amounts due to them in exercise
of status and power conferred upon them by statute. So viewed, the nature
of control of the Central Government over them is wholly irrelevant in
considering the question of jurisdiction of the Debts Recovery Tribunal to
entertain such a claim.

E Similarly, the vesting of the undertaking (excluding the specified
undertaking) in the Specified Company is also complete in terms of Section
5 of the Act. Being a company, it is a distinct legal entity and, therefore,
must exercise its authority in accordance with law. Advisedly, the legislature
did not vest the specified undertaking in a company as it has done in the case
F of undertaking other than specified undertaking, because in so far as the
specified undertaking of the Trust is concerned, the Act contemplates the
redemption of all the schemes and the payment of entire amount to investors.
After this is achieved, the Administrator in terms of Section 8 of the Act shall
vacate his office and forthwith deliver to the Central Government, or any
institution or officer specified by it, possession of all assets and properties
G representing and relatable to the specified undertaking which are in his
possession, custody and control. The Administrator of specified undertaking
is, therefore, constituted as a statutory authority under the Act with wide
powers and functions vests in him in relation to the specified undertaking
which also stand vested in him. When he seeks to recover dues owing to
H the specified undertaking he exercises his own authority as Administrator and
... SOUTHERN PETROCHEM. INDUS. CORPN. LTD."· ADMIN. OF SPECIFIED UNDERTAKING OF U.T.I. OF INDIA !SINGH. J.J 953

assumes powers which vests in him by law. There is nothing in the Act A
which may justify the submission that the specified company acts as a
trustee. It manages and executes the schemes contained in Schedule I of the
Act in accordance with the provisions of the Act.

Learned counsel for the appellant submitted that under the Banking
Regulation Act, 1949 Section 6 authorises a banking company to engage in B
business even as an executor. According to him, an executor cannot recover
dues under the provisions of the ORT Act. He placed reliance on the
judgment of the Supreme Court in State Bank of India v. Special Secretary
Land & Land Revenue & Reforms & Land & Land Utilisation Deptt. of W B.
and Ors., [l 995) Supp 4 SCC 30 particularly paragraph 5 thereof. This Court C
considered its earlier decision in Holdsworth (Supra). The question which
arose for consideration of this Court was whether Section 19 of the Urban
Land (Ceiling and Regulation) Act, 1976 was attracted to vacant land of a
Trust created by a private individual, if a Bank accepted administration of
such Trust and became a trustee in the course of carrying on its permitted
commercial activity. The decision in that case turned on the mea:iing of the D
words "to hold" under Section 2(1) of the Act and interpreting the said term,
this Court held that the vacant land owned or possessed as owner or in certain
other capacities by Central Government or others as specified in sub-section
(l) of the Section were exempted from the applicability of the provisions in
Chapter III of the Act. Clause (iii) of sub-section (l) mentioned banks falling E
within the meaning of the explanation given thereto as those which fell in
exempted categories. The decision therefore, rested on the meaning given to
the tenn "to hold" in Section 19 of the Act.

Having examined the provisions of the UTI Act, 2002 we have no
doubt that vesting in the Administrator or the Specified Company is complete. F
The concept of mere vesting of management cannot be imported into the
scheme of the Act. The Administrator and the Specified Company were
therefore, fully authorized in law to recover the dues from the appellants as
"financial institutions". The Debts Recovery Tribunal had therefore undoubted
jurisdiction to entertain their claims.
G
On the basis of the materials placed before us there is nothing to
suggest that they were acting either as agents of the Central Government or
as trustees. We therefore, hold that they have acted in the exercise of power
vested in them by the UTI Act, 2002 and in their own right.

H
954 SUPREME COURT REPORTS (2006] SUPP. 10 S.C.R.

A The High Court was, therefore, right in dismissing the writ petition
preferred by the appellants challenging the jurisdiction of the Debts Recovery
Tribunal. We find no merit in this appeal and the same is, therefore, dismissed
but without any order as to costs.

v.s.s. Appeal dismissed.
B