Parankusa ( ) (78 Points)
25 March 2012
I have a doubt. In section 205B, if any person claims amount from the unclaimed dividend a/c, he has to apply to the Central Govt. The section says that the CG will make an order after taking sucj security deemed fit. When the dividend money belongs to the person who claims it, why should he give a security. What is meant by Security in this context? Please clarify.
Sonam Bidasaria
(CA)
(770 Points)
Replied 26 March 2012
As per Rule 6(5) of "The Companies Un-paid Dividend (Transfer to General Revenue Account of the Central Government) Rules, 1978, Registrar cannot issue an order sanctioning the payment of the amount due to the to claimant, if such amount exceeds Rs. 2500, without production of indmenity bond.
Hence, security in this context is "Indeminity Bond".
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