Commencement of provisions related to section 124 & 125 of Companies Act 2013

MCA vide notification dated September 05, 2016 has provided that the provisions of Section 124 (1) to (4), (6) and Section 125 (8) to (11) of the Companies Act, 2013 i.e. pertaining to the manner of administration of the Investor Education and Protection Fund and administration of Investor Education and Protection Fund by the Administrative Authority established by the Central Government under the Companies Act, 2013 respectively, shall be effective from September 05, 2016.

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Notification of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016

MCA vide notification dated September 05, 2016 has notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 which shall be effective from September 07, 2016.

Key highlights of the rules are given below:

1. The Rule shall be applicable on the "Company" as defined in Section 2 (20) of the Act and includes 'corresponding new bank' as defined in sub-section (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and clause (b) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980).
2. The Companies are required to credit the amount to the Fund as provided under clause (a) to (n) of sub-section (2) of section 125 of the Act into the specified branches of Punjab National Bank or other Authorised Banks engaged by the MCA-21 system, within a period of thirty days of such amounts becoming due to be credited to the Fund.
3. The company shall maintain record consisting of name, last known address, amount, folio number or client ID, certificate number, beneficiary details etc. of the persons in respect of whom unpaid or unclaimed amount has remained unpaid or unclaimed for a period of seven years and has been transferred to the Fund and the Authority shall have the powers to inspect such records.
4. Every company shall within a period of ninety days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act and every year thereafter till completion of the seven years period, identify the unclaimed amounts, as referred in sub-section 2of section 125 of the Act, as on the date of holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act, separately furnish and upload on its own website and also on website of Authority or any other website as may be specified by the Government, a statement or information through Form No. IEPF 2, separately for each year.
5. The Companies shall credit the shares as required under section 124(6) to an IEPF suspense account (on the name of the company) with one of the depository participants as may be identified by the Authority within a period of thirty days of such shares becoming due to be transferred to the Fund. However, in case the beneficial owner has encashed any dividend warrant during the last seven years, such shares shall not be required to be transferred to the Fund even though some dividend warrants may not have been encashed. The manner of transfer has also been detailed out.
6. The company shall inform at the latest available address, the shareholder concerned regarding transfer of shares three months before the due date of transfer of shares and also simultaneously publish a notice in the leading newspaper in English and regional language having wide circulation and on their website giving details of such shareholders and shares due for transfer. Provided that in cases, where the seven years as provided under sub-section (5) of section 124 have been completed or are being completed within three months from the date of coming into force of these rules, the company shall initiate the aforesaid procedure immediately and transfer the shares on completion of three months.
7. Where there is a specific order of Court or Tribunal or statutory Authority restraining any transfer of such shares and payment of dividend, the company shall not transfer such shares to the Fund. The company shall furnish details of such shares and unpaid dividend to the Authority in Form No. IEPF 3 within thirty days from the end of financial year.
8. If the company is getting delisted, the Authority shall surrender shares on behalf of the shareholders in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 and the proceeds realised shall be credited to the Fund and a separate ledger account shall be maintained for such proceeds.
9. In case the company whose shares or securities are held by the Authority is being wound up, the Authority may surrender the securities to receive the amount entitled on behalf of the security holder and credit the amount to the Fund and a separate ledger account shall be maintained for such proceeds.
10. 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 by making an  application in Form IFPF 5 online available on website www.iepf.gov.in along with fee, as decided  by  the Authority from time to time in consultation with the Central Government, under his own signature.
11. 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 sixty days from the date of receipt of the verification report from the company, complete in all respects and any delay beyond sixty days shall be recorded in writing specifying the reasons for the delay and the same shall be communicated to the claimant in writing or by electronic means.
12.  The company shall furnish a statement to the Authority in Form No. IEPF 6 within thirty days of end of financial year stating therein the amounts due to be transferred to the Fund in next financial year. Further, the company shall also furnish a statement to the authority within thirty days of the closure of its accounts for the financial year stating therein the reasons of deviation, if any, of amounts due to be transferred to the fund and actual amounts transferred to the Fund.
13. The Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001and Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 has been repealed.  (2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the rules repealed by sub-rule (1) shall in so far as it is not inconsistent with the provisions of these rules, be deemed to have been done or taken under the corresponding provisions of these rules.

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Amendment in the rules related to Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding of meeting and provision for offices and officers) Rules, 2016

MCA vide notification dated September 05, 2016 has amended the Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding of meeting and provision for offices and officers) Rules, 2016. By virtue of this amendment, Rule 3A has been inserted after Rule 3 to the said rules, which provides that the Authority shall be a Body Corporate by the name aforesaid having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued.

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Notification relating to establishment of Special Courts
MCA vide notification dated September 01, 2016 has provided that the Central Government with the concurrence of the Chief Justice of the respective State’s High Courts, designates the courts specified in column no. (2) as Special Courts in respect of jurisdiction mentioned in column no. (3) for the purposes of providing speedy trial of offences punishable with imprisonment of two years or more under the Companies Act, 2013, namely:-

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