Growing Income Unit Scheme (Cumulative and Non-cumulative), 1990 - 0401/DPD/89/VOL-X - Income Tax

Growing Income Unit Scheme (Cumulative and Non-cumulative), 1990 Notification Number: 0401/DPD/89/VOL-X Dated 11-05-1989 Notification No. UT/401/DPD (P R) 89/Vol. X/89-90, dated 11th May, 1989. The provisions of the Growing Income Unit Scheme (Cumulative and Non-Cumulative), 1990, formulated under section 21 of the Unit Trust of India Act, 1963, and approved by the Executive Committee in the meeting held in November, 1989, are published herebelow for general information:-- The Growing Income Unit Scheme,1990 (Cumulative and Non-Cumulative) In exercise of the powers conferred by section 21 of the Unit Trust of India Act, 1963 (52 of 1963), the Board of the Unit Trust of India hereby makes the following Unit Scheme:-- I. Short title and commencement.--(1) This Scheme shall be called the Growing Income Unit Scheme (Cumulative and Non-Cumulative), 1990, and shall be for a period of five years and six months, i.e., 66 months. (2) It shall come into force on the 1st day of January, 1990. II. Definitions.--In this Scheme, unless the context otherwise requires:-- (a) the "Act" means the Unit Trust of India Act, 1963; (b) "acceptance date" means the date on which the letter of conversion which is sent by the unitholder is accepted by the Trust, which shall not be later than 31st January 1990; (c) "number of units to be in issue" means the aggregate of the number of units sold and outstanding; (d) "recognised stock exchange" means a stock exchange which is for the time being recognised under the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (e) "Regulations" means Unit Trust of India General Regulations, 1964, made under section 43(1) of the Act; (f) "unit" means one undivided share of the face value of rupees ten in the unit capital; (g) all other expressions not defined herein but defined in the Act shall have the respective meanings assigned to them by the Act. III. Face value of each unit.--The face value of each unit shall be "Ten" rupees. IV. Application for units.--(1) An applicant under the Scheme shall be a unitholder under Income Unit Scheme 1985 who has exercised the option to hold such number of units under this Scheme as may be converted. (2) Applications shall be made in such form as may be approved by the Chairman of the Trust. (3) A unit certificate will be sent by registered post with or without acknowledgment due to the address given by the applicant; and the Trust will not incur any liability for loss, damage, misdelivery or non-delivery of the unit certificate, so sent. V. Conversion.--This conversion of units from Income Unit Scheme, 1985, to this Scheme by the Trust shall be deemed to have been concluded on the acceptance date. On such conclusion, the Trust shall, as soon thereafter as possible, send the applicant an acknowledgement thereof. As soon as possible thereafter, the Trust shall issue to the applicant one unit such number of certificate for such denomination in multiples of 10 as he may specify. Upon exercise of the option by a unitholder the Trust shall repurchase the units held by the unitholder under that Scheme at the repurchase price ruling on termination and with immediate effect the unitholder or class of unitholders who have exercised the option shall be deemed to be unitholders under Growing Income Unit Scheme, 1990. The excess amount if any which constitutes the premium the units carry as on termination after repurchase shall be reinvested/refunded to the unitholder/s. The Trust shall issue to such unitholder/s a fresh certificate in lieu of the certificate already held by him and no claim to units under the old certificate will be entertained by the Trust under any circumstance. Upon exercise of the option the old certificates with the unitholder shall be deemed repurchased and cancelled and shall not be alive on the register of unitholders. A unitholder under the Income Unit Scheme, 1985, who has not exercised the option to convert or who has not repurchased the units as on termination will not be entitled to any other benefit. VI. Repurchase of units.--(1) The Trust shall not repurchase units before 1st January, 1993. (2) The Trust shall, during the currency of the Scheme, on and after 1st January, 1993, repurchase at the repurchase price *then prevailing on receipt by it of the unit certificate/s with the form on the reverse thereof duly filled in provided all the units comprised in the certificate/s are tendered for repurchase. No partial repurchase of units represented by the unit certificate/s shall be permitted. (3) Payment for units repurchased by the Trust after deductions, if any, shall be made as early as possible after the acceptance date in such manner as the applicant may indicate in the application. No interest shall, on any account, be payable on the amount due to the applicant and the cost of remittance (including postage) or of realisation of cheque or draft sent by the Trust shall be borne by the applicant. VII. Restrictions on sale and repurchase of units.--Notwithstanding anything contained in any provision of the Scheme, the Trust shall not be under an obligation to repurchase units. (i) on such days as are not working days; and (ii) during the period when the register of unitholders is closed in connection with (as notified by the Trust) the annual closing of the books and accounts. Explanation.--For the purposes of this Scheme, the term "working day" shall mean a day which has not been either (i) notified under the Negotiable Instruments Act, 1881, to be a public holiday in the State of Maharashtra or such other States where the Trust has its offices; of (ii) notified by the Trust in the Gazette of India as a day on which the office of the Trust will be closed. VIII. Conversion or repurchase to be as on the acceptance date.--The conversion or repurchase of units by the Trust shall be as on the acceptance date at the respective prices prevailing on that date. IX. Sale and repurchase prices.--(1) The units shall be converted at Rs. 10 to all unitholders exercising the option to join the Scheme. (2) The price at which a unit will be repurchased by the Trust (hereinafter referred to as "the repurchase price") shall be determined by the Trust on the 15th December, 1992, and, thereafter, on the 15th of every month or the next working day, if that day happens to be a holiday and shall apply to repurchases in the succeeding month. (3) The repurchase price shall be arrived at by dividing the value (determined as hereinafter indicated) as at the close of business on the working day on which the repurchase price is determined, of the assets pertaining to this Scheme, reduced by liabilities pertaining to this Scheme (not being contingent liabilities or liabilities in respect of the unit capital including reserves, if any) as at the close of business on the said working day, by the number of units in issue as at the close of business on the said day, deducting therefrom such sum as in the opinion of the Trust is adequate to cover brokerage, commission, taxes, if any, stamp duties and other charges in relation to the realisation of investments by the Trust and adjusting downwards the resulting price by not more than ten paise per unit. (4) The repurchase price of unit shall be arrived at on the basis of the material available with the Trust on the day on which the repurchase price is arrived at. (5) Notwithstanding anything contained to the contrary in sub-clauses (2), (3) and (4), when the Trust is satisfied that in the interest of the Trust, the unitholders and of the continuance and growth of the Scheme, it is necessary or expedient to do so, the Trust may determine the repurchase price at a rate which may not necessarily be in accordance with the provisions of sub-clause (3) and any such determination shall be deemed to be in the interest of the Trust and the unitholders. (6) Notwithstanding anything contained to the contrary in sub-clause (2), the Trust may determine the repurchase price on any date other than the 15th day of a month and may deem any price fixed by it effective for such period as it may deem fit. (7) In the event of termination of the Scheme in the manner as specified in clause XXVI hereof, the Trust shall determine the repurchase price by valuing the assets pertaining to the Scheme as at the close of business on the date notified for termination reduced by the liabilities pertaining to the Scheme and dividing them by the number of units outstanding and deducting therefrom such sum as in the opinion of the Trust is adequate to cover brokerage, commission, taxes, if any, stamp duties and other charges in relation to realisation of investments by the Trust and other adjustments and the expenditure in connection with the closure and payment of the distribution to the unitholders of the assets in respect of the Scheme. In such an event the repurchase price shall, in addition to the par value, bear the other distributable component of the asset per unit arrived at by the Trust in a manner satisfactory to its auditors and as the Board may approve. X. Publication of repurchase price/final repurchase price.--(a) The Trust shall, as early as possible after the determination of the repurchase price, publish in such manner as it may deem fit, the repurchase price of units. (b) Upon termination of the Scheme in the manner provided in clause XXVI hereof, the Trust shall, as early as possible after determining the final repurchase price, publish it in such manner as it may deem fit. (c) The final repurchase price at which the units will be repurchased will be at least at a premium of paise 20 per unit of the face value of Rs. 10. This price will apply to units and sold both under the cumulative and non-cumulative scheme. XI. Valuation of assets pertaining to this Scheme.--(1) For the purposes of valuation of the assets under sub-clause (2) of clause IX, the assets shall be classified into: (a) cash, (b) investment and (c) other assets. (2) Investments shall be valued by taking:-- A. (a) the closing prices on the stock exchange as on the working day on which the valuation is made of the securities held by the Trust pertaining to this Scheme: Provided that where a security is quoted on more than one stock exchange, the manner of determining the price of such security shall be decided by the Trust; (b) where any investment was not, during the relevant period, dealt in, or quoted on any recognised stock exchange, such value, as the Trust may, in the circumstances consider to be the fair value of such investment; and B. Adding thereto:-- (a) in the case of interest-earning deposit, interest accrued but not received; (b) in the case of Government securities and debentures, interest accrued but not received; and (c) in the case of preference shares and equity shares quoted ex-dividend, any dividend declared but not received. (3) Other assets shall be valued at their book value. XII. Form of unit certificate.--Unit certificate shall be in Form A annexed hereto. Each unit certificate shall bear a distinctive number, the number of units represented by the certificate and the name of the unitholder. XIII. Manner of preparation of units certificate.--The unit certificates may be engraved or lithographed or printed as the Board of Trustees may, from time to time, determine and shall be signed on behalf of the Trust by two persons duly authorised by the Trust. Every such signature may either be autographic or may be effected by a mechanical method. No unit certificate shall be valid unless and unit it is so signed. Unit certificate so signed shall be valid and binding notwithstanding that, before the issue thereof, any person whose signature appears thereon, may have ceased to be a person authorised to sign unit certificates on behalf of the Trust; Provided that should the unit certificate so prepared contain the signature of an authorised person who however is dead at the time of issue of the certificate, the Trust may, by a method considered by it as most suitable, cancel the signature of such a person appearing on the certificate and have the signature of any other authorised person affixed to it. The unit certificate so issued shall also be valid. XIV. Trusts not to be recognised regarding unit certificates.--The person who is registered as the holder and in whose name a unit certificate has been issued shall be the only person to be recognised by the Trust as the unitholder and as having any right, title or interest in or to such unit certificate and the units which it represents; and the Trust may recognise such unitholder as absolute owner thereof and shall not be bound by any notice to the contrary or to take any notice of the execution of any trust or, save as herein expressly provided or as by some court of competent jurisdiction ordered, to recognise any trust or equity or other interest affecting the title to any unit certificate or the units thereby represented. XV. Exchange of unit certificate and procedure when certificate is mutilated, defaced, lost, etc.,--(1) In case any unit certificate shall be mutilated or worn out or defaced, the Trust in its discretion, may issue to the person entitled a new unit certificate representing the same aggregate number of units as the mutilated or worn out or defaced unit certificate. In case any unit certificate should be lost, stolen or destroyed, the Trust may, in its discretion, issue to the person entitled a new unit certificate in lieu thereof. No such new unit certificate shall be issued unless the applicant shall previously have: (i) furnished to the Trust evidence satisfactory to it of the mutilation, wearing out, defacement, loss, theft or destruction of the original unit certificate; (ii) paid all expenses in connection with the investigation of the facts; (iii) (in case of mutiliation or wearing out or defacement), produced and surrendered to the Trust the mutilated or worn out or defaced unit certificates; and (iv) furnished to the Trust such indemnity as it may require. The Trust shall not incur any liability for issuing such certificate in good faith under the provisions of this clause. (2) Before issuing any certificate under the provisions of this clause, the Trust may require the applicant for the unit certificate to pay a fee of rupee one per unit certificate issued by it together with a sum sufficient in the opinion of the Trust to cover stamp duty, if any, or other charges or taxes including postal registration charges that may be payable in connection with the issue and despatch of such certificate. XVI. Register of unitholders.--The following provisions shall have effect with regard to the registration of unitholders:-- (1) A register of the unitholders shall be kept by the Trust at its Head Office and there shall be entered in the register:-- (a) the names and addresses of the unitholders; (b) the distinctive number of the unit certificate and the number of units held by every such person; and (c) the date on which such person became the holder of the units standing in his name. (2)(a) If a unit certificate stands registered in the names of two persons, such persons shall be deemed to hold the unit certificates jointly and a discharge by the person first named in the register of the unitholders shall, as regards receipt of amounts due in respect of such units, discharge the Trust in respect of such amounts; (b) Where two individuals, none of them being a minor, apply for issue of a unit certificate in their favour and request in the application that either of them should be permitted to deal with the units, the Trust shall record in its books suitable entries to take note of such requests; and when a unit certificate has been issued in such circumstances, then either of the holders shall be entitled to deal with the units represented by such certificate, and a discharge by either of such persons shall, as regards receipt of amounts due in respect of such units, discharge the Trust in respect of such amounts: Provided that the income distribution declared in respect of the units represented by such certificates shall be paid to the person first named in the register of unitholders. (3) Any change of name or address on the part of any unitholder shall be notified to the Trust, which on being satisfied of such change and on compliance with such formalities as it may require, shall alter the register accordingly. (4) Except when the register is closed in accordance with the provisions in that behalf hereinafter contained, the register shall during business hours (subject to such reasonable restrictions as the Trust may impose but so that not less than two hours on each business day shall be allowed for inspection) be open to inspection by any unitholder without charge. (5) The register will be closed at such times and for such periods as the Trust may from time to time determine provided that it shall not be closed for more than 60 days in any one year; the Trust shall give notice of such closure by advertisement in such newspapers as the Board may direct. (6) No notice of any trust express, implied or constructive shall be entered on the register in respect of any unit. XVII. Receipt by unitholder to discharge Trust.--The receipt of the unitholder for any moneys paid to him in respect of the units represented by the certificate shall be a good discharge to the Trust. XVIII. Death or bankruptcy of a unitholder.--(1) In case of death of either of the joint holders of a unit certificate, the survivor shall be the only person recognised by the Trust as having title to or interest in the units represented by the unit certificate. Provided that nothing herein contained shall affect any right which any other person may have as against such survivor in respect of the said units. (2) In the event of death of a single holder, the nominee shall be the person recognised by the Trust as the person entitled to the amount payable by the Trust in respect of units under the regulations. (3) In the absence of a valid nomination by a single unitholder, the executor or administrators of the deceased unitholder or a holder of succession certificate issued under Part X of the Indian Succession Act, 1925 (39 of 1925), shall be the only persons who may be recognised by the Trust as having any title to the unit. (4) Any person becoming entitled to a unit consequent upon the death or bankruptcy of a unitholder may, upon producing such evidence as to his title as the Trust shall consider sufficient, be paid the repurchase value of all units to the credit of the deceased at the repurchase price ruling on the date on which all the formalities in connection with the claim have been complied with by the claimant. XIX. Application on behalf of minors.--(1) An adult individual being a parent, step-parent or other lawful guardian of a minor may apply for the units and deal with them in accordance with and to the extent provided in sub-section (2A) of section 21 of the Act and in this Scheme. (2) Such adult while applying for units shall furnish to the Trust in such manner as may be specified, proof of age of the minor and the capacity to hold and deal with units on behalf of the minor: Provided that the Trust shall be entitled to act on the statements made by such adult in the application form without any further proof. XX. Transfer of units.--(1) Every unitholder shall be entitled to transfer all or any of the units held by him by an instrument in writing in a form approved by the Chairman of the Trust provided that no transfer shall be registered if the registration thereof would result in the transferor or the transferee being a holder of a number of the units not being a multiple of ten. (2) Every instrument of transfer shall be signed by the transferor and the transferee and the transferor shall be deemed to remain the holder of the units transferred until the name of the transferee is entered in the register in respect thereof. (3) Every instrument of transfer shall be duly stamped (if under the law it requires to be stamped) and left with the Trust for registration along with the relevant unit certificate or certificates and such other evidence as the Trust may require in support of the title of the transferor or his right to transfer the units. For purpose of calculation of the value of stamps to be affixed, the face value of each unit shall be Rs. 10, i.e., at par until such time that the repurchase price is fixed and published by the Trust after 1st January, 1993. If the instrument of transfer is not adequately stamped, the Trust reserves the right to reject the instrument of transfer. (4) Every instrument of transfer shall be lodged with the Trust for registration at least a month before the period of closure of books (twice a year) along with the relevant certificate. If the transfer is registered in the books of the Trust after the period of book closure, as the case may be, the dividend accruing for the relative half year will be paid to the transferor. (5) As an effect of a transfer, the nature of the units, remain unaltered, i.e., a transferee cannot seek conversion from the cumulative scheme to the non-cumulative scheme and vice versa. XXI. Nomination by unitholders.--Unitholders holding singly or two unitholders holding units jointly may exercise the right to make or cancel a nomination to the extent provided in the Regulations. XXII. Investment limits.--(1) Investments by the Trust from the funds of the Scheme in the securities of any one company shall not exceed 15 per cent. of the securities issued and outstanding of such companies: Provided that the aggregate of such investments in the capital initially issued by new industrial undertakings shall not at any time exceed 5 per cent. of the total amounts of the said funds. (2) The limits prescribed under sub-clause (1) shall not apply to investment of the Trust in bonds, deposits and debentures of a company whether secured or not. XXIII. Income distribution.--The Trust shall pay dividend to the unitholders at the following rates: ___________________________________________________________ Year (July-June) Rate ________________________________________________________________ 1989-90 12.50% (On a pro rata basis) 1990-91 12.50% 1991-92 12.50% 1992-93 13.00% 1993-94 13.00% 1994-95 14.00% _________________________________________________________________ Under two different options as given below, viz., the cumulative and the non-cumulative income distribution options, the unitholder should exercise his right to participate in either of the options at the time of joining the plan. His decision once made will be irreversible. A. Non-cumulative: (1) Dividend will be payable every half year ending 31st December and 30th June to those whose names stood on the register of unitholders as on the above dates. The income distributable shall be paid as soon as may be after the expiry of the relevant half year. (2) No interest shall be payable by the Trust on such income distributable among the unitholders. (3) The income distributable among unitholders shall be paid by means of a warrant payable at par at a branch of a specified bank. B. Cumulative: A unitholder exercising his right to participate under this option will not received the dividend half yearly, but will authorise the Trust to reinvest the dividend every half year deemed to have been distributed on the units purchased by him, by purchase of further units at par on the 1st of July and 1st of January each year during the currency of the Scheme. The Trust will, however, forward to the unitholder, under this option, a statement showing the units originally purchased by the unitholder and the units acquired through reinvestment of dividends. The units outstanding to the credit of the unitholder at the expiry of the Scheme which includes the original investment and the accumulated dividend reinvested in units shall be rounded off so as to double the number of units originally held by a unitholder. Save and except the reinvestment of dividend, all other provisions of clause A above shall apply to unitholders under option B mutatis mutandis. XXIV. Publication of accounts.--The Trust shall as soon as may be after the 30th June of each year cause to be published in such manner as the Board may decide, accounts in the manner specified by the Board, showing the working of the scheme during the period ending on the 30th June. The Trust shall, on a request in writing received from a unitholder, furnish him a copy of the accounts so published. XXV. Additions and amendments to scheme.--The Board may from time to time add to or otherwise amend this scheme and any amendment thereof will be notified in the Official Gazette. XXVI. Termination of the Scheme.--The Scheme shall stand finally terminated as on 1st July, 1995. The outstanding units of the unitholders, shall be repurchased during the month of July, 1995. The unitholders shall be paid the value of their units at the repurchase price fixed for the final repurchase during the above period. Besides receiving the repurchase price determined, no further benefit of any kind either by way of increase in the repurchase value or by way of dividend for any subsequent period shall accrue and the repurchase value will be paid by the Trust as early as possible after the unit certificate with the form on the reverse thereof duly completed has been received by it. The unit certificate received for repurchase shall be retained by the Trust for cancellation. XXVII. Scheme to be binding on unitholders.--The terms of the Scheme including any amendments thereof from time to time shall be binding on each unitholder and every other person claiming through him as if he had expressly agreed that they should be so binding. XXVIII. Copy of Scheme to be made available.--A copy of this Scheme incorporating all amendments thereto shall be made available for inspection at the offices of the Trust at all times during its business hours on payment of a sum of rupees five. XXIX. Benefits to unitholders.--All benefits accruing under the Scheme in respect of capital, reserves and surpluses, if any, available at the time of the closure of the scheme, shall be distributable only among the unitholders who hold the units at its closure. XXX. Power to construe provisions.--Should any doubt arise as to the interpretation of any of the provisions of the Scheme, the Chairman or in his absence the Executive Trustee shall have powers to construe the provisions of the scheme in so far as such construction is not in any manner prejudicial or contrary to the basic structure of the Scheme and such decision shall be final and conclusive. XXXI. Relaxation/variation/modification of provisions.--The Chairman or in his absence of the Executive Trustee of the Trust in order to mitigate hardship or for smooth and easy operation of the Scheme, relax, vary or modify any of the provisions of the Scheme in the case of any unitholder or class of unitholders upon such conditions as may be deemed expedient. Form-A Emblem Unit Trust of India (Incorporated under the Unit Trust of India Act, 1963) Growing Income Unit Scheme, 1990 (Cumulative and Non-Cumulative) (Clause XII) Unit Certificate No . . . . . . . . . . . No of Units . . . . . . . . . This is to certify that the person/s named in this certificate is/are the registered holder(s) of . . . . . . . . . . . units, each of the face value of rupees ten, subject to the provisions of the Unit Trust of India Act, 1963 (52 of 1963), the regulations framed thereunder and the Growing Income Unit Scheme, 1980 (Cumulative and Non-Cumulative). Name/s: For the Unit Trust of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date: . . . . . . . . . The Scheme shall stand finally terminated on 1st July, 1995. Transferable Form of application for repurchase of units under Growing Income Unit Scheme, 1990 (Cumulative and Non-Cumulative) Date . . . . . . To The Unit Trust of India, . . . . . . . . . . . . . . . . . . . . . . . . I/We . . . . . . . . . . . . . . . am/are the registered holder(s) of . . . . . . . . units of the Growing Income Unit Scheme (Cumulative and Non-Cumulative), 1990 of the Unit Trust of India, I/we, am/are desirous of selling to the Trust all the said . . . . . . . . units and offer the same for repurchase by the Unit Trust of India at par/at the repurchase price prevailing/determined by the Trust in respect of this application. The price of the units may be paid me/us by cash $/cheque/bank draft/at my/our cost. Signature/s or holder(s) 1. . . . . . . . . . . . 2. . . . . . . . . . . . . . . . . . . . . . . . Signature of witness Name: . . . . . . . . . . . Occupation: . . . . . . . . Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . Signature of witness Name: . . . . . . . . . . . Occupation: . . . . . . . . Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. For the use of the office Acceptance date _______________________________________________ * Delete inapplicable words. $ Payment in cash permissible only if the amount does not exceed Rs. 10,000. *Corrigenda [1991] 192 ITR (St.) 154