Section 352: Company Liquidation Dividend and Undistributed Assets Account
This section is for the management of unpaid dividends and undistributed assets during company liquidation, requiring liquidators to deposit such funds into a special account and providing a process for claimants to recover their entitlements.
The section, clause by clause
What the section says
In plain terms
(1)Where any company is being wound up and the liquidator has in his hands or under his control any money representing—
When a company is being wound up, the liquidator must deposit any unpaid dividends or undistributed assets that have been in their hands for six months into a special account called the Company Liquidation Dividend and Undistributed Assets Account at a scheduled bank.
(1)(a)dividends payable to any creditor but which had remained unpaid for six months after the date on which they were declared; or
(1)(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.
On the dissolution of the company, the liquidator must pay any remaining unpaid dividends or undistributed assets into the Company Liquidation Dividend and Undistributed Assets Account.
(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.
The liquidator must provide the Registrar with a statement detailing the nature of the sums, the names and addresses of the persons entitled, and other prescribed particulars when making payments into the account.
(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.
The liquidator is entitled to a receipt from the bank for payments made, which serves as a discharge for the liquidator.
(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.
When a company is being wound up voluntarily, the liquidator must indicate the sum of money payable under this section in the preceding six months and pay that sum into the account within fourteen days.
(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:
Anyone claiming to be entitled to money in the account can apply to the Registrar, who may make the payment if satisfied with the claim, and must settle the claim within sixty days.
provisoProvided 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.
Any unclaimed money in the account for fifteen years will be transferred to the Central Government's general revenue account, but claims can still be made and dealt with as if the transfer had not occurred.
(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 liquidator who fails to pay money into the account must pay interest at twelve per cent per annum, a penalty, and any expenses caused by their default, and may have their remuneration disallowed or be removed from office.
(8)(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:
provisoProvided 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;
(8)(b)be liable to pay any expenses occasioned by reason of his default; and
(8)(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.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 29 of 2020, s. 50, for sub-section (6) (w.e.f. 21-12-2020).
- 2. Sub-section (7) omitted by Act 29 of 2020, s. 50 (w.e.f. 21-12-2020).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.