Companies Act, 2013 Procedure

Procedure for Claiming Unpaid Amounts and Shares from IEPF

Aakanksha Singhal Aakanksha Singhal
Aakanksha Singhal

Published on: Mar 25, 2022

Updated on: Apr 6, 2022

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Introduction:

Section 124 & 125 of the Companies Act, 2013 explicitly provides the provisions for claiming unpaid amounts and shares from Investor Education and Protection Fund (IEPF).

Mandatory Requirements:

  1. Transfer unpaid or unclaimed dividend to Unpaid Dividend Account within 07 days of the expiry of 30 days from dividend declaration
  2. Nominate a Nodal Officer being a Director or Chief Financial Officer or Company Secretary of the company, for the purposes of verification of claims and coordination with IEPF Authority
  3. Refund application to be disposed of within 60 days of the verification report submitted by the company

Procedure:

  1. Nomination of Nodal Officer [Rule 7 (2A) of the IEPF (Accounting, Audit, Transfer, and Refund) Rules, 2016]:
    • Where the company is required to credit amounts or shares to Investor Education and Protection Fund (IEPF) or has deposited the same to IEPF, it shall nominate a Nodal Officer, being a Director or Chief Financial Officer or Company Secretary of the company, for the purposes of authentication of claims and coordination with IEPF Authority
    • Company may designate one or more Officers as Deputy Nodal Officer to facilitate the Nodal Officer for verification of claims and coordination with the IEPF Authority. However, 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 a Nodal Officer, every director of the company shall be deemed to be a nodal officer and be liable for any failure to comply with the requirement of IEPF (Accounting, Audit, Transfer, and Refund) Rules, 2016.
  2. Intimation to the IEPF Authority [Rule 7 (2B) of the IEPF (Accounting, Audit, Transfer, and Refund) Rules, 2016]:
    • Details of the Nodal Officer and Deputy Nodal Officer indicating his/her designation, postal address, telephone, and mobile number and company authorized e-mail ID shall be communicated to the IEPF Authority in Form No. IEPF – 2 within 15 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
    • In case of any modification in the Nodal Officer or his details the same shall be communicated to the Authority through Form No. IEPF-2 within 07 days of such change along with the following documents;
      • Board Resolution for appointment of Nodal Officer/Change in particulars
      • Any other attachment(s) as may deem fit
  3. Transfer Unpaid/ Unclaimed amount [As per Section 124]:
    • In case of any dividend amount being unpaid or unclaimed until 30 days, the company shall within 07 days from the expiry of such 30 days transfer the entire unpaid/ unclaimed dividend amount to a special account called the Unpaid Dividend Account that shall be opened by the company with any scheduled bank
    • Company shall within a period of 90 days of making any transfer referred in section 124 (1) to the Unpaid Dividend Account, prepare a statement comprising of the names, last known addresses, and the unpaid dividend that each person is entitled to and place it on its website and such other places as may be deemed necessary.
  4. Application by the Claimant [Rule 7 of the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016]:
    • In case of a 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 moved to the Fund, he/she may claim the shares or appeal for a refund to the Authority by making an online application in Form IEPF-5 along with stipulated fee and the following documents [Rule 7 (1)]:
      • Claimant’s Aadhaar card copy [in case of joint holders, Aadhaar card copy of all the holders]
      • Copy of Passport, OCI, and PIO card in case of foreigners and NRI
      • Client Master List of De-mat A/c of the claimant
      • Proof of entitlement [Bonds/Debentures/ Fixed Deposit receipts/ Certificate of Shares/ Interest Warrant/ Dividend Warrant/ Application No./ Statement of transaction etc.]
      • Any other optional attachment(s) as may deem fit
      However, in case the application is being furnished by a legal heir or successor or administrator or nominee of the registered shareholder or transfer or transmission of shares as per Rule 7(8) and Rule 7(9) of the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016, the following documents shall also be attached:
      • Notarized copy of death certificate
      • Notarised succession certificate/ probate/ will
      • No Objection Certificate from Other holders
      • Indemnity bond duly notarised
      • Affidavit in form of surety
      • Any other optional attachment(s) as may deem fit
    • Claimant shall dispatch the following documents to the company’s Nodal Officer (IEPF) at its registered office in an envelope marked “claim for a refund from IEPF Authority” for initiating the verification of its claim [Rule 7 (2)]:
      • Print out of duly filled claim form with claimant signature and if joint holders are involved then the Form should be signed by all the joint holders along with annexures submitted with the form
      • Copy of acknowledgment generated after uploading the claim Form IEPF 5.
      • Copy of Indemnity Bond (original) auto-generated after uploading the claim Form IEPF 5 with claimant signature and proof of payment of applicable stamp duty (Refer Help Kit for Stamp Duty Details).
      • In case of a refund of matured deposit or debenture or bond or where shares (in physical form) are claimed, original certificate/shares thereto
      • Original Cancelled Cheque leaf.
      • In case any Joint holder is deceased, a copy of the Death certificate is to be attached
      • Other optional documents, (if any).
  5. Verification Report by the Company [Rule 7 (3) of the IEPF (Accounting, Audit, Transfer, and Refund) Rules, 2016]:
    • Company shall within 30 days from the date of receipt of claim send an online verification report to the Authority after verification of details furnished in Form No. IEPF – 5 together with all the documents furnished by the claimant
    • It shall annex a scanned copy of all the original documents furnished by the claimant in physical form duly certified by its Nodal Officer along with the e-verification report and scanned copy of both sides of the original physical share certificate or original bond or deposit or debenture certificate/s duly cancelled and certified
    • Company shall be responsible for up keeping of the original documents furnished to it by the claimant and also produce such documents as and when required
    • Authority may reject Form No. IEPF-5 filed for the claims, where the verification report along with documents to the Authority is not furnished by companies within sixty days from the filing date of Form No. IEPF-5, by sending a communication to the claimant and the concerned company over the e-mail address of the claimant and the company asking to furnish response within a period of fifteen days.
    • If the Company and its Nodal Officer fails to furnish a verification report of the claim in accordance with these rules, they shall be punishable as per the provisions of the Act.
  6. Disbursement of Claims [Rule 7 (4) of the IEPF (Accounting, Audit, Transfer, and Refund) Rules, 2016]:
    • Ensuing due verification of the claimant’s entitlement:
      • 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 credit the shares to the DEMAT account of the claimant to the extent of the claimant’s entitlement
    • Such refund application shall be disposed of by the Authority within 60 days from the date of receipt of verification report complete in all respects.

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