Statutory substitution can confer public financial institution status on successor entities and support recovery proceedings.

A statutory repeal-and-substitution clause can operate as an automatic amendment of existing enactments, rules, regulations and notifications, replacing the dissolved statutory body with its successor entities wherever its name appears. On that construction, the successor entities of the erstwhile Unit Trust of India were treated as public financial institutions under the Companies Act framework, which in turn brought them within the definition of financial institutions entitled to invoke recovery proceedings under the Debts Recovery regime. The original application before the Debt Recovery Tribunal was therefore maintainable.

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Issues: Whether the respondents, as successor entities of the erstwhile Unit Trust of India, became a public financial institution by virtue of Section 18 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and could maintain an application before the Debt Recovery Tribunal under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis: Section 18 was construed as a sweeping statutory substitution provision, under which the words "Unit Trust of India" in every Act, rule, regulation and notification stood replaced by the newly constituted entities without the need for separate amendments to each enactment. On that construction, Section 4A of the Companies Act, 1956 stood amended so that the respondents fell within the category of public financial institution. Once that status was attracted, Section 2(h)(i) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 applied automatically, and the respondents were entitled to invoke Section 19 for recovery of dues due to the erstwhile UTI.

Conclusion: The respondents were held to be public financial institutions for the purposes of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and their original application before the Debt Recovery Tribunal was maintainable.

Ratio Decidendi: A statutory repeal-and-substitution clause can operate as an automatic amendment of all existing enactments, rules, regulations and notifications so that the successor entities replace the dissolved statutory body wherever its name occurs, thereby conferring the corresponding statutory status and remedies without requiring separate amendments or notifications.

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