SC grants 3 more weeks to Finance Ministry to respond on plea seeking mechanism on unclaimed funds
Apr 07, 2023
New Delhi [India], April 7 : The Supreme Court has granted three weeks to the Ministry of Finance to file its response to a plea seeking directions to create a centralised database providing information about bank accounts, insurance, post office funds etc. held by deceased account holders.
A bench of Chief Justice of India DY Chandrachud and Justice JB Pardiwala posted the matter for hearing on April 28.
"While the Ministry of Corporate Affairs has filed its counter affidavit, counsel for the Union of India submits that the Ministry of Finance may be granted some time to file its counter affidavit. Counter affidavit be filed within three weeks. List the petition on April 28, 2023," the bench stated in its order on Thursday.
Last year the apex court had issued a notice to the Ministry of Finance, Reserve Bank of India, Securities & Exchange Board of India (SEBI) and others on the petition.
The plea filed by journalist Sucheta Dalal asked the court to pass a direction for the establishment of a procedure for dealing with claims of legal heirs qua bank deposits, insurance, post office funds etc., that eliminates unnecessary litigation.
The plea stated that unclaimed funds of the public that get transferred to government-owned funds like the Depositor's Education and Awareness Fund (DEAF), Investor's Education and Protection Fund (IEPF) and Senior Citizen's Welfare Fund (SCWF) on the ground that the legal heirs or nominees did not claim the same, should be made available to the legal heirs or nominees by providing information of holders of inoperative or dormant accounts on a centralised online database.
There is an urgent need to develop a centralised online database under the control of RBI that will provide information about the deceased account holder including such details as the name, address and last date of transaction by the deceased account holder, stated the plea.
"It is submitted that the Depositors' Education and Awareness Fund (DEAF) had Rs. 39,264.25 crore at the end of March 2021, up from Rs 33,114 crore on 31 March 2020 and a sharp rise from Rs 18,381 crore at the end of March 2019. Further, the amount lying with the Investor Education Protection Fund started at Rs 400 crore in 1999, and was 10 times higher at Rs 4,100 crore at the end of March 2020," the plea submitted.
The plea stated that it should be mandatory for banks to inform RBI about the inoperative or dormant bank accounts and this exercise should be repeated after an interval of 9-12 months.
