9911796707
TMI Blog2012 (5) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... On 15th July, 2016 for Rs. 1,00,000 (3) Procedure for Redemption/Early Redemption by Bond-holders. The Bond Certificates, duly discharged by the sole/all the Joint-holders (signed on the reverse of the Bond Certificate) to be surrendered for redemption on maturity or on early redemption should be sent by the bond-holder(s) by registered post with acknowledgement due or by hand delivery to the office of the Registrars/the company or to such persons at such addresses as may be notified by the company from time-to-time. Bond-holders desirous of exercising the option for early redemption on any of the above dates should submit their requests in writing to the company/Registrars or to such persons at such addresses as may be notified by the company from time-to-time, along with the Bond Certificate (s) duly discharged by sole/all the joint-holders by signing on the reverse of the Bond Certificates not more than six months and not less than three months prior to the relevant date. The Bond-holder will be entitled to receive the applicable deemed face value only if the request is received in writing within the specified time. Upon the bond-holder(s) receiving the said amount on redempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... informed the respondent No. 1 about the change of her address. There is nothing on record to doubt or disbelieve the contention of the respondent No. 1 that they had written letters to all the bond-holders, who had not surrendered the duly discharged certificates/bonds for encashment. 3. As the petitioner did not submit the bond certificates even after seven years of redemption, the respondent No. 1 transferred the maturity proceeds/redemption amounts under section 205C of the Companies Act, 1956 ('the Act) to the Ministry of Corporate Affairs. The respondent No. 1 has placed on record copy of the challan dated 14th August, 2008 whereby they had transferred the total unclaimed amount of Rs. 14,37,32,595. The said amount becomes part of the corpus of the Investors Education and Protection Fund. The petitioner has challenged the constitutional vires of the said section along with section 205A of the Act. The two provisions read as under : '205A. Unpaid dividend to be transferred to special dividend account. - (1) Where, after the commencement of the Companies (Amendment) Act, 1974, a dividend has been declared by a company but has not been paid or claimed within thirty days from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 205C any unpaid or unclaimed dividend, furnish to such authority or committee as the Central Government may appoint in this behalf a statement in the prescribed form setting forth in respect of all sum included in such transfer, the nature of the sums, the names and last known addresses of the person entitled to receive the sum, the amount to which each person is entitled and the nature of his claim thereto and such other particulars as may be prescribed. (7) The company shall be entitled to a receipt from the authority or committee under sub-section (4) of section 205C for any money transferred by it to the fund and such a receipt shall be an effectual discharge of the company in respect thereof. (8) If a company fails to comply with any of the requirements of this section, the company and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees for every day during which the failure continues. 205C. Establishment of Investor Education and Protection Fund. - (1) The Central/Government shall establish a fund to be called the Investor Education and/Protection Fund ("the Fund"). (2) There shall be credite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y notes, which are not covered by the said section. It is "contended that the provisions of sections 205A and 205C are arbitrary and violate article 14 of the Constitution. In the rejoinder affidavit the petitioner has contended that a huge corpus is accumulated in the Investors Education and Protection Fund, but no steps are being taken to utilise the said corpus. 5. We have examined the contentions raised by the petitioner. At the very outset, it may be noticed that a challenge to vires of a statute requires specific pleadings. This is missing in the present case. The pleadings at best are vague and do not meet the prescribed standard and legal requirements. Reference in this regard can be made to the decision dated Sunita Bugga v. Director of Education [WP(C) No. 8663 of 2008, dated 30-7-2010 wherein it has been held: '10. It is well settled in law that a person who assails the constitutional validity of an Act or a notification must specifically set forth, the grounds for such challenge. In this context, we may refer with profit to certain decisions in the field. 11. In State of Uttar Pradesh v. Kartaar Singh AIR 1964 SC 1135, while dealing with the constitutional validity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the grounds pleaded in sub-paragraphs (i), (iv), (v), (vi) and (vii) to declare section 14 invalid. Furthermore, merely saying that a particular provision is legislatively incompetent [ground (ii)] or discriminatory [ground (iii)] will not do. At least prima facie acceptable grounds in support have to be pleaded to sustain the challenge. In the absence of any such pleading the challenge to the constitutional validity of a statute or statutory provision is liable to be rejected in limine."' 6. Section 205C stipulates that the Central Government shall create a fund called Investors Education and Protection Fund. Sub-section (2) stipulates what money/amount shall be credited to the said fund. This includes unpaid dividend or unpaid application money, which have become refundable, maturity proceeds of debentures as well as matured deposits with company and interest accrued thereon. For an amount to be transferred, it should have remained unclaimed and unpaid for a period of seven years from the date they became due for payment. Explanation to sub-section (2) to section 205C mandates and clarifies that no claim shall lie against the fund or the company in respect of individual amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make a claim within a period of seven years. In case he makes a claim, provisions of section 205C of the Act are not applicable and money cannot be transferred to the fund. We do not see any reason to hold that the said provisions are unconstitutional or they violate article 14 or any other provisions of the Constitution. It cannot be said that the aforesaid provisions are faulty and violate the fundamental rights guaranteed in the Constitution. 9. To strike down section 205C will amount to negating and striking down a worthy and meritorious legislation which is on the whole beneficial and advantageous and in public interest. The petitioner is aggrieved because she did not stake her claim for refund within seven years. She did not inform change of address and, therefore, could not be communicated and informed about the premature redemption. The petitioner also did not bother to read the terms and conditions of allotment including the early redemption clause. These are serious lapses on the part of the petitioner. It is because of these lapses that the petitioner is in the present infelicitous situation. However, these cannot be a ground to strike down section 205C, which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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