Expert Advice on Ensuring Successful Recovery of Shares from IEPF

Over the years, thousands of investors in India have lost track of their shareholdings. This often happens due to common reasons like a change in address, failure to encash dividends, loss of physical share certificates, or even the death of the original shareholder. If these shares and their dividends remain unclaimed for seven consecutive years, they are transferred to the Investor Education and Protection Fund (IEPF) by the company, as per Indian law.

The good news? These shares and dividends aren’t lost forever. The recovery of shares from IEPF is possible—provided you follow the proper legal process.

This article gives expert-backed advice to ensure a smooth and successful claim, highlights the legal provisions involved, and answers common questions from investors.

What Is IEPF and Why Are Shares Transferred to It?

The Investor Education and Protection Fund Authority (IEPFA) was established under Section 125 of the Companies Act, 2013. Its main purpose is to manage unclaimed dividends, matured deposits, and shares that have remained inactive.

According to Section 124(5) of the Companies Act, if a shareholder does not claim their dividend for seven consecutive years, both the dividend and the underlying shares are transferred by the company to the IEPF.

This process is governed by the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

Who Can Apply for Recovery of Shares from IEPF?

Recovery of shares from IEPF can be initiated by:

The original shareholder

The legal heir or nominee, in case the original shareholder has passed away

A guardian in case the shareholder is a minor

In all cases, sufficient legal documentation and evidence must be provided to support the claim.

Step-by-Step Process for Recovery of Shares from IEPF

Step 1: Check If the Shares Are Transferred to IEPF

Visit the official IEPF website (www.iepf.gov.in) and search using the investor's name, company name, or folio number to check if shares/dividends are transferred to the IEPF.

Step 2: File Form IEPF-5 Online

Go to the MCA portal (www.mca.gov.in) and fill Form IEPF-5. Enter required details like:

Investor name and address

Company name and CIN

Number of shares and year of dividend

Demat account details

Bank details for dividend refund

After submitting, download the filled form and acknowledgment.

Step 3: Submit Physical Documents to Company’s Nodal Officer

Send the following documents by post or courier to the Nodal Officer of the concerned company:

Printout of Form IEPF-5 and acknowledgment

Indemnity bond (original)

Advance stamped receipt

Self-attested PAN, Aadhaar

Canceled cheque leaf

Original share certificates (if physical)

Client Master List (for demat claims)

Legal heir documents (if applicable)

Step 4: Company Verification

The company verifies the documents and sends its report to the IEPF Authority within 30 days. If found satisfactory, the IEPF Authority starts processing your refund.

Step 5: Approval and Credit of Shares/Dividend

Upon approval:

Shares are credited to your demat account

Dividend is transferred to your bank account

This process can take 60–90 days if documents are in order.

Expert Advice for a Successful IEPF Claim

- Don’t Skip the Legal Paperwork

Legal documents like affidavits, indemnity bonds, and legal heir certificates are not just formalities. They are essential for validation. Ensure these are notarized and match the MCA format.

- Keep Name and Signature Consistency

Check that the name, address, and signature on all documents match your PAN and Aadhaar. Even small mismatches can delay your claim.

- Dematerialize Physical Shares in Advance

If shares are in physical form, demat them before applying. IEPF only returns shares in electronic format.

- In Case of Deceased Shareholder, Obtain Succession Proof

For legal heirs, documents such as the death certificate, legal heir certificate, will, or succession certificate are essential.

- Follow Up with the Company Nodal Officer

After submitting your claim, proactively follow up with the Nodal Officer of the company. Companies are required to act within 30 days.

- Maintain Copies of All Submitted Documents

Keep self-attested copies of all paperwork you submit for your records. It helps if you need to refile or clarify any information.

Legal Provisions at a Glance

Provision Description

Section 124(5) Unclaimed dividends for 7 years are transferred to IEPF

Section 125(3) Investor can claim refunds of dividends and shares

IEPF Rules, 2016 Detail the process for filing, documents, and timelines

Form IEPF-5 Official form to initiate refund process

Frequently Asked Questions (FAQs)

- Can I claim shares from IEPF without original share certificates?

Yes, but you must provide a duplicate share certificate from the company or dematerialize the shares first. Consult the RTA (Registrar & Transfer Agent) for help.

- How long does it take to recover shares from IEPF?

Usually 60 to 90 working days, if all documents are accurate and no discrepancies are found.

- What if the shareholder is deceased?

A legal heir can file the claim with supporting documents such as the death certificate, succession certificate, will, or legal heir certificate.

- Is there any fee for IEPF Form 5?

No, filing Form IEPF-5 is free of charge. However, you may incur notarization or professional charges if hiring assistance.

- Can I track my IEPF refund status online?

Yes, use the SRN number generated after filing IEPF-5 to track your status on the MCA portal.

- What happens if my IEPF claim is rejected?

If rejected, you will receive a rejection notice. You can refile the claim with corrections or appeal to the IEPF Authority through proper legal channels.

Conclusion

The recovery of shares from IEPF is a well-defined legal process, but it demands careful documentation, timely action, and attention to detail. Whether you're the original investor or a legal heir, the key to a successful claim lies in being organized and proactive.