19. Regulation of export and transfer of securities.
Notwithstanding anything contained in section 81 of the Companies Act, 1956 , (1 of 1956 .) no person shall, except with the general or special permission of the Reserve Bank,-
take or send any security to any place outside India
transfer any security, or create or transfer any interest in a security, to or in favour of a person resident outside India; 2[
issue, whether in India or elsewhere, any security which is registered or to be registered in India, to a person resident outside India;
acquire, hold or dispose of any foreign security.
Where the holder of a security is a nominee, neither he nor any person through whose agency the exercise of all. or any of the holder' s rights in respect of the security is controlled shall, except with the general or special permission of the Reserve Bank, do any act, whereby he recognises or gives effect to the substitution of another person as the person from whom he directly receives instructions, unless both the person previously instructing and the person substitued for that person were, immediately before the substitution, resident in India.
The Reserve Bank may for the purpose of securing that the provisions of this section are not evaded, require that the person transferring any security and the person to whom such security is transferred
shall subscribe to a declaration that the transferee is not resident outside India.
Notwithstanding anything contained in any other law, no person shall, except with the permission of the Reserve Bank,-
enter any transfer of securities in any register or book in which securities are registered or inscribed if he has any ground for suspecting that the transfer involves any contravention of the provisions of this section, or
enter in any such register or book, in respect of any security, whether in connection with the issue or transfer of the security or otherwise, an address outside India except by way of substitution for any such address in the same country or for the purpose of any transaction for which permission has been granted under this section with knowledge that it involves entry of the said address, or 1[
Notwithstanding anything contained in any other law, no transfer of any share, bond or debenture of a company registered in India made by a person resident outside India or by a national of a foreign State to another person resident in India shall be valid unless such transfer is confirmed by the Reserve Bank on an application made to it in this behalf by the transferor or the transferee.
If the Reserve Bank is of opinion that it is necessary or expedient in the public interest so to do, it may, by general or special permission, exempt any transfer referred to in sub- section (5) or any class of such transfers from the operation of the provisions of that sub- section, subject to such conditions, if any, as may be specified in such permission.
For the purposes of this section,-
" holder", in relation to a bearer security, means the person having physical custody of the security; provided that, where a bearer security is deposited with any person in a locked or sealed receptacle from which the person with whom it is deposited is not entitled to remove it without the authority of some other person, that other person shall be deemed to be the holder of the security;
" nominee" means a holder of any security (including a bearer security) or any coupon representing dividends or interest who, as respects the exercise of any rights in respect of the security or coupon, is not entitled to exercise those rights
except in accordance with the instructions given by some other person, and a person holding a security or coupon as a nominee shall be deemed to act as nominee for the person who is entitled to give instructions either directly or through the agency of one or more persons, as to the exercise by the holder of the security or coupon of any rights in respect thereof and is not, in so doing, himself under a duty to comply with instructions given by some other person. 1[