The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
Parliament enacted the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, Act No. 53 of 2003, dated 30 December 2003, to transfer the undertaking of the Industrial Development Bank of India to the Industrial Development Bank of India Limited and repeal the Industrial Development Bank of India Act, 1964. The Act came into force on 2 July 2004, and the reproduced text records amendments made by the Finance Act, 2021 with effect from 1 April 2021.
What the law does
The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 transfers the entire undertaking of the Industrial Development Bank of India to the Industrial Development Bank of India Limited, a company formed under the Companies Act, 1956. The company is treated as a banking company and carries on banking business under the Banking Regulation Act, 1949, subject to the special provisions in this law.
The law also repeals the Industrial Development Bank of India Act, 1964. The reproduced text records that the Finance Act, 2021 changed the provisions concerning the company’s banking licence with effect from 1 April 2021.
Property and contractual consequences
The transfer covers the Industrial Development Bank of India’s complete business and property, whether located within or outside India. It includes:
- Land, buildings, vehicles and other movable and immovable property.
- Tenancies, leases, loans, advances, guarantees and book debts.
- Cash, deposits, investments, shares, bonds and debentures.
- Records, registers, documents, rights, powers and privileges.
- Borrowings, liabilities and other existing obligations.
Existing contracts, deeds, bonds, guarantees, powers of attorney and working arrangements continue in full force. They become enforceable by or against the Industrial Development Bank of India Limited as though the company had originally been named as a party.
Pending proceedings and existing causes of action connected with the transferred undertaking may also continue by or against the company. They cease to be enforceable by or against the former Development Bank.
Who may be affected
The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 may matter to property owners, buyers, tenants, borrowers, guarantors or professionals dealing with land, leases, securities or contracts previously held by the Industrial Development Bank of India. A document naming the former Development Bank does not lose effect merely because of the transfer. The corresponding right, liability or obligation continues with the Industrial Development Bank of India Limited.
Other continuing rights
Fiscal concessions, licences, benefits, privileges and exemptions granted to the Development Bank continue for the company. Tax exemptions and specified tax benefits also continue, and guarantees given for or in favour of the Development Bank remain operative in relation to the company.
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Common questions
What happens to land or buildings owned by the Industrial Development Bank of India?
Land, buildings and other property forming part of the undertaking vest in the Industrial Development Bank of India Limited from the appointed day.
Does an old lease naming the Industrial Development Bank of India remain valid?
Yes. Existing leases and other instruments continue in full force and become enforceable by or against the Industrial Development Bank of India Limited.
What happens to a pending property case involving the former Development Bank?
A pending proceeding or existing cause of action connected with the transferred undertaking may continue by or against the Industrial Development Bank of India Limited.
Does a guarantee connected with a loan from the Development Bank end because of the transfer?
No. A guarantee given for or in favour of the Industrial Development Bank of India for a loan, lease, finance or other assistance continues in relation to the company.
