Dividend cheque not presented within time

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Pankaj Kumar Mali (Querist)

10 June 2013 Sir my client has declared dividend and issued a cheque but shareholder did not presented within 30 days and later on company re-validated the cheque otherwise it would have been dishonored, finally dividend was paid after six months when shareholder presented cheque to bank.
will it be regarded as unclaimed dividend and Companies provisions regarding transferring it into "unpaid dividend " apply ???

GJCo

GJCo (Expert)

11 June 2013 When did the company re-validate the cheque ?
Please provide dates of:
1)declaration of dividend
2)date of re validation.

Ideally, the Act does not give power to re validate the cheque issued for the purposes of payment of dividend.

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CS Ankur Srivastava

CS Ankur Srivastava (Expert)

12 June 2013 Yes the provisions of unpaid dividend would apply. The company needed to transfer the amount of dividend to unpaid dividend account within 7 days after the expiry of 30 days from the date of declaration of dividend. and after that the dividend is to be paid from unpaid dividend account.

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Pankaj Kumar Mali

Pankaj Kumar Mali (Querist)

13 June 2013 Sir dividend was declared on 25th September 2012 in AGM and Original Cheque was issued on 18th October and cheque was re validated around January' 2013 was cleared on 26th March 2013.
kindly refer the Act according to which A cheque can not be re - validated in case of payment of dividend...

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