Section 3C in State Bank of India General Regulations, 1955
3C. Manner of accepting money for issued capital, forfeiture and reissue of shares.
(1)The Central Board or its Executive Committee may, from time to time, make such calls as it thinks fit upon the shareholders in respect of all monies remaining unpaid on the shares held by them whether on account of nominal value of shares or by way of premium, which are by the conditions of allotment not made payable at fixed times, by giving not less than fourteen days notice for payment thereof and each shareholder shall pay the amount of every call so made on him at the time and place appointed by the Central Board or its Executive Committee or on such subsequent date as may be fixed by the Central Board or its Executive Committee. A call may be made payable by instalments and shall date back to the time when the resolution of the Central Board or its Executive Committee authorising such call was passed:Provided that before the time fixed for payment of such call the Central Board or its Executive Committee may by notice in writing to the shareholder extend the time fixed for the payment or revoke the notice of call.(2)If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof, the holder for the time being or allottee of the share in respect of which a call has been made or the instalment is due, shall pay interest on such sum at such rate as the Central Board or its Executive Committee may fix from time to time, from the day appointed for the payment thereof to the time of actual payment, but the Central Board or its Executive Committee may for reasons to be recorded in writing, waive wholly or in part, payment of such interest.(3)(a)If any shareholder fails to pay the whole or any part of any call or instalment or any money due in respect of any shares either by way of principal or interest up to the day appointed for the payment thereof, the State Bank may at any time thereafter, if the call or instalment or any part thereof or other monies remain unpaid in whole or in part, serve a notice of forfeiture on such shareholder or on the person (if any) entitled to the share by transmission, requiring him to pay such call or instalment or such part thereof or other monies which remain unpaid together with any interest that may have accrued due.(b)A notice of forfeiture shall state a date not being less than fourteen days from the date of notice and the time and place at which such call or instalment or interest remaining unpaid are to be paid and in the event of non-payment of the amount due upto the date fixed for payment, the share or shares in respect of which the call was made and the amount was due, shall be liable to be forfeited.(4)If the shareholder or any other person on whom a notice of forfeiture has been served fails to comply with the same, the shares in respect of which the notice of forfeiture was given, may at any time after the date fixed for payment may be forfeited by a resolution of the Central Board or its Executive Committee and such forfeiture shall include all unpaid dividends in respect of the forfeited shares.(5)Any share so forfeited shall be deemed to be the property of the State Bank and may be sold, re-allotted or otherwise disposed of to any person upon such terms and in such manner as the Central Board or its Executive Committee may decide.(6)The State Bank may receive the consideration, if any, given for the share on any sale, re-allotment or other disposition thereof and the person to whom such share is sold, re-allotted or disposed of may be registered as the holder of the share and shall not be bound to see to the application of the consideration, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale, re-allotment or other disposal of the share and the remedy of any person aggrieved by the sale shall be in damages only and against the State Bank exclusively.(7)The Central Board or its Executive Committee may, at any time, before any share so forfeited under sub-regulation (4), have been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as it may think fit.(8)Any shareholder whose shares have been forfeited shall, notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the State Bank all calls, instalments, expenses and other monies owing upon or in respect of such shares at the time of forfeiture with interest thereon from the time of forfeiture until payment at such rate as may be specified by the Central Board or its Executive Committee and the Central Board or its Executive Committee may enforce the payment of the whole or a portion thereof.(9)Neither a judgment nor a decree in favour of the State Bank for calls or other monies due in respect of any shares nor any payment or satisfaction thereunder nor the receipt by the State Bank of a portion of any money which shall be due from any shareholder from time to time in respect of any shares either by way of principal or interest nor any indulgence granted by the State Bank in respect of payment of any money shall preclude the forfeiture of such shares under these regulations.(10)A certificate in writing signed by the person duly authorised by the State Bank, that the forfeiture of the share was made by a resolution of the Central Board or its Executive Committee to that effect, shall be conclusive evidence of the fact stated therein as against all persons entitled to such shares.(11)When any share has been forfeited under sub-regulation (4), an entry of the forfeiture with the date thereof shall be made in the register.(12)The forfeiture of a share shall extinct, at the time of the forfeiture, all interest in and all claims and demands against the State Bank, in respect of the share and all other rights incidental to the share, except only such of those rights expressly waived by these regulations.(13)Upon any sale, re-issue, re-allotment or other disposal of forfeited shares in accordance with the sub-regulations, certificate(s) originally issued in respect of the relative shares shall (unless the same shall on demand by the State Bank have been previously surrendered to it by the defaulting shareholder) stand cancelled and become null and void and be of no effect.(14)The Central Board or its Executive Committee shall be entitled to issue a new certificate or certificates in respect of the said shares to the person or persons entitled thereto.(15)The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.(16)Subject to other provisions of these regulations, no shareholder shall be entitled to receive any dividend or to exercise any right of a shareholder until he has paid all calls for the time being due and payable on every share held by him, whether singly or jointly with any person, together with interest and expenses, as may be levied or charged.(17)If by the terms of issue of any share or otherwise any amount is payable at any fixed time or by instalments at fixed times, every such amount or instalment shall be payable as if it were a call duly made by the Central Board or its Executive Committee and of which due notice had been given and all the provisions herein contained in respect of the calls shall relate to such amount or instalment accordingly.(18)(a)The State Bank shall have a first and paramount lien, -(i)on every share (not being a fully-paid share), for all monies (whether payable or not) called, or payable at a fixed time, in respect of that share;(ii)on all shares (not being fully-paid shares), standing registered in the name of a single person, for all monies payable by him or his estate to the State Bank;(iii)upon all the shares (not being fully-paid shares) registered in the name of each person (whether solely or jointly with others) and upon the proceeds of sale thereof for his debts, liabilities, and engagements, solely or jointly with any other person to the State Bank, whether the period for the payment, fulfilment, or discharge thereof shall have actually arrived or not and no equitable interest in any share shall be recognised by the State Bank over its lien:Provided that the Central Board or its Executive Committee may at any time declare any share to be wholly or in part exempt from provisions of this clause, (b) The State Bank's lien, if any, on a share shall extend to all dividends payable thereon.(19)(a)The State Bank may sell, in such manner as the Central Board or its Executive Committee thinks fit, any shares on which the State Bank has a lien, -(i)if a sum in respect of which the lien exists is payable; and(ii)after the expiration of fourteen days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is payable, has been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death or insolvency.(b)To give effect to any sale as above, the Central Board or its Executive Committee may authorise any officer to transfer the shares sold to the purchaser thereof.(20)The net proceeds of any sale of shares under sub-regulation (19) after deduction of costs of such sale, shall be applied in or towards the satisfaction of the debt or liability in respect whereof the lien was enforced so far as the same is payable and the residue, if any, be paid to the shareholders or the person, if any, entitled by transmission of the shares so sold.(21)(a)The State Bank may serve a notice or a document on any shareholder either personally, or by ordinary post at his registered address or if he has no registered address in India, at the address, if any, within India supplied by him to the State Bank.(b)Where a document or a notice is sent by post, the service of such document or notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document or notice:Provided that where a shareholder has intimated to the State Bank in advance that documents should be sent to him by registered post, with or without acknowledgement due or by courier service or in an electronic mode and has deposited with the State Bank a sum sufficient to defray the expenses of doing so, service of the document or notice shall not be deemed to be effected unless it is sent in the manner intimated by the shareholder:Provided further that any notice sent by post shall be deemed to have been served on the third day following that on which the envelope or wrapper containing the same is posted, and in proof of which service it shall be sufficient to prove that the envelop or wrapper containing the notice was properly addressed, pre-paid and put into post office, and a certificate in writing signed by an employee of the State Bank that the envelope or wrapper containing the notice was properly addressed, pre-paid and posted shall be conclusive evidence thereof and in any other case, at the time at which the letter would have been delivered in the ordinary course.(c)A notice or a document advertised in a newspaper having wide circulation in India shall be deemed to be duly served on the day on which the advertisement appears on every shareholder of the State Bank who has no registered address in India and has not supplied to the State Bank an address within India for giving of notice to him;(d)A notice or document may be served by the State Bank on the joint holder of a share by effecting service on the joint holder named first in the register in respect of the share and notice so given shall be sufficient notice to all the holders of the said shares;(e)A notice or a document may be served by the State Bank on the persons entitled to a share upon death or in consequence of the insolvency of a shareholder by sending it through post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons, claiming to be so entitled, or until such an address has been so supplied, by serving the document in any manner in which it might have been served if the death or insolvency had not occurred;(f)The signature to any notice to be given by the State Bank may be written or printed.]
