Section 5 of UTI Act : Section 5: General Effect Of Vesting Of Undertaking Or Specified Undertaking In Specified Company Or Administrator

Explanation using Example

Imagine that Priya had invested in a Unit Scheme offered by the Unit Trust of India (UTI) before the enactment of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. After the Act came into force, the management and obligations of UTI's schemes were transferred to a specified company or an Administrator, as per Section 4 of the Act. Now, according to Section 5:

• All the assets and liabilities of UTI's schemes, including Priya's investment, are now deemed to be held by the new specified company or Administrator.
• Any contracts or agreements that were in place concerning Priya's investment with UTI would continue to be in effect, but now with the specified company or Administrator instead of UTI.
• Priya's units in the Unit Scheme are now considered to be issued by the specified company or Administrator, and any benefits or obligations related to those units, such as income distribution or redemption, will be handled by them just as UTI would have done.
• If there were any legal proceedings involving UTI that related to Priya's investment, these would now be transferred to and continued against or in favor of the specified company or Administrator.

In essence, for Priya, the transfer of UTI's undertaking to the specified company or Administrator means that while the management of her investment has changed hands, her rights and the company's obligations to her remain the same as before the Act's enforcement.