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CHAPTER VI

MISCELLANEOUS

Title to dividends 27. (1) It shall be lawful for the holder of any security whose name appears on the books of the company issuing the said security to receive and retain any dividend declared by the company in respect thereof for any year, notwithstanding that the said security has already been transferred by him for consideration, unless the transferee who claims the dividend from the transferor has lodged the security and all other documents relating to the transfer which may be required by the company with the company for being registered in his name within fifteen days of the date on which the dividend became due.

Explanation:

The period specified in this section shall be extended-

(i) in case of death of the transferee, by the actual period taken by his legal representative to establish his claim to the dividend;

(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security and other documents relating to the transfer due to causes connected with the post, by the actual period of the delay.

   (2) Nothing contained in sub- section (1) shall affect -
  1. the right of a company to pay any dividend which has become due to any person whose name is for the time being registered in the books of the company as the holder of the security in respect of which the dividend has become due; or
  2. the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the company has refused to register the transfer of the security in the name of the transferee.
Right to receive income from collective investment scheme.

27A (1) It shall be lawful for the holder of any securities, being units or other instruments issued by collective investment scheme, whose name appears on the books of the collective investment scheme issuing the said security to receive and retain any income in respect of units or other instruments issued by the collective investment scheme declared by the collective investment scheme in respect thereof for any year notwithstanding that the said security, being units or other instruments issued by collective investment scheme, has already been transferred by him for consideration, unless the transferee who claims the income in respect of units or other instruments issued by collective investment scheme from the transfer or has lodged the security and all other documents relating to the transfer which may be required by the collective investment scheme with the collective investment scheme for being registered in his name within fifteen days of the date on which the income in respect of units or other instruments issued by the collective investment scheme became due.

Explanation: -

The period specified in this section shall be extended -

(i) in case of death of the transferee, by the actual period taken by his legal representative to establish his claim to the income in respect of units or other instrument issued by collective investment scheme;

(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security, being units or other instruments issued by collective investment scheme, and other documents relating to the transfer due to causes connected with the post, by the actual period of the delay.

   (2) Nothing contained in sub-section (1) shall affect -
  1. the right of a collective investment scheme to pay any income from units or other instruments issued by collective investment scheme which has become due to any person whose name is for the time being registered in the books of the collective investment scheme as the holder of the security being units or other instruments issued by collective investment scheme in respect of which the income in respect of units or other instruments issued by collective scheme has become due; or
  2. the right of transferee of any security, being units or other instruments issued by collective investment scheme, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the company has refused to register the transfer of the security being units or other instruments issued by collective investment scheme in the name of the transferee.50
Act not to apply in certain cases 28. (1) The provisions of this Act shall not apply to- (a) the Government, the Reserve Bank of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause;

(b) any convertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose favour any of the foregoing has been issued to obtain at his option from the company or other body corporate, issuing the same or from any of its shareholders or duly appointed agents, shares of the company or other body corporate, whether by conversion of the bond or warrant or otherwise, on the basis of the price agreed upon when the same was issued.

   (2) Without prejudice to the provisions contained in sub-section (1), if the Central Government is satisfied that in the interests of trade and commerce or the economic development of the country it is necessary or expedient so to do,it may, by notification in the Official Gazette, specify any class of contracts as contracts to which this Act or any provision contained therein shall not apply, and also the conditions, limitations or restrictions, if any, subject to which it shall not so apply. Protection of action taken in good faith 29. No suit, prosecution or other legal proceeding whatsoever shall lie in any court against the governing body or any member, office bearer or servant of any recognised stock exchange or against any person or persons appointed under sub-section (1) of section 11 for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye-laws made thereunder. Power to delegate 29A. The Central Government may, by order published in the Official Gazette, direct that the powers (except the power under section 30) exercisable by such conditions, if any, as may be specified in the order, be exercisable also by the Securities and Exchange Board of India or the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934.51 Power to make rules 30. (1) The Central Government may, by notification in the Official Gazette, make rules for the purpose of carrying into effect the objects of this Act.

   (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for,

 
(a) the manner in which applications may be made, the particulars which they should contain and the levy of a fee in respect of such applications;

(b) the manner in which any inquiry for the purpose of recognizing any stock exchange may be made, the conditions which may be imposed for the grant of such recognition, including conditions as to the admission of members if the stock exchange concerned is to be the only recognised stock exchange in the area; and the form in which such recognition shall be granted;

(c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central Government;

(d) the documents which should be maintained and preserved under section 6 and the periods for which they should be preserved;

(e) the manner in which any inquiry by the governing body of a stock exchange shall be made under section 6;

(f) the manner in which the bye-laws to be made or amended under this Act shall before being so made or amended be published for criticism;
(g) the manner in which applications may be made by dealers in securities for licences under section 17, the fee payable in respect thereof and the period of such licences, the conditions subject to which licences may be granted, including conditions relating to the forms which may be used in making contracts, the documents to be maintained by licensed dealers and the furnishing of periodical information to such authority as may be specified and the revocation of licences for breach of conditions;

(h) the requirements which shall be complied with -
  (A) by public companies for the purpose of getting their securities listed on any stock exchange;
(B) by collective investment scheme for the purpose of getting their units listed on any stock exchange".52


(ha) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 22A and the fees payable in respect of such appeal.53

(i) any other matter which is to be or may be prescribed.

(3) Any rules made under this section [***]54 shall, as soon as may be, after their publication in the Official Gazette, be laid before both Houses of Parliament. Repeal 31. Repealed by the Repealing and Amending Act, 1960 (58 of 1960), section 2 and Schedule 1.


50 supra n. 3
51 Substituted by Securities Laws (Second Amendment) Act, 1999 vide Gazette Notification dated December 16, 1999 for "The Central Government may, by order published in the Official Gazette, direct that the powers exercisable by it under any provision of this Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the order, be exercisable also by the Securities and Exchange Board of India]" which was inserted by Securities and Exchange Board of India Act, 1992, w.e.f. 30.1.92
52 Substituted by Securities Laws (Second Amendment) Act, 1999 vide Gazette Notification dated December 16, 1999 for "the requirements which shall be complied with by public companies for the purpose of getting their securities listed on any stock exchange; [***]
53 Substituted by Securities Laws ( Second Amendment ) Act, 1999 vide Gazette Notification dated December 16, 1999 for
[(ha) the form in which a notice referred to in sub-clause (b) of sub-section (4) of section 22A shall be the particulars which such notice shall contain, the form in which a reference under clause (c) of the said sub-section (4) shall be the particulars which such reference shall contain, and the evidence and the fees which shall accompany such reference; and] which was inserted by Securities Contracts (Regulation) Amendment Act,1985
54 The words "shall be subject to the condition of previous publication and" deleted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-3-1995.