Section 127 Punishment for failure to distribute dividends.

CHAPTER VIII
DECLARATION AND PAYMENT OF DIVIDEND

[Section 127 is brought to force with effect from September 12, 2013.]
Punishment for failure to distribute dividends.

Section 127. 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 which may extend to two years and with fine which shall not be less than one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent. per annum 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.

%d bloggers like this:

Disclaimer

 

Chamber of Prakash K. Pandya

Advocate, Mediator and Insolvency Professional

The Bar Council of India does not permit advertisement or solicitation by advocates in any form or manner. By accessing this website, http://www.pkpandya.com, you acknowledge and confirm that you are seeking information relating to/from Chamber of Prakash K. Pandya of your own accord and that there has been no form of solicitation, advertisement or inducement by Chamber of Prakash K. Pandya or its members and associates. The content of this website is for informational purposes only and should not be interpreted as soliciting or advertisement.

The visit to this website implies your willing consent, acceptance and agreement to our terms of services including our privacy policy and cookie policy.