1
[24. Funds of the Corporation.—(1) The Corporation shall have its own fund or funds, and all
receipts of the Corporation shall be credited thereto and all payments of the Corporation shall be made
therefrom:
Provided that the Board may, in relation to any of the funds of the Corporation or otherwise, establish
reserves which may or may not be allocated for a specific purpose, and such sums as the Board may
determine, may be transferred to or from such reserves.
(2) The Board shall, for every financial year after the financial year in which the provisions of section
136 of the Finance Act, 2021 come into force, cause to be maintained—
(a) a participating policyholders fund, to which all receipts from participating policyholders shall
be credited and from which all payments to such policyholders shall be made; and
(b) a non-participating policyholders fund, to which all receipts from non-participating
policyholders shall be credited and from which all payments to such policyholders shall be made:
Provided that the members, by resolution in a general meeting, may exempt maintenance of such
funds for one financial year at a time up to two financial years.
24A. Books of account, etc.---(1) The Corporation shall prepare and keep at its central office books
of account and other relevant books and records and financial statement for every financial year which
give a true and fair view of the state of its affairs, including that of its zonal offices, and which explain the
transactions effected both at the central office and at its zonal offices.
(2) The Corporation shall prepare and keep at each zonal office of the Corporation, books of account
and other relevant books and records and financial statement for every financial year which give a true
and fair view of the state of affairs of every divisional office established in the zone corresponding to such
zonal office and which explain the transactions effected thereat.
(3) The Corporation shall prepare and keep at each divisional office of the Corporation, books of
account and other relevant books and records and financial statement for every financial year which give
1. Subs.by Act 13 of 2021, s. 136, for section 24 (w.e.f. 30-6-2021).
27
a true and fair view of the state of affairs of every branch established under such divisional office and
which explain the transactions effected thereat.
(4) All or any of the books of account and other relevant books and records referred to in sub-section
(1) or sub-section (2) or sub-section (3) may be kept at such other place or places in India as the Board
may decide.
(5) The Corporation shall be deemed to have complied with the provisions of sub-section (1) or subsection (2) or sub-section (3), in respect of a zonal office or a divisional office, other than the central
office, or a branch of the Corporation, whether within or outside India, if proper books of account relating
to the transactions effected at such office or branch, are kept thereat and proper summarised returns are
sent periodically to the central office or the corresponding zonal office or the corresponding divisional
office, or to the other place referred to in sub-section (4).
(6) The books of account and other relevant books and records referred to in sub-section (1) or subsection (2) or sub-section (3) may be kept in electronic form, in such manner as the Board may determine.
(7) The books of account of the Corporation relating to a period of not less than ten financial years
immediately preceding a financial year, together with the vouchers relevant to any entry in such books of
account, shall be kept in good order:
Provided that where the Central Government has appointed a special auditor under section 25D or is
of the opinion that circumstances exist which render it necessary so to do, it may direct the Corporation
that the books of account be kept for such longer period as the Central Government may specify.
24B. Financial statements.—(1) The financial statements of the Corporation shall give a true and
fair view of the state of affairs of the Corporation and shall be in conformity with applicable accounting
requirements as may be applicable for such financial statements:
Provided that the financial statements shall not be treated as not disclosing a true and fair view of the
state of affairs of the Corporation, merely by reason of the fact that they do not disclose any matters
which are not required to be disclosed by this Act or by the Insurance Act or by the Insurance Regulatory
and Development Authority Act, 1999 (42 of 1999) or by any other law for the time being in force.
(2) At every annual general meeting, the Board shall place before such meeting financial statements
for the preceding financial year.
(3) The Corporation shall, in addition to financial statements provided under sub-section (2), prepare
a consolidated financial statement of the Corporation in conformity with the requirements referred to in
sub-section (1), and shall place the same before the annual general meeting, along with the placing of its
financial statements under sub-section (2):
Provided that the Corporation shall also attach along with its financial statements, a separate
statement containing the salient features of the consolidated financial statement.
(4) The provisions of this Act applicable to financial statements under sub-section (1) and under
section 24C, the inquiry by the auditor into matters referred to in and making of the auditor’s report on
accounts under section 25B, and adoption of financial statements under section 23A at the annual general
meeting, shall, mutatis mutandis, apply to the consolidated financial statement referred to in sub-section
(3).
(5) Without prejudice to anything contained in sub-section (1) or sub-section (3), where the financial
statements are not in conformity with the standards applicable thereto, the Corporation shall disclose in
the financial statements the deviation from applicable standards, the reasons therefor and the financial
effects, if any, arising out of such deviation.
(6) Financial statements including consolidated financial statement, if any, shall be approved by the
Board before they are signed on behalf of the Board by two whole-time directors, one director other than
a whole-time director, the heads of the finance and secretarial functions of the Corporation and its
Appointed Actuary, for submission to the auditor for his report thereon.
(7) The auditor’s report shall be attached to every financial statement.
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(8) A signed copy of every financial statement, including consolidated financial statement, if any,
shall be issued, circulated or published, along with a copy each of—
(a) any notes annexed to or forming part of such financial statement;
(b) the auditor’s report; and
(c) the Board’s report referred to in sub-section (1) of section 24C.
24C. Board’s report.—(1) There shall be attached to financial statements placed before general
meeting, a report by the Board, which shall include—
(a) number of meetings of the Board;
(b) a Directors’ Responsibility Statement;
(c) details in respect of frauds reported by auditors;
(d) a statement on declarations given by independent directors under the second proviso to subsection (3) of section 4;
(e) the Corporation’s policy on directors’ appointment, including the criteria for determining
qualifications, positive attributes and independence of a director, which are referred to in section 19B;
(f) explanations or comments by the Board on every qualification, reservation or adverse remark
or disclaimer made in the auditor’s report;
(g) particulars in respect of investments in terms of the provisions of section 27A of the Insurance
Act as made applicable to the Corporation by notification issued under sub-section (2) of section 43;
(h) particulars of contracts or arrangements with related parties, referred to in sub-section (1) of
section 4C;
(i) the state of the Corporation’s affairs;
(j) the amounts, if any, which are carried to any reserves;
(k) the amount, if any, which it recommends should be paid by way of dividend;
(l) material changes and commitments, if any, affecting the financial position of the Corporation,
which have occurred between the end of the financial year to which the financial statements relate
and the date of the report;
(m) a statement indicating the manner in which annual evaluation of the performance of
individual directors has been made under section 19B;
(n) such other matters as may be prescribed:
Provided that where disclosures referred to in this sub-section have been included in the financial
statements, such disclosures may be referred to instead of being repeated in the Board’s report:
Provided further that where the policy referred to in clause (e) is made available on the
Corporation’s website, it shall be sufficient compliance of the requirement under the said clause if the
salient features of the policy and any changes therein are specified in brief in the Board’s report and
the web-address at which the policy is available is indicated therein.
(2) The Directors’ Responsibility Statement referred to in clause (b) of sub-section (1) shall state
that—
(a) in the preparation of the annual accounts, the requirements referred to in section 24B were
followed, along with proper explanation relating to material departures;
(b) accounting policies were selected and applied consistently and the judgments made and
estimates were reasonable and prudent, so as to give a true and fair view of the state of affairs of the
Corporation at the end of the financial year and of the profit and loss of the Corporation for that
period;
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(c) proper and sufficient care for the maintenance of adequate accounting records was taken in
accordance with the provisions of this Act for safeguarding the assets of the Corporation and for
preventing and detecting fraud and other irregularities;
(d) the annual accounts were prepared on a going concern basis;
(e) the vigilance administration referred to in clause (h) of sub-section (1) of section 8 of the
Central Vigilance Commission Act, 2003 (45 of 2003) was in operation in the Corporation under the
superintendence of the Central Vigilance Commission, and in addition, internal financial controls to
be followed by the Corporation had been laid down and were operating effectively; and
(f) proper systems were devised to ensure compliance with the provisions of applicable laws and
were operating effectively.
Explanation.—For the purposes of this sub-section, the expression “internal financial controls”
means the policies and procedures adopted for ensuring the orderly and efficient conduct of the
Corporation’s business, including adherence to its policies, safeguarding of its assets, prevention and
detection of errors, accuracy and completeness of accounting records, and timely preparation of
reliable financial information.
(3) The Board’s report and any annexures thereto under sub-section (1) shall be signed on behalf
of the Board by two whole-time directors and one director other than a whole-time director.
24D. Penalties.—If the Chief Executive or the Managing Director in charge of finance or the head of
the finance function of the Corporation or any other person of the Corporation charged by the Board with
the duty of complying with the provisions of section 24A or section 24B or section 24C contravenes any
of the said provisions, such Chief Executive or Managing Director or head of finance function or other
person shall, for each section whose provisions have been contravened, be liable to pay penalty of a sum
which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.]
1
[25. Appointment of auditors.—(1) The Corporation shall, at its first annual general meeting,
appoint as many auditors (which may be individual or firm) as it deems fit, and such auditor shall hold
office from the conclusion of that meeting till the conclusion of its sixth annual general meeting
thereafter, and shall similarly appoint auditor for subsequent periods of five years at a time, and the
manner and procedure of selection of auditors by the members at such a meeting shall be such as may be
prescribed:
Provided that before such appointment is made, the written consent of the auditor to such
appointment, and a certificate from the auditor that the appointment, if made, shall be in accordance with
such conditions as may be prescribed, shall be obtained from the auditor:
Provided further that such certificate shall also declare that the auditor satisfies the criteria provided
for eligibility for appointment as an auditor of a company under section 141 of the Companies Act.
(2) The Corporation shall not appoint an auditor for more than one term of five consecutive years:
Provided that an auditor who has completed the term of appointment shall not be eligible for reappointment or for fresh appointment as auditor for a period of five years from such completion:
Provided further that no audit firm shall be appointed as auditor for a period of five years which, if
appointed, as on the date of its appointment, would have a common partner or partners with the audit firm
whose term as auditor in the Corporation had expired in the financial year immediately preceding the
financial year in which fresh appointment is to be made, or which is associated with the same network of
audit firms as the audit firm whose term had expired as aforesaid:
Provided also that nothing contained in this sub-section shall prejudice the right of the Corporation to
remove an auditor or the right of the auditor to resign from such office of the Corporation.
Explanation.—For the purposes of this sub-section, the expression “same network” includes firms
operating or functioning under a common brand name or trade name, or under common control, or which
1. Subs. by Act 13 of 2021, s. 137, for section 25 (w.e.f. 30-6-2021).
30
are network firms as defined under any guidelines for networking issued by the Institute of Chartered
Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949 (38 of 1949).
(3) Subject to the provisions of this Act, the Corporation may resolve in a general meeting to provide
that—
(a) in the audit firm appointed by it, the auditing partner and his team shall be rotated at such
intervals as may be resolved by members;
(b) the audit shall be conducted by more than one auditor.
(4) Any casual vacancy in the office of an auditor shall be filled by the Board within thirty days, but if
such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be
approved by the Corporation in a general meeting convened within three months of the Board making
recommendations in this behalf, and the auditor so appointed shall hold office till the conclusion of the
next annual general meeting.
(5) Where at any annual general meeting, no auditor is appointed, the existing auditor shall continue
to be the auditor of the Corporation.
(6) All appointments, including the filling of a casual vacancy of an auditor under this section, shall
be made after taking into account the recommendations of the Audit Committee.
(7) The remuneration of the auditor shall be fixed in the general meeting or in such manner as may be
determined therein.
(8) Until the first annual general meeting is held, auditors duly qualified to act as auditors of
companies under the law for the time being in force relating to companies shall be appointed by the Board
with the previous approval of the Central Government, and shall receive such remuneration from the
Corporation as the Central Government may fix.
(9) Notwithstanding anything contained in sub-section (1), where an auditor has been appointed
previous to the first annual general meeting, either under section 25 [as it stood before the coming into
force of section 137 of the Finance Act, 2021] or thereafter under sub-section (8), and the term specified
for such auditor’s appointment has not expired, and the auditor meets the criteria referred to in subsection (1), such auditor shall continue till the expiry of the term so specified:
Provided that nothing contained in this sub-section or in section 25A shall prejudice the right of the
Corporation to remove such auditor or the right of the auditor to resign from such office of the
Corporation.
(10) An auditor appointed under sub-section (1) or sub-section (8) or sub-section (9) shall provide to
the Corporation or its subsidiaries such other services as are approved by the Board, but shall not include
any of the services, whether rendered directly or indirectly, that are enumerated in section 144 of the
Companies Act:
Provided that an auditor who has been performing any non-audit services on or before the coming
into force of section 137 of the Finance Act, 2021 shall comply with the provisions of this sub-section
before the close of the first financial year in which the said section comes into force.
Explanation.—For the purposes of this section, the word “firm” shall include a limited liability
partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009).
25A. Removal and resignation of auditor.—(1) The auditor appointed under section 25 may be
removed from office before expiry of the term of appointment only by a special resolution:
Provided that before taking any action under this sub-section, an auditor proposed to be removed shall
be given a reasonable opportunity of being heard, which shall include the right to represent in writing to
the Corporation and, where the auditor requests that such representation be notified to members, to have a
copy thereof sent to every member and in case a copy is not sent as aforesaid because it was received too
late, to have the representation read out at the meeting, without prejudice to the right to be heard orally.
31
(2) The auditor who has resigned from the Corporation shall file within a period of thirty days from
the date of resignation, a statement in the prescribed form with the Corporation, indicating the reasons and
other facts as may be relevant with regard to the resignation.
(3) Without prejudice to any action under this Act or any other law, if the Central Government is
satisfied, in consultation with the Comptroller and Auditor General of India, that any change of auditor is
required, it may make an order that the auditor shall not function as such and may appoint another auditor
in place of such auditor.
25B. Powers and duties of auditors and auditor’s report.—(1) Every auditor of the Corporation
shall have a right of access at all times to the books of account and vouchers of the Corporation, and shall
be entitled to require from the officers of the Corporation such information and explanation as the auditor
may consider necessary for the performance of his duties as auditor, and shall, amongst other matters,
inquire into the following matters, namely:—
(a) whether loans and advances made by the Corporation on the basis of security have been
properly secured;
(b) whether the terms on which loans and advances have been made are prejudicial to the interests
of the Corporation or its members;
(c) whether transactions of the Corporation which are represented merely by book entries are
prejudicial to its interests;
(d) whether so much of the assets of the Corporation as consist of shares, debentures and other
securities have been sold at a price less than that at which they were purchased;
(e) whether loans and advances made by the Corporation have been shown as deposits;
(f) whether personal expenses have been charged to revenue account;
(g) where it is stated in the books and documents of the Corporation that any shares have been
allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash
has actually been so received, whether the position as stated in the account books and the balancesheet is correct, regular and not misleading:
Provided that the auditor shall also have the right of access to the records of all the subsidiaries and
associate companies of the Corporation, in so far as they relate to consolidation of the Corporation’s
financial statements with those of such subsidiaries and associate companies.
(2) The auditor shall make a report to the members on the accounts examined by the auditor and on
every financial statement which is required by or under law to be placed in general meeting, and such
report shall, after taking into account applicable provisions of this Act and any other law for the time
being in force, the standards referred to in section 24B, and matters that are required to be included in the
audit report under the provisions of this Act or any other law for the time being in force, and to the best of
the information and knowledge of the auditor, state that the said accounts and financial statements give a
true and fair view of the state of the Corporation’s affairs as at the end of its financial year and profit or
loss and cash flow for the year.
(3) The auditor’s report shall also state—
(a) whether the auditor has sought and obtained all the information and explanations which to the
best of the auditor’s knowledge and belief were necessary for the purpose of audit and if not, the
details thereof and the effect of such information on the financial statements;
(b) whether, in the auditor’s opinion, proper books of account as required by law have been kept
by the Corporation so far as appears from the auditor’s examination of those books and proper returns
adequate for the purposes of audit have been received from branches not visited by the auditor;
(c) whether any report referred to in the proviso to sub-section (6) has been sent to the
Corporation’s auditor, and the manner in which the Corporation’s auditor has dealt with it in
preparing the auditor’s report;
32
(d) whether the Corporation’s balance-sheet and profit and loss account dealt within the report are
in agreement with the books of account and returns;
(e) whether, in the auditor’s opinion, the financial statements comply with applicable standards;
(f) the observations or comments of the auditor on financial transactions and matters which have
any adverse effect on the functioning of the Corporation;
(g) whether any director is disqualified to be or remain a director under clause (i) of section 4A;
(h) any qualification, reservation or adverse remark relating to the maintenance of accounts and
matters connected therewith;
(i) whether the Corporation has adequate internal financial controls with reference to financial
statements in place and the operating effectiveness of such controls;
(j) such other matters as may be prescribed.
(4) Where any of the matters required to be included in the audit report under this section is answered
in the negative or with a qualification, the report shall state the reasons therefor.
(5) All qualifications, observations or comments mentioned in the report of the auditor appointed for
the Corporation, in respect of financial transactions or matters that have any adverse effect on the
functioning of the Corporation, shall be read out in general meeting and shall be open to inspection by
any member.
(6) In respect of a branch or an office of the Corporation, the accounts shall be audited either by the
auditor appointed for the Corporation (herein referred to as Corporation’s auditor) in this section or by
any other person qualified for appointment as an auditor of the Corporation and appointed as such under
section 25, or where the branch or office is situated in a country outside India, the accounts of the branch
or office shall be audited either by the Corporation’s auditor or by an accountant or by any other person
duly qualified to act as an auditor of the accounts of the branch or office in accordance with the laws of
that country, and the duties and powers of the Corporation’s auditor with reference to the audit of the
branch or office and the auditor thereof, if any, shall be such as may be prescribed:
Provided that the auditor for a branch or office shall prepare a report on the accounts of the branch or
office, examined by such auditor and shall send it to the Corporation’s auditor, who shall deal with it in
the Corporation’s auditor’s report in such manner as the Corporation’s auditor may consider necessary.
25C. Internal auditor.—(1) The Board shall, on the recommendation of the Audit Committee,
appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other
professional as may be determined by the Board to conduct the internal audit of the functions and
activities of the Corporation.
(2) The Audit Committee shall—
(a) recommend to the Board for the appointment, remuneration and terms of appointment of the
internal auditor;
(b) in consultation with the internal auditor, formulate the scope, functioning, periodicity and
methodology for conducting the internal audit;
(c) review and monitor the internal auditor’s performance and effectiveness of audit process.
25D. Special auditor.—Notwithstanding anything contained in sections 19C, 23A, 25, 25A and 25B,
the Central Government may, at any time, appoint such auditor as it deems fit as a special auditor to
examine and report on the accounts of the Corporation, and such auditor shall have the same rights of
access to the books of account and vouchers of the Corporation and entitlement to require information and
explanation from the officers of the Corporation as an auditor of the Corporation has under section 25B.]
33
26. Actuarial valuations.—1
[The Board] shall, 2
[every year], cause an investigation to be made by
actuaries into the financial conditions of the 3
[life insurance business of the Corporation, including a
valuation of the liabilities of the Corporation in respect thereto], and submit the report of the actuaries to
the 4
[Board].
27. Annual report of activities of Corporation.—The Corporation shall, as soon as may be, after
the end of each financial year, prepare and submit to the Central Government in such form as may be
prescribed a report giving an account of its activities during the previous financial year, 5***.
6
[28. Surplus from life insurance business, how to be utilized.—(1) If as a result of any
investigation undertaken by the Board under section 26, any surplus emerges, —
(a) for every financial year previous to the financial year for which the funds referred to in subsection (2) of section 24 are to be maintained, and for any subsequent financial year for which
members may exempt the maintenance of such funds,—
(I) ninety per cent., or such higher percentage as the Board may approve, of such surplus shall
be allocated to or reserved for the life insurance policyholders of the Corporation; and
(II) such percentage of the remaining surplus as the Board may approve, shall be allocated to
or reserved for members and may either be credited to a separate account maintained by the
Corporation or be transferred to such reserve or reserves as the Board may specify;
(b) for every financial year other than that referred to in clause (a),—
(i) in respect of participating policyholders,—
(I) ninety per cent., or such higher percentage as the Board may approve, of surplus
relating to such policyholders, shall be transferred to the participating policyholders fund, and
shall be allocated to or reserved for the life insurance participating policyholders of the
Corporation; and
(II) such percentage of the remaining surplus as the Board may approve, shall be
allocated to or reserved for members and may either be credited to a separate account
maintained by the Corporation or be transferred to such reserve or reserves as the Board may
specify;
(ii) in respect of non-participating policyholders, one hundred per cent. of surplus relating to
such policyholders shall be allocated to or reserved for members and may either be credited to a
separate account maintained by the Corporation or be transferred to such reserve or reserves as the
Board may specify.
(2) The remaining surplus referred to in sub-clause (ii) of clause (a) of sub-section (1) or in item (ii)
of sub-clause (i) of clause (b) of sub-section (1), as the case may be, and the surplus referred to in subclause (ii) of clause (b) of sub-section (1), and the profits allocated to or reserved for the members under
section 28A, shall be utilised for such purposes as the Board may approve, including for the purpose of
declaration or payment of dividend, the issue of fully paid-up bonus shares to members and crediting any
of the reserves that the Board may create for any purpose.
(3) The Corporation shall, with the approval of the Board, publish on its website its surplus
distribution policy at least once in five years, or such shorter period not less than three years as the Board
may deem fit, and such policy shall specify, among other things, the percentages referred to in
sub-section (1).]
1. Subs. by Act 13 of 2021, s. 138, for “The Corporation” (w.e.f. 30-6-2021).
2. Subs. by Act 8 of 2012, s. 4, for “once at least in every two years” (w.e.f. 31-3-2012).
3. Subs. by Act 33 of 1965, s. 2, for certain words (w.e.f. 29-9-1965).
4. Subs. by 13 of 2021, s. 138, for “Central Government” (w.e.f. 30-6-2021).
5. The words “and the report shall also give an account of the activities, if any, which are likely to be undertaken by the
Corporation in the next financial year” omitted by s. 139, ibid. (w.e.f. 30-6-2021).
6. Subs. by s. 140, ibid., for section 28 (w.e.f. 30-6-2021).
34
1
[28A. Profits from any business (other than life insurance business) how to be utilised.—If for
any financial year profits accrue from any business (other than life insurance business) carried on by the
Corporation, then, after making provision for reserves and other matters for which provision is necessary
or expedient, the balance of such profits shall be 2
[allocated to or reserved for the members].]
3
[28B. Declaration of dividend.—(1) No dividend shall be declared or paid by the Corporation for
any financial year except out of the surpluses and profits referred to in sub-section (2) of section 28 (after
excluding any amount representing unrealised gains, notional gains or revaluation of assets and any
change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair
value) for such year arrived at after providing for depreciation, or for any previous financial year or years
arrived at after providing for depreciation and remaining undistributed, or out of both the aforesaid
surpluses and profits:
Provided that no dividend shall be declared or paid by the Corporation from its reserves other than
free reserves:
Provided further that no dividend shall be declared or paid by the Corporation unless any losses
carried over from previous years and any depreciation not provided for in previous years are set off
against the surpluses and profits referred to in sub-section (2) of section 28 for the financial year for
which the dividend is proposed to be declared or paid.
(2) The Board may, during any financial year or at any time during the period from the close of a
financial year till the holding of the annual general meeting for that financial year, declare interim
dividend out of the surpluses and profits referred to in sub-section (2) of section 28 of the financial year
for which such interim dividend is sought to be declared, or out of the surpluses and profits referred to in
sub-section (2) generated in the current financial year till the close of the quarter preceding the date of
declaration of such interim dividend:
Provided that in case the Corporation has incurred loss during the current financial year up to the
close of the quarter immediately preceding the date of declaration of interim dividend, such interim
dividend shall not be declared at a rate higher than the average of the dividends declared by the
Corporation during the immediately preceding three financial years.
(3) The amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in
a separate account within five days from the date of declaration of such dividend.
(4) No dividend shall be paid by the Corporation in respect of any share of the Corporation except to
the member in whose name such share is entered on the register of members referred to in section 5C, or
to his order, or to his banker, and shall be payable in cash and not in stock or other form of value:
Provided that nothing in this sub-section shall be deemed to prohibit the capitalisation of the
surpluses and profits referred to in sub-section (2) of section 28 for the purpose of issuing fully paid-up
bonus shares or paying up any amount for the time being unpaid on any share held by members:
Provided further that any dividend payable in cash may be paid by cheque or warrant or in any
electronic mode to the member entitled to such payment.
28C. Unpaid Dividend Account.—(1) Where a dividend has been declared by the Corporation but
has not been paid or claimed within thirty days from the date of declaration to any member entitled to
payment thereof, the Corporation shall, within seven days from the expiry of the said period of thirty
days, transfer the total amount of dividend which remains unpaid or unclaimed to a special account to be
opened by the Corporation in that behalf in any scheduled bank, to be called the Unpaid Dividend
Account.
(2) The Corporation shall, within a period of ninety days of making any transfer of an amount under
sub-section (1) to the Unpaid Dividend Account, prepare a statement containing the name and last known
address of, and the amount of the unpaid dividend payable to, each member entitled to such unpaid
1. Ins. by Act 33 of 1965, s. 4 (w.e.f. 29-9-1965).
2. Subs. by Act 13 of 2021, s. 141, for “paid to the Central Government” (w.e.f. 30-6-2021).
3. Ins. by s. 142, ibid. (w.e.f. 30-6-2021).
35
dividend, and shall place such statement on its website and on any other website as the Central
Government may specify.
(3) If any default is made in transferring the total amount referred to in sub-section (1) or any part
thereof to the Unpaid Dividend Account, the Corporation shall pay, from the date of such default, interest
on so much of the amount as has not been transferred to the said account, at such rate as is specified
in section 124 of the Companies Act, and the interest accruing on such amount shall ensure to the benefit
of the members in proportion to the amount remaining unpaid to them.
(4) Any person claiming to be entitled to any money transferred under sub-section (1) to the Unpaid
Dividend Account may apply to the Corporation for payment of the money claimed.
(5) The amount remaining unclaimed and unpaid for a period of seven years from the date it became
due for payment in the Unpaid Dividend Account shall be transferred to the Investor Education and
Protection Fund established under sub-section (1) of section 125 of the Companies Act and shall be
deemed to be an amount credited to the said Fund under sub-section (2) of the said section.
(6) All shares in respect of which dividend has not been paid or claimed for seven consecutive years
or more shall be transferred by the Corporation in the name of the Investor Education and Protection Fund
along with a statement containing such details as may be prescribed:
Provided that every claimant of such shares shall be entitled to claim the transfer thereof from the said
Fund in accordance with such procedure and on submission of such documents as may be prescribed.
Explanation.—For the removal of doubts, it is hereby clarified that in case any dividend is paid or
claimed for any year during the said period of seven consecutive years, the share shall not be transferred
to the Investor Education and Protection Fund.]
29. Reports to be laid before Parliament.—The Central Government shall cause the report of the
auditors under section 25, the report of the actuaries under section 26 and the report giving an account of
the activities of the Corporation under section 27 to be laid before both Houses of Parliament as soon as
may be after each such report is received by the Central Government.