We have seen many people stand un-aware of their shareholding in the Company due to several reasons and they find themselves helpless regarding the procedure to claim the same as filing of Form on IEPF website as it is little tricky from their point of view. Keeping in mind their point of view, we tried to cover the procedure for claiming unpaid amount and shares from IEPF.

One of the important provisions relating to Investor Education and Protection Fund under Companies Act 2013 (“the Act”) had been notified by Ministry of Corporate Affairs vide notification dated September 05, 2016 which became effective from September 07, 2016. Among other things, the provisions provide the manner of transferring the unpaid and unclaimed dividend including the shares on which the said amount was due or unclaimed to the Investor Education and Protection Fund.

Now, one question may be come to the mind that which shares are required to be transferred to the Fund (IEPF)? Answer as per sub-section (6) of section 124 of the Companies Act 2013 is that 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 the Fund irrespective of the fact whether the said dividend has been transferred to the Fund or not. During the consecutive period of seven years or more, if at any point of the time, a shareholder has requested for renewal of share warrant, then it can’t be said that dividend remain unclaimed.

As per Rule 7(1) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, any person, whose shares, unclaimed dividend, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc., have been transferred to IEPF, may claim the shares under proviso to sub-section (6) of section 124 of the Companies Act, 2013 or apply for refund under clause (a) of Sub-section (3) of Section 125 or under proviso to sub-section (3) of Section 125 of the Companies Act 2013, as the case may be, to the IEPF Authority.

It is to be noted that during the consecutive period of seven years or more, if at any point of the time, a shareholder has requested for renewal of share warrant, then it can’t be said that dividend remain unclaimed.

Further, Rule 7(9) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 provides that in case claimant is a legal heir or successor or administrator or nominee of any other registered security or in cases where request of transfer or transmission of shares is received after the transfer of shares by company to the IEPF authority, the company shall verify all requisite documents required documents required for registering transfer or transmission and shall issue letter to the claimant indicating his entitlement to the said security and furnish a copy of the same to the IEPF authority while verifying the claim of such claimant through its e-verification report.

As per Rule 7(2A) and (2B) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, every company which is required to credit amounts or shares or has deposited the amount or transferred the shares to IEPF shall nominate a Nodal Officer, who shall either be a director or CFO or CS of the company, for the purposes of verification of claim and for coordination with IEPF authority and company may appoint one or more Deputy Nodal Officer to assist the Nodal Officer and the company shall display the name of Nodal Officer and his e-mail ID on its website.

Steps to be followed for claiming Unpaid Amounts and Shares from IEPF
Step No. 1

 

The person, in respect of whom any amount or shares is transferred to the IEPF, can make an application by filing web-based Form IEPF-5 with the IEPF authority through the website www.iepf.gov.in.

After submission, Form IEPF-5 shall be transferred online to the Nodal Officer of the concerned company for verification of claim.

Step No. 2 > The claimant after making an application in Form IEPF-5, shall send original physical share certificate, original bond, deposit certificate, debenture certificate, as the case may be, along with Indemnity Bond, Advance Receipts, any other documents as enumerated in Form IEPF-5, duly signed by him to the Nodal Officer of the concerned company at its registered office for verification of the claim.

> If 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 along with Form IEPF-5. Following documents are required:

  • Aadhaar Card of the claimant and if joint holders are there, copy of Aadhaar card of all joint holders.
  • 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 share/Interest warrant/ Dividend warrant, Application No. / Statement of transaction etc.
  • Notarized copy of death certificate, if any.
  • Notarized succession certificate/Probate/Will, if any.
  • No Objection Certificate from other holder, if any.
  • Affidavit in form of surety, if any.

> in case of loss of securities held in physical form, he has to ensure to physical form, he has to ensure to submission of self-attested scanned copy of following documents online with the Form IEPF 5

  • Notarized copy of FIR/ Police Complaint containing information of security holder, holding details, folio number and distinctive numbers of share certificate.
  • 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.
  • 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.
  • 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 that Rs. 10,000.
Step No. 3 The company shall, within 30 days from the date of receipt of claim, send an online verification report to the IEPF Authority after verification of details in the format specified by the IEPF Authority along with all the documents submitted by the scanned copy of all the original documents submitted by the claimant in physical form duly certified by the Nodal Officer along with a scanned copy of both sides of original bond or deposit or debenture certificate duly cancelled and certified.
Step No. 4 After receiving the verification report from the company, IEPF authority shall verify the amount/shares claimed within 60 days from the date of receipt of the verification report from the company.

> If the IEPF authority finds that it necessary to call for further information/ clarification or finds such application or e-form or document to be defective or incomplete in any respect, the IEPF authority 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 within 15 days from the date of receipt of such communication, failing which the IEPF Authority may reject the claim or Form IEPF-5.

> If such information or incompleteness is called from the claimant, he shall file Form IEPF-5 again and shall send such documents as called for within 15 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 revised verification report and shall send such documents within 30 days.

Step No. 5 After verification –
> to the amount claimed, IEPF authority and then drawing and disbursement officer of the IEPF authority shall present a bill to the pay and accounts office for e-payment; > to the shares claimed, IEPF 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.

 (Disclaimer: The entire contents of this document have been developed on the basis of relevant statutory provisions and as per the information existing at the time of the preparation. Though the authors have tried to make utmost efforts to provide authentic information however, the material contained in this document does not constitute/substitute professional advice that may be required before acting on the matter.)

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