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    Question

    What happens to ongoing legal proceedings related to the

    business of an existing insurer when its undertaking is transferred on the appointed day? 
    A All ongoing legal proceedings are automatically dismissed Correct Answer Incorrect Answer
    B The existing insurer retains control over the proceedings indefinitely Correct Answer Incorrect Answer
    C New legal proceedings must be initiated against the Indian insurance company Correct Answer Incorrect Answer
    D The proceedings are paused until further notice from the Central Government Correct Answer Incorrect Answer
    E The proceedings can continue and be enforced by or against the Indian insurance company that receives the undertaking Correct Answer Incorrect Answer

    Solution

    Section 6 Effect of transfer of undertakings: (3) If, on the appointed day, any suit,  appeal  or  other  proceeding  of  whatever  nature  in  relation  to  any  business  of  the undertaking which has been transferred under section 5 is pending by or against any such existing insurer as is referred to in that section, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer of the undertaking or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the Indian insurance company in which the undertaking or the part to which the proceeding relates has vested.

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