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Section 11 of The Industrial Reconstruction Bank (Transfer of Undertakings and Repeal) Act, 1997

Notwithstanding anything contained in any other law for the time being in force, the shares, bonds and debentures of the Company shall be deemed to be approved securities for the purposes of the Indian, Trusts Act, 1882 (2 of 1882) , the Insurance Act, 1938 (4 of 1938) 1***.

Summary

The shares, bonds, and debentures, which are types of investment certificates, issued by the Company are legally classed as approved securities.
This special status applies despite any other conflicting laws in force.
Because they are approved securities, these instruments can be safely bought by public trusts under the Indian Trusts Act, 1882.
They are also recognized as approved investments for insurance companies under the Insurance Act, 1938.

Practical examples

1In 1998, a registered public charitable trust called the Delhi Education Trust has surplus funds of 100,000 rupees. Under the Indian Trusts Act, 1882, the trustees are only allowed to invest in safe, government-approved securities. Because Section 11 deems the Company's bonds to be approved securities, the trustees can legally buy 100,000 rupees worth of the Company's bonds.

2An insurance company named Shield General Insurance wants to invest 500,000 rupees of its policyholders' funds to meet its regulatory investment requirements under the Insurance Act, 1938. It can legally invest this entire amount in the debentures issued by the Company because they carry the approved securities status.

FAQ

1. What types of financial instruments issued by the Company are deemed to be approved securities?

The shares, bonds, and debentures of the Company are all deemed to be approved securities.

2. For which specific laws are these instruments deemed to be approved securities?

They are deemed approved securities for the purposes of the Indian Trusts Act, 1882, and the Insurance Act, 1938.

Test yourself

Q1.Which of the following is NOT listed in Section 11 as a Company instrument deemed to be an approved security?

Q2.For the purposes of which 1882 Act are the Company's securities deemed to be approved?

Q3.Under which 1938 Act are the Company's shares, bonds, and debentures deemed approved securities?

Q4.What is the significance of the phrase "Notwithstanding anything contained in any other law"?

Q5.Which act omitted references to the Banking Regulation Act, 1949, from Section 11?

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