124. Unpaid Dividend Account
(1) Where a dividend has been declared by a company but has not been paid or
claimed within thirty days from the date of the declaration to any shareholder entitled to the
payment of the dividend, the company shall, within seven days from the date of expiry of the
said period of thirty days, transfer the total amount of dividend which remains unpaid or
unclaimed to a special account to be opened by the company in that behalf in any scheduled
bank to be called the Unpaid Dividend Account.
(2) The company shall, within a period of ninety days of making any transfer of an
amount under sub-section (1) to the Unpaid Dividend Account, prepare a statement containing
the names, their last known addresses and the unpaid dividend to be paid to each person and
place it on the website of the company, if any, and also on any other website approved by the
Central Government for this purpose, in such form, manner and other particulars as may be
prescribed.
(3) If any default is made in transferring the total amount referred to in sub-section (1)
or any part thereof to the Unpaid Dividend Account of the company, it shall pay, from the
date of such default, interest on so much of the amount as has not been transferred to the
said account, at the rate of twelve per cent. per annum and the interest accruing on such
amount shall enure to the benefit of the members of the company in proportion to the amount
remaining unpaid to them.
(4) Any person claiming to be entitled to any money transferred under sub-section (1)
to the Unpaid Dividend Account of the company may apply to the company for payment of
the money claimed.
(5) Any money transferred to the Unpaid Dividend Account of a company in pursuance
of this section which remains unpaid or unclaimed for a period of seven years from the date
of such transfer shall be transferred by the company along with interest accrued, if any,
thereon to the Fund established under sub-section (1) of section 125 and the company shall
send a statement in the prescribed form of the details of such transfer to the authority which
administers the said Fund and that authority shall issue a receipt to the company as evidence
of such transfer.
(6) All shares in respect of which unpaid or unclaimed dividend has been transferred
under sub-section (5) shall also be transferred by the company in the name of Investor
Education and Protection Fund along with a statement containing such details as may be
prescribed:
Provided that any claimant of shares transferred above shall be entitled to claim the
transfer of shares from Investor Education and Protection Fund in accordance with such
procedure and on submission of such documents as may be prescribed.
(7) If a company fails to comply with any of the requirements of this section, the
company shall be punishable with fine which shall not be less than five lakh rupees but
which may extend to twenty-five lakh rupees and every officer of the company who is in
default shall be punishable with fine which shall not be less than one lakh rupees but which
may extend to five lakh rupees.