Refunds arising from share-capital reduction do not fall within Section 125(2)(h)’s IEPF transfer requirement.

The petitioner’s refund liability to former shareholders arose from a reduction of share capital approved by the High Court in 2016.

In 2022, the Court directed the petitioner to re-submit a list of beneficiaries so the Bank could issue fresh refund warrants, with any remaining escrow balance to be transferred to a separate account and used only to meet the shareholder liability.

In 2026, the Court modified that direction to require the amount corresponding to the refund warrants also to be kept in that account.

The Bank sought review of the 2026 order, arguing that the amount had remained in the escrow account for seven years and was required to be transferred to the Investor Education and Protection Fund (IEPF) under Section 125(2)(h) of the Companies Act, 2013.

The petitioner opposed review, contending that the provision concerns application money for securities, not refunds resulting from a reduction of capital.

Whether the refund amount arising from the reduction of the petitioner’s share capital falls within Section 125(2)(h) of the Companies Act, 2013 and must therefore be transferred to the IEPF after seven years.

Whether the 2 February 2026 order disclosed an error apparent on the face of the record warranting review under Order XLVII Rule 1 read with Section 114 CPC.

Order XLVII Rule 1 read with Section 114 of the Code of Civil Procedure, 1908 permits review on limited grounds, including an error apparent on the face of the record.

Section 125(2)(h) of the Companies Act, 2013 covers application money received by companies for allotment of securities that is due for refund; under the proviso, such amounts form part of the IEPF only if they remain unclaimed and unpaid for seven years from the date they became due.

The Court cited no precedent.

The Court held that Section 125(2)(h) addresses application money paid for allotment of securities, whereas the amount at issue arose from a court-approved reduction of the petitioner’s share capital.

The Bank did not demonstrate how that capital-reduction refund fell within the statutory provision.

The Court also noted that its 2022 directions and the 2026 modification had been made after considering the record and the parties’ submissions; accordingly, the Bank established no error apparent warranting review.

The review petition was dismissed.