Statutory vesting and deeming substitution can make successor entities financial institutions with independent debt recovery rights.

A statutory transfer-and-repeal scheme can place successor entities in the shoes of the former institution for recovery purposes. The Court notes that, under the 2002 transfer statute and the Companies Act, the Administrator of the Specified Undertaking of UTI and the UTI Trustee Company were treated as financial institutions under the 1993 recovery law. It also records that the vesting provisions preserved their right to recover debts due to the vested undertakings, so they were not restricted to acting merely as agents or trustees. On that footing, the Debts Recovery Tribunal could entertain the claim.

---

---

Issues: (i) Whether the Administrator of the Specified Undertaking of Unit Trust of India and the UTI Trustee Company were financial institutions within the meaning of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by virtue of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and the Companies Act, 1956. (ii) Whether the claim filed before the Debts Recovery Tribunal was maintainable on the footing that the respondents were suing in their own right for debts due to them and not merely as agents or trustees.

Issue (i): Whether the Administrator of the Specified Undertaking of Unit Trust of India and the UTI Trustee Company were financial institutions within the meaning of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by virtue of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and the Companies Act, 1956.

Analysis: Section 18 of the 2002 Act provided for substitution of the specified company or the Administrator in place of the Unit Trust of India in every existing Act, rule, regulation or notification. By that deeming substitution, the respondents stood in the place of the erstwhile Unit Trust of India for the statutory purposes relevant to the case. Section 4A of the Companies Act, 1956 treated the notified financial institutions as public financial institutions, and the substituted entities therefore came within the definition of financial institution under section 2(h) of the 1993 Act. The use of the words "as the case may be" did not create uncertainty, because both entities were identifiable under the statutory scheme and each could sue in respect of the assets vested in it.

Conclusion: The respondents were financial institutions within the meaning of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Issue (ii): Whether the claim filed before the Debts Recovery Tribunal was maintainable on the footing that the respondents were suing in their own right for debts due to them and not merely as agents or trustees.

Analysis: The 2002 Act effected a complete statutory vesting of the undertaking and specified undertaking in the respective entities, together with the attendant rights, powers, assets and liabilities. Section 7 entrusted the Administrator with management of the specified undertaking for and on behalf of the Central Government, but that control did not reduce the Administrator's powers to a mere agency. The statutory scheme also empowered recovery of amounts due to the vested undertaking. The respondents were seeking recovery of debts due to the vested undertakings themselves, not dues payable to the Central Government. On that footing, the objection that they were only agents or trustees could not defeat jurisdiction under the 1993 Act.

Conclusion: The claim before the Debts Recovery Tribunal was maintainable and the respondents were entitled to sue in their own right.

Final Conclusion: The statutory scheme under the 2002 Act validly brought the respondents within the expression "financial institution" and preserved their authority to recover debts in their own right, so the Debts Recovery Tribunal had jurisdiction to entertain the application.

Ratio Decidendi: Where a special repeal-and-transfer statute effects complete vesting of an undertaking in specified statutory entities and substitutes them by deeming fiction in place of the former institution, those entities may be treated as financial institutions for the purposes of a recovery statute and may sue for debts due to the vested undertaking in their own right, notwithstanding governmental control over management.

---