Dividends and Returns of Capital in a Winding-up by Court

Rules under the Companies (Court) Rules, 1959 regrading Dividends and Returns of Capital in a Winding-up by Court:

Rule 275. Declaration of dividend or return of capital
No dividend to creditors or return of capital to contributories shall be declared by the Official Liquidator without the sanction of the Court.

Rule 276. Notice of declaration -

The Official Liquidator shall give notice of the declaration of dividend not less than one month prior to the date fixed for the payment thereof. Unless otherwise directed by the Judge, such notice shall be given by advertisement in such newspapers as the Judge shall direct and by sending by prepaid letter post under certificate of posting a notice to every person whose name appears in the list of creditors as on such date. The advertisement shall be in Form No. 137 and the notice to creditor in Form No. 138.

Rule 277. Form of authority to pay dividend -
A person to whom dividend is payable may lodge with the Official Liquidator an authority in writing to pay such dividend to another person named therein. Such authority shall be in Form No. 139.

Rule 278. Transmission of dividends by post -
Dividends and returns of capital may, at the request and risks of the person to whom they are payable, be transmitted to him by registered post or by money order, as may be appropriate.

Rule 279. Form of order directing return of capital -
Every order by which the Official liquidator is authorised to make a return to contributories of the company, shall, unless the Court otherwise directs, contain or have appended thereto a schedule or list (which the Official Liquidator shall prepare) setting out in a tabular form the full names and addresses of the persons to whom the return is to be paid, and the amount of money payable to each person, and particulars of the transfers ofshares (if any) which have been made or the variations in the list of contributories which have arisen since the date of the settlement of the list of contributories and such other information as may be necessary to enable the return to be made. The schedule or list shall be in Form No. 140 with such variations as circumstances shall require and the Official Liquidator shall send a notice of return to each contributory by ordinary post under certificate of posting in Form No. 141.

Rule 280. Payment of dividend or return of capital due to a deceased creditor or contributory
Where a claim made in respect of a dividend due to a deceased creditor or a return of capital due to a deceased contributory is Rs. 500 or less, the Official Liquidator may, upon satisfying himself as to the claimant's right and title to receive the dividend or the return as the case may be, apply to the Court for sanctioning the payment of such dividend or return to the claimant without the production of a succession certificate or likeauthority. Where the Court sanctions the payment, the Official Liquidator shall make the payment upon obtaining a personal indemnity from the payee.