SECTION 352. COMPANY LIQUIDATION DIVIDEND AND
UNDISTRIBUTED ASSETS ACCOUNT
[Effective from 15th December, 2016]
(1) Where any company is being wound up and the liquidator has in his hands or under his control any money representing—
(a) dividends payable to any creditor but which had remained unpaid for six months after the date on which they were declared; or
(b) assets refundable to any contributory which have remained undistributed for six months after the date on which they become refundable,
the liquidator shall forthwith deposit the said money into a separate special account to be known as the Company Liquidation Dividend and Undistributed Assets Account maintained in a scheduled bank.
(2) The liquidator shall, on the dissolution of the company, pay into the Company Liquidation Dividend and Undistributed Assets Account any money representing unpaid dividends or undistributed assets in his hands at the date of dissolution.
(3) The liquidator shall, when making any payment referred to in sub-sections (1) and (2), furnish to the Registrar, a statement in the prescribed form, setting forth, in respect of all sums included in such payment, the nature of the sums, the names and last known addresses of the persons entitled to participate therein, the amount to which each is entitled and the nature of his claim thereto, and such other particulars as may be prescribed.
(4) The liquidator shall be entitled to a receipt from the scheduled bank for any money paid to it under sub-sections (1) and (2), and such receipt shall be an effectual discharge of the Company Liquidator in respect thereof.
(5) Where a company is being wound up voluntarily, the Company Liquidator shall, when filing a statement in pursuance of sub-section (1) of section 348, indicate the sum of money which is payable under sub-sections (1) and (2) of this section during the six months preceding the date on which the said statement is prepared, and shall, within fourteen days of the date of filing the said statement, pay that sum into the Company Liquidation Dividend and Undistributed Assets Account.
(6) Any person claiming to be entitled to any money paid into the Company Liquidation Dividend and Undistributed Assets Account, whether paid in pursuance of this section or under the provisions of any previous company law may apply to the Registrar for payment thereof, and the Registrar, if satisfied that the person claiming is entitled, may make the payment to that person of the sum due:
Provided that the Registrar shall settle the claim of such person within a period of sixty days from the date of receipt of such claim, failing which the Registrar shall make a report to the Regional Director giving reasons of such failure.
(7) Any money paid into the Company Liquidation Dividend and Undistributed Assets Account in pursuance of this section, which remains unclaimed thereafter for a period of fifteen years, shall be transferred to the general revenue account of the Central Government, but a claim to any money so transferred may be preferred under sub-section (6) and shall be dealt with as if such transfer had not been made and the order, if any, for payment on the claim will be treated as an order for refund of revenue.
(8) Any liquidator retaining any money which should have been paid by him into the Company Liquidation Dividend and Undistributed Assets Account under this section shall—
(a) pay interest on the amount so retained at the rate of twelve per cent per annum and also pay such penalty as may be determined by the Registrar:
Provided that the Central Government may in any proper case remit either in part or in whole the amount of interest which the liquidator is required to pay under this clause;
(b) be liable to pay any expenses occasioned by reason of his default; and
(c) where the winding up is by the Tribunal, also be liable to have all or such part of his remuneration, as the Tribunal may consider just and proper, to be disallowed, and to be removed from his office by the Tribunal.
Applicable Rules
Companies (Winding Up) Rules, 2020
[Effective from 1st April, 2020]
DIVIDENDS AND RETURNS OF CAPITAL IN WINDING UP BY TRIBUNAL
Rule 168. Declaration of dividend or return of capital.—No dividend to creditors or return of capital to contributories shall be declared by the Company Liquidator without the sanction of the Tribunal.
Rule 169. Notice of declaration.—The Company Liquidator shall give notice of the declaration of dividend not less than fifteen days prior to the date fixed for the payment thereof and unless otherwise directed by the Tribunal, such notice shall be given by advertisement in such newspapers as the Tribunalshall direct and by sending by registered or speed post and electronic mode if any, a notice to every person whose name appears in the list of creditors as on such date and the advertisement shall be in Form WIN 89 and the notice to creditor in Form WIN 90.
Rule 170. Form of authority to pay dividend.—A person to whom dividend is payable may lodge with the Company Liquidator an authority in writing to pay such dividend to another person named therein and such authority shall be in Form WIN 91.
Rule 171. Transmission of dividends, etc. by post.—Dividends and returns of capital may, at the request and risk and cost of the person to whom they are payable, be transmitted to him by money order, or to his bank account through electronic means as may be appropriate.
Rule 172. Form of order directing return of capital.—Every order by which the Company Liquidator is authorised to make a return to contributories of the company, shall, unless the Tribunal otherwise directs, contain or have appended thereto a schedule or list (which the Company Liquidator shall prepare) setting out in a tabular form the full names and addresses of the persons to whom the return is to be paid, and the amount of money payable to each person, and particulars of the transfers of shares (if any) which have been made or the variations in the list of contributories which have arisen since the date of the settlement of the list and such other information as may be necessary to enable the return to be made and the schedule or list shall be in Form WIN 92 with such variations as circumstances shall require and the Company Liquidator shall send a notice of return to each contributory by registered or speed post and electronic mode if any in Form WIN 93.
Rule 173. Payment of dividend or return of capital due to deceased creditor or contributory.— Where a claim made in respect of a dividend due to a deceased creditor or a return of capital due to a deceased contributory is one lakh rupees or less, the Company Liquidator may, upon satisfying himself as to the claimant’s right and title to receive the dividend or the return, as the case may be, apply to the Tribunal for sanctioning the payment of such dividend or return to the claimant without the production of a succession certificate or like authority, however, in respect of the claim mentioned above, pertaining to a deceased creditor or contributory where the claim amount is one lakh rupees or less, in lieu of succession certificate, the claimant shall produce Family Member Certificate issued by competent authority in the State Government or Union territory, as the case may be, and where the Tribunal sanctions the payment, the Company Liquidator shall make the payment upon obtaining a personal indemnity as well as an affidavit duly stamped from the payee.
PAYMENT OF UNCLAIMED DIVIDENDS OR UNDISTRIBUTED ASSETS INTO THE COMPANY LIQUIDATION DIVIDEND AND UNDISTRIBUTED ASSETS ACCOUNT
IN A WINDING UP
Rule 179. Statement to accompany payment.—(1) The statement to be furnished, under section sub-section (3) of 352 to the Registrar of Companies, by the liquidator when making any payment of unclaimed dividends or undistributed assets into the Company Liquidation Dividend and Undistributed Assets Account in a scheduled bank under sub-sections (1) and (2) of the said section, shall be in Form WIN 94.
(2) The liquidator shall, whenever called upon by the Registrar of Companies so to do , certify whether a person claiming payment from the Company Liquidation Dividend and Undistributed Assets Account under subsection (7) of section 352 is or is not entitled to the whole or any part of the amount claimed.
Rule 180. Unclaimed dividends or undistributed assets under investment.—For purposes of payment of unclaimed dividends and undistributed assets into the Company Liquidation Dividend and Undistributed Assets Account, money invested or deposited at interest by the liquidator shall be deemed to be money in his hand, and when such money forms part of the unclaimed dividends or undistributed assets of the company, the liquidator shall realise the investment or withdraw the deposit and shall pay the proceeds into the Company Liquidation Dividend and Undistributed Assets Account
Rule 181. Application by person for payment of money paid into the Company Liquidation Dividend and Undistributed Assets Account.—An application under sub-section (6) of section 352 by any person claiming to be entitled to any money paid into the Company Liquidation Dividend and Undistributed Assets Account for payment of such money shall state whether the applicant had made an application to the Central Government for the payment, and, if so, the result of the application.
Rule 182. Cost and expenses payable out of the assets in a winding up by Tribunal.—(1) The assets of a company in a winding up by the Tribunal remaining after payment of the fees and expenses properly incurred in preserving, realising or getting in the assets shall, subject to any order of the Tribunal and to the rights of secured creditors if any, be liable to the following payments which shall be made in the following order of priority, namely:-
First- the taxed costs of the petition including the taxed costs of any person appearing on the petition, whose costs are allowed by the Tribunal;
Next-the costs and expenses of any person who makes, or concurs in making, the company’s statement of affairs;
Next-the necessary disbursements of the Company Liquidator other than expenses properly incurred in preserving, realising or getting in the properties of the company;
Next-the cost of any person properly employed by the Company Liquidators;
Next-the cost, charges and expenses incurred by the liquidator;
Next-the actual out of pocket expenses necessarily incurred by the members of the advisory committee, and sanctioned by the Tribunal.
(2) Save as otherwise ordered by the Tribunal, no payments in respect of bills of authorised representatives, shall be allowed out of the assets of the company without proof that the same have been considered and allowed by the taxing officer of the Tribunal and the taxing officer shall before passing the bills or charges of an authorised representative, satisfy himself that the appointment of an authorised representative to assist the liquidator in the performance of his duties has been duly sanctioned.
(3) Nothing contained in this rule shall apply to or affect costs which, in the course of legal proceedings by or against the company which is being wound up by the Tribunal, are ordered by the Tribunal in which such proceedings are pending, to be paid by the company or the liquidator, or the rights of the person to whom such costs are payable.
Hi corporatelawreporter.com administrator, Great content!