Right
to Dividend, Rights Shares and Bonus Shares to be Held in Abeyance Pending
Registration of Transfer of Shares
Where any instrument
of transfer of shares has been delivered to any company for registration and
the transfer of such shares has not been registered by the company, it shall,
notwithstanding anything contained in any other provision of this Act—
(a) transfer
the dividend in relation to such shares to the Unpaid Dividend Account referred
to in section 124 unless
the company is authorised by the registered holder of such shares in writing to
pay such dividend to the transferee specified in such instrument of transfer;
and
(b) keep in
abeyance in relation to such shares, any offer of rights shares under clause (a)
of sub-section (1) of section 62 and
any issue of fully paid-up bonus shares in pursuance of first proviso to
sub-section (5) of section 123.
Punishment for Failure to Distribute
Dividends.
Where a dividend has been
declared by a company but has not been paid or the warrant in respect thereof
has not been posted within thirty days from the date of declaration to any
shareholder entitled to the payment of the dividend, every director of the
company shall, if he is knowingly a party to the default, be punishable with
Imprisonment<= two years and
fine >= 1000/- for every day
during which such default continues and
company shall be liable to pay simple
interest @18% P.A during the period for which such default continues:
Provided that no offence under this section shall be deemed to have been
committed—
(a) where the dividend could
not be paid by reason of the operation of any law;
(b) where a shareholder has
given directions to the company regarding the payment of the dividend and those
directions cannot be complied with and the same has been communicated to him;
(c) where there is a dispute
regarding the right to receive the dividend;
(d) where the dividend has
been lawfully adjusted by the company against any sum due to it from the
shareholder; or
(e) where, for any other
reason, the failure to pay the dividend or to post the warrant within the
period under this section was not due to any default on the part of the
company.
DISCLAIMER: THE ARTICLE IS BASED ON
THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE
PREPARATION. IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT
FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.
THE AUTHOR – CS DEEPAK
SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN BE REACHED
AT CONTACTHHPRO@GMAIL.COM OR 9910248911.
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