Old rules , which are still prevalent , prescribe a whole lot of time consuming and costly compliances like lodging FIR , placing advertisements in newspapers , indemnity bonds etc etc.
These old rules do not have much relevance in the present times and only add up to stress and expenditure.
1 ) Earlier share certificates could have been lost / misplaced along with valid transfer deeds. That meant a genuine loss to the legal holder of such share certificates in case the seller / transferor got , may be with dishonest intentions , new share certificates issued .Transfer deeds used to be valid for minimum two months or the till the next Book Closing . Also , transfer deeds were , a sort of , indefinitely valid as out dated Transfer Deeds could , always be got re validated by applying to the Registrar of Companies .
Now , Transfer Deeds have been abolished leading to a completely changed scenario vis a vis Physical Share Certificates .
Physical Shares , now , have very limited purposes i.e. they can be Dematerialised. , Also , physical share certificates can be used for in case of Death of the Holder i.e. Transmission of shares.
So , in present times , if share certificates are lost there only Two parties involved . The Share holder and the Company . There is , absolutely , no Third Party whose interest may be at a risk of compromise if duplicate share certificates are issued .
So, there is no need , now , for cumbersome requirements like FIR , Newspaper advertisements , Indemnity Bond etc.
A simple letter / Undertaking to the Company should be sufficient for Issue of Duplicate Share Certificates.
2 ) These days Physical Share certificates are held , mainly , by senior citizens and why subject old people to unnecessary harassment.
3 ) Missing Share Certificates lead to their remaining in Non Demat mode . This creates difficulties in case of Rights Issue / Buyback by the Company.
4 ) Further , as Dividends of such Physical shares is , generally , taken by investors in Physical Mode there are chances that , in case , Dividends remain unencashed for 7 years such shares are , for all practical , purposes , confiscated by the Govt.
SUGGESTIONS FOR HOLDERS OF MISSING SHARE CERTIFICATES
1 ) Please make Nominations - on Form 2 B. This way the heirs can , always , claim those shares with less procedures.
We do not have to send our Share Certificates ( which may be missing ) along with our Nomination Forms.
2 ) Get your Bank Details recorded with the Company so that our Dividends do not remain unpaid and are not put to , de facto ,confiscation.
Present Cumbersome Procedures , please click ;-