An endeavor to help General Investors.
As MCA has issued [1]Investor Education and Protection Fund Authority Rules, 2017. As per these rules 'Any money as dividend not claimed by investor within 7 year and 37 days from the date of declaration of dividend, shall be transferred by the company along with interest accrued, if any, thereon to Investor education and protection fund.
Recently MCA has amended The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 Dated 14th August, 2019 Effective from 20th September 2019.
Even All Shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the company in the name of Investor Education and Protection Fund.
In previous months shares of many persons has been transferred in the name of Investor Education and Protection Fund. As a normal person main issue is how to get recover such shares from the IEPF in their name.
In this editorial author shall endeavor to briefly discuss 'Process for a general person to claim their shares from IEPF to their names and mistakes which a person should not made while applying for the same'.
By using the below mentioned process a General Person himself can apply for refund of shares from IEPF to their names.
I. Whether Shareholder can claim transfer of shares/Dividend from Investor Education and Protection Fund.
Yes, any claimant of shares transferred to IEPF shall be entitled to claim the transfer of shares from Investor Education and Protection Fund in accordance with such procedure and on submission of such documents as discussed below.
Process to get refund shares from IEPF:
Any person, whose shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc. has been transferred to the Fund, may claim the shares under provision to sub-section (6) of section 124 or apply for refund under clause (a) of sub-section (3) of section 125 or under proviso to sub-section (3) of section 125, as the case may be, to the Authority.
II.In respect of a Company, how many claim form can be file by the claimant in a financial year.
The claimant shall file only one consolidated claim in respect of a company in a financial year. Claimants have to very conscious while filing the form, because for a company he will get only one chance in a financial year.
III.In case of claimant is legal heir or successor or nominee of the registered share holder. In this case whether they can directly apply to IEPF for refund of shares or dividend?
In case, claimant is a legal heir or successor or administrator nominee of the registered security holder, he has to ensure that the transmission process is completed by the company before filing any claim with the Authority.
Step- I Claimant to Authority
I. Claimant have to make application to MCA in e-form IEPF-5 by mentioning following details:
i. Particular of Applicant
ii. Particular of Company
iii. Details of Shares to be claimed
iv. Details of amount claimed
v. Year wise details of securities/deposits
vi. Aadhaar Number or Passport/OCI/PIO Card No. (in case of NRI/foreigners)
vii. Details of Bank account (Aadhar linked, in case applicant is not NRI/foreigner)in which refund of claim to be made
IV.Whether any documents required to be attached in the form IEPF '“ 5?
No need to attach any documents in the form.
NOTE:
i. Claimant have to download the form IEPF '“ 5 from the website of http://www.iepf.gov.in/
ii. After download have to fill the above mentioned information.
iii. After that claimant has to upload the form on website of IEPF only.
Step- II Claimant to Company
The claimant and after filing the refund claim in this form online, shall to send the attachments prescribed below to Nodal Officer (IEPF) (details about nodal officer given below) of the company at its registered office in an envelope marked 'claim for refund form IEPF Authority' for initiating the verification for claim:
i. Original Physical Share Certificate/ bond/ Debenture Certificate
ii. Indemnity Bond (original) with claimant signature
- On a non-judicial Stamp Paper of the value as prescribed under the Stamp Act if the amount of the claim is Rs.10, 000 or more.
- On a plain paper if the amount claimed does not exceed Rs.10,000.
- In case of refund of shares, on a non-judicial Stamp Paper of the value as prescribed under the Stamp Act.
iv. Copy of Aadhaar Card (For Indian Nationals)
v. Print out of duly filled claim form (IEPF-5) with claimant signature
vi. Copy of acknowledgement
vii. Cancelled Cheque leaf
viii. Copy of Passport, OCI and PIO card in case of foreigners and NRI
Step- III Appointment of Nodal Officer Company Compliance
Every company which is required to credit amounts or shares to the fund or has deposited the amount or transferred the shares to the Fund shall nominate a Nodal Officer, who shall either be a Director or Chief financial Officer or Company Secretary of the company, for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority:
• a company may appoint one or more Officer as Deputy Nodal Officer to assist the Nodal Officer for the purposes of verification of claim and for coordination with Investor Education and Protection Fund Authority:
• the Nodal Officer shall be solely liable for all actions of any officer appointed as Deputy Nodal Officer:
• In case a company fails to appoint Nodal Officer, every director of the company shall be deemed to be nodal officer and be liable for any failure to comply with requirement of these rules.]
Step- IV Company to Authority
I. Information of Nodal Officer to Authority:
The details of the Nodal Officer and Deputy Nodal Officer duly indicating his or her
• Designation,
• Postal Address,
• Telephone and
• Mobile Number and
• Company Authorized e-mail ID
shall be communicated to the Investor Education and Protection Fund Authority in Form No. IEPF-2 within fifteen days from the date of publication of these rules and the company shall display the name of Nodal Officer and his e-mail ID on its website:
Any change in the Nodal Officer or his details shall be communicated to the Authority through Form No. IEPF-2 within seven days of such change along with board resolution thereof.].
II. Information of Nodal Officer to Authority:
• The company shall within 30 days of receipt of claim form, send a verification report to the Authority in the format specified by the Authority along with all documents submitted by the claimant.
• The Company shall attach the scanned copy of all the original documents submitted by the claimant in physical form duly certified by its Nodal Officer along with the e-verification report along with a scanned copy of both sides of original physical share certificate or original bond or deposit or debenture certificate/s duly cancelled and certified:
• Delay in submission of Report:
If the online verification report is not sent by the company within thirty days of filing of claim, the company may do so by paying additional feeof fifty rupees for every day subject to maximum of two thousand and five hundred rupees:
• the company shall be liable to maintain the original documents submitted to it by the claimant and shall produce such documents whenever required:
• Provided also that for failure to submit verification report of the claim in accordance with these rules, the company and its Nodal Officer shall be punishable as per the provisions of the Act.
NOTE:
In case of non receipt of documents by the Authority after the expiry of 60 days from the date of filing of Form IEPF-5, the Authority may reject Form IEPF-5, after giving an opportunity to the claimant to furnish response within a period of 15 days.
Step- IV Authority to Claimant
After verification of the entitlement of the claimant-
To the Amount Claimed, the Authority and then Drawing and Disbursement Officer of the Authority shall present a bill to the Pay and Accounts Office for e- payment as per the guidelines.
To the Shares Claimed. the Authority shall issue a refund sanction order with the approval of the Competent Authority and shall either credit the shares which are lying with depository participant in IEPF suspense account (name of the company) to the Demat account of the claimant to the extent of the claimant's entitlement or in case of the physical certificates, if any, cancel the duplicate certificate and transfer the shares in favour of the claimant.
Time Period: An application received for refund of any claim under this rule duly verified by the concerned company shall be disposed of by the Authority within 60 days from the date of receipt of the verification report from the company.
If Incomplete Application:
Where the Authority, on examining any application for claim, finds it necessary to call for further information or finds such application or e-form or document to be defective or incomplete in any respect,
the Authority shall give intimation of such information called for or defects or incompleteness, by e-mail on the email address of the claimant and the company, which has filed such application or e-form or document,
Directing him or it to furnish such information or to rectify such defects or incompleteness or to re-submit such application or e-Form or document within fifteen days from the date of receipt of such communication, failing which the Authority may reject the claim or e-form No. IEPF-5:
If such information or incompleteness is called from the claimant, he shall file the e-form and shall send such documents as called for within fifteen days, duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim and company shall send a revised verification report:
If any such information or incompleteness is called from the company, the company shall file the revised verification report and shall send such documents as called for within thirty days:
Other Documents Required to be submitted by Claimant:
In case, claimant is a legal heir or successor or administrator or nominee of the registered share holder, the claimant shall ensure to submission of self-attested scanned copy of all documents detailed in Schedule II of these rules online along with the Form No. IEPF-5:
In case of loss of securities held in physical form, he has to ensure to submission of self-attested scanned copy of additional documents detailed in Schedule III of these rules online along with the Form No. IEPF-5:
NOTE: The claimant shall submit in original all these documents duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim.
A. to the Authority in case of loss of securities held in physical mode
a) Notarized copy of FIR/ Police Compliant containing information of security holder, holding details, folio number and distinctive numbers of share certificate.
b) Surety Affidavit of value equal to market value that of shares as on date of execution along with his Proof of identity like Pan Card of sureties duly attested by Notary.
c) Indemnity bond by security holder on a non-judicial stamp paper of requisite value duly attested by Notary Public by the person, in whose name the original share certificate are being issued that he has not sold / disposed off the involved shares or acted in any manner by which any interest of third party would have been created.
d) Copy of advertisement issued in at least one English language national daily newspaper having nationwide circulation and in one regional language daily newspaper published in the place of registered office of company, if the market value of the shares is greater than Rs 10,000.
B. to the Authority in case of loss of securities held in physical mode
Such list is available on the following link:
http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=28498
Penalty:
Any fraudulent claim by the claimant shall be deemed to be fraud within the meaning of section 447 of the Act and the claimant shall be liable accordingly.
If any person deceitfully personates an owner of any security or of any share warrant or coupon issued in pursuance of this Act and thereby files any claim to obtain or attempts to obtain any such security or interest or any such warrant or coupon due to the lawful owner, he shall be punishable under sections 57, 447 and 448 of the Act.]
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