9911796707
TMI Blog2002 (6) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited Company engaged in manufacture of life saving drugs. The first petitioner-company for the year 1996-97 at its annual general body meeting held on 16-7-1997 passed a resolution accepting the recommendation of the board of directors to pay dividend of 30 per cent of its shareholders.The aggregate dividend amount declared is Rs. 1.38 crores. Thereupon, the first petitioner-company opened an account with State Bank of India, main branch, bearing No. 25/59528 under the caption Krebs Bio Chemicals Limited dividend 1996-97 A/c . It is averred in the petition that the account opened by the company is dual account for payment of dividend and also for keeping the unpaid/unclaimed dividend. The dividend amount of Rs. 1.38 crores was depo-site ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unpaid. It is also contended that since the company has paid the dividend to the shareholders by depositing the same into the bank and despatching the warrants within the stipulated time of 42 days, it has not violated any provisions of section 205A(1). It is also further contended that complaint is barred by limitation, as it is not filed within six months from the date of detection of the offence. 5. Admitting to the same sub-section (1) of section 205A of the Act reads as follows : Unpaid dividend to be transferred to special dividend account. "Where, after the commencement of the Companies (Amendment) Act, 1974, a dividend has been declared by a company but has not been paid, (or claimed) within forty-two days from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dividend warrant and it cannot be penalized for non-encashment. 8. There is much force in the aforesaid contention of the learned counsel for the petitioners. It is observed by the Supreme Court in a decision reported in Hanuman Prasad Gupta v. Hiralal AIR 1971 SC 206 that once a dividend warrant is posted to the registered address of the shareholder, dividend is deemed to have been paid within meaning of section 205A. It is further observed that the section makes the failure to post within the prescribed period and not the non-receipt of the warrant by the shareholder an offence. Payment in cash or the posting of a cheque or a warrant are equivalent and the obligation to pay is discharged when either of them is done. 9. Kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 22, 1985, after permission was obtained from the Reserve Bank of India. The complaint filed after this date, on June 27, 1985, was not justified and deserved to be quashed". 11. A close scrutiny of the aforesaid section reveals if a company fails to pay the dividend in the modes provided, penal section has been incorporated in the section 205A(8). In the present case, the company has already deposited the unpaid dividend amount into the special dividend account. Unless the petitioners have got knowledge about the non-encashment, the question of transferring to unpaid dividend account will not arise. The complaint taken as a whole does not constitute an offence under section 205A(8). 12. Coming to the aspect of the limitation, se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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