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CS Executive · Capital Market and Securities Laws · Listing Obligations and Disclosure Requirements

Kaveri Infra Ltd, a listed company, applied for listing of its securities of the kind covered by section 17A of the SCRA (securities of a special purpose distinct entity). The exchange refused permission for listing. The issuer had received application money. It repaid the money only on the twelfth day after becoming liable, ignoring holidays. What follows under section 17A?

Under section 17A(3) of the SCRA, if money is not repaid within eight days after listing permission is refused, the issuer and every director or trustee in default are jointly and severally liable to repay it with interest at fifteen per cent per annum from the eighth day's expiry.

  1. AThe issuer and every director or trustee in default are jointly and severally liable to repay with interest at fifteen per cent per annum from the expiry of the eighth dayCorrect
  2. BOnly the issuer is liable, with interest at twelve per cent from the first day
  3. CNo interest is payable if the money is eventually repaid
  4. DLiability arises only after thirty days

Explanation

Under section 17A(3), if permission is refused, the issuer must forthwith repay the money. If it is not repaid within eight days, the issuer and every director or trustee in default become jointly and severally liable to repay with interest at fifteen per cent per annum from the expiry of the eighth day. Late repayment on day twelve does not remove that liability.

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