Dividend Held in Abeyance

Section 126 of Companies Act, 2013
Right to Dividend, rights shares and Bonus shares to be held in abeyance pending registration of transfer of shares:

Where any instrument of transfer of shares has been delivered to any company for registration and the transfer of such shares has not been registered by the company,
transfer the dividend in relation to such shares to the Unpaid Dividend Account referred to in section 124 unless the company is authorised by the registered holder of such shares in writing to pay such dividend to the transferee specified in such instrument of transfer.
Hence, if shares are not registered in the name of transferee and transferor not authorised the company to pay dividend to transferee, right to dividend shall be keep in abeyance.

thank you so much

As you have not mentioned you need interpretation on the concept of Dividend in abeyance under which act, So let me give you from both Companies Act,2013 and Securities Contract(Regulation) Act,1956

Firstly, As per Section 126 of the companies act,2013

Where any instrument of transfer of shares has been delivered to any company for registration and the transfer of such shares has not been registered by the company, it shall, notwithstanding anything contained in any other provision of this Act,—

(a) transfer the dividend in relation to such shares to the Unpaid Dividend Account referred to in section 124 unless the company is authorised by the registered holder of such shares in writing to pay such dividend to the transferee specified in such instrument of transfer; and

(b) keep in abeyance in relation to such shares, any offer of rights shares under clause (a) of sub-section (1) of section 62 and any issue of fully paid-up bonus shares in pursuance of first proviso to sub-section (5) of section 123.

There's a similar concept in SCRA,

 As per Section 27 of Securities Contract(Regulation) Act,1956

It shall be lawful for the holder of any security whose name appears on the books of the company issuing the said security to receive and retain any dividend declared by the company in respect thereof for any year, notwithstanding that the said security has already been transferred by him for consideration, unless the transferee who claims the dividend from the transferor has lodged the security and all other documents relating to the transfer which may be required by the company with the company for being registered in his name within fifteen days of the date on which the dividend became due.

Explanation.— The period specified in this section shall be extended—

(i) in case of death of the transferee, by the actual period taken by his legal representative to establish his claim to the dividend;

(ii) in case of loss of transfer deed by theft or any other cause beyond the control of the transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security and other documents relating to the transfer due to causes connected with the post, by the actual period of the delay.

(2) Nothing contained in sub-section (1) shall affect—

(a) the right of a company to pay the dividend which has become due to any person whose name is for the time being registered in the books of the company as the holder of the security in respect of which the dividend has become due; or

(b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case, where the company has refused to register the transfer of the security in the name of the transferee.

Interpretation of both of the sections

In section 126 of the Companies act, the basic objective is to keep the dividend, any bonus or right shares associated to those shares in a separate bank account thus not giving a preference to the transferee.

However, in section 27 of SCRA the basic objective is to give the transferee a preference if the transfer is in substance complete and only the mere formalities of changing the name in the records of the company from Transferor to Transferee.

So as per companies act, once the registration is complete, the dividend and bonus shares etc will be given to transferor? In short i m still confused about who receives the divindend, bonus shares, right shares in abeyance once the registration is completed by the company as per companies act, transferor or the transferee?

My logic says that the transferee gets the benefits after registration, but i want confirmation.

Yes you are right, After the transfer certificate is issued and all transfer related documents are filed to the company however the registration is not complete in register of members then everything as in the dividend, bonus shares and right shares shall be kept in a separate account so that benefit is not given to neither the transferee or the transferor, however eventually when the name of transferee is added in register of members then transferee shall have all the rights .