INVESTOR EDUCATION & PROTECTION FUND

This query is : Resolved

devang doshi (Querist)
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03 March 2010 SIR,
PLEASE SOLVE MY THIS PROBLEM.
WHEN ONE COMPANY HAS TRANSFERRED ONE'S NON CLAIMED AMOUNT FOR 7 YEARS OF DEBENTURE/DIVIDEND, THEN WHAT CAN INVESTOR DO FOR RECOVERING SUCH AMOUNT FROM INVESTOR EDUCATION & PROTECTION FUND?

WHAT IS THE PROCEDURE FOR RECOVERING OF OUR AMOUNT FROM SUCH FUND?

Rasesh

Rasesh (Expert)
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03 March 2010 Once the amount is transferred to the IEPF, there is no way of recovering it back.

The erstwhile provisions wherein the amount was to be transferred to Central Govt at the end of three years, provided for recovery mechanism. But in the current IEPF rules, there is no mechanism of recovering the amount from the fund.

devang doshi

devang doshi (Querist)
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06 March 2010 please refer page no. 2.4,
pera no. 2.7
peragraph 2.
book company law
of new ca final course.

at that place, person can claim its amount from government.

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Rasesh

Rasesh (Expert)
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08 March 2010 Sorry. But it would be difficult for me to get that book. I am a working professinal and had cleared CS in 2001. I request if you can send scanned copy of that page or post it in forum.

devang doshi

devang doshi (Querist)
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10 March 2010 sir, here is the extract of my text book.
please solve my problem.

"2.7 PAYMENT OF UNPAID OR UNCLAIMED DIVIDEND (SECTION 205B)
Any money transferred to the unpaid dividend account of a company in pursuance of this
section which remains unpaid or unclaimed for a period of seven years from the date of such
transfer shall be transferred by the company to the Investor Education and Protection Fund
established under sub-section (1) of section 205C.]
Any person claiming to be entitled to any money transferred under sub-section (5) of section
205A to the fund of the Central Government, may apply to the Central Government for an
order for payment of the money claimed; and the Central Government may, if satisfied,
whether on a certificate by the company or otherwise, that such person is entitled to the whole
or any part of the money claimed, make an order for the payment to that person of the sum
due to him after taking such security from him as it may think fit :"

Rasesh

Rasesh (Expert)
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10 March 2010 The Section that has been referred above is Sec 205B. Proviso to Sec 205B clearly states that amounts cannot be obtained back from IEPF. I am reproducing below the entire section:

205B. Payment of unpaid or unclaimed dividend

Any person claiming to be entitled to any money transferred under sub-section (5) of section 205A to the general revenue account of the Central Government, may apply to the Central Government for an order for payment of the money claimed; and the Central Government may, if satisfied, whether on a certificate by the company or otherwise, that such person is entitled to the whole or any part of the money claimed, make an order for the payment to that person of the sum due to him after taking such security from him as it may think fit.

Provided that nothing contained in this section shall apply to any person claiming to be entitled to any money transferred to the fund referred to in section 205C on and after the commencement of the Companies (Amendment) Act, 1999.

The above proviso makes it clear that the amount transferred to IEPF i.e. the fund formed under Section 205C cannot be obtained back from the Central Govt.