Companies Act, 1956
Sec 153B - Declaration as to shares and debentures held in trust.
(1) Notwithstanding anything contained in section 153, where any shares in, or debentures of, a company are held in trust by any person (hereinafter referred to as the trustee), the trustee shall, within such time and in such form as may be prescribed, make a declaration to the public trustee.
(2) A copy of the declaration made under sub-section (1) shall be sent by the trustee to the company concerned, within twenty-one days, after the declaration has been sent to the public trustee.
(a) If a trustee fails to make a declaration as required by this section, he shall be punishable with fine which may extend to five thousand rupees and in the case of a continuing failure, with a further fine which may extend to one hundred rupees for every day during which the failure continues.
(b) If a trustee makes in a declaration aforesaid any statement which is false and which he knows or believes to be false or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to two years and also with fine.
(4) The provisions of this section and section 187B shall not apply in relation to a trust
(a) where the trust is not created by instrument in writing ; or
(b) even if the trust is created by instrument in writing, where the value of the shares in, or debentures of, a company, held in trust
(i) does not exceed one lakh of rupees, or
(ii) exceeds one lakh of rupees but does not exceed either five lakhs of rupees or twenty-five per cent of the paid-up share capital of the company, whichever is less, or
(c) where the trust is created, to set up a Mutual Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India established under sub-section (1) of section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
Explanation: The expression " the value of the shares in, or debentures of, a company " in clause (b) means,
(i) in the case of shares or debentures acquired by way of allotment or transfer for consideration, the cost of acquisition thereof, and
(ii) in any other case, the paid-up value of the shares or debentures.
The provisions of this section shall not apply on and after the commencement of the Companies (Amendment) Act, 2000.