sebi:WTM/GM/EFD/DRA2/13329/2021-22

SEBI · SEBI · 2013-02-22 · G. Mahalingam, Whole Time Member, SEBI

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Facts / Headnote

SCN disposed of in respect of Noticee Nos. 1, 2, 4, 5, 6, 7, 8, 9 and 10; no further directions passed; SCN subsists with respect to Mukkaram Jan (Noticee No. 3) owing to Supreme Court stay.

Provisions invoked

• s. 11
• s. 205
• s. 207

Parties

• Cranes Software International Limited
• Asif Khader
• Mueed Khader
• Rudra Pratap
• Richard Gall
• Ronald Brown
• Manju Bnasal
• Peter Ryser
• Mirza Yawar Baig
• Mukkaram Jan

Holding

The Whole Time Member declined to pass any further directions against Noticee Nos. 1, 2 and 4 to 10 and disposed of the SCN against them, as the dividends declared for FY 2008-09 had been disbursed and the SCORES complaints closed. The SCN subsists against Noticee No. 3 (Mukkaram Jan) owing to the stay granted by the Supreme Court.

Full text

Order in the matter of Cranes Software International Ltd Page 2 of 14 10 Mirza Yawar Baig - 1. Background – 1.1. The present matter emanates from certain complaints received by SEBI with respect to the non-payment of dividend declared by Cranes Software International Limited (“Cranes”/the “Company”) for the financial year 2008-09. 1.2. Pursuant to the above, SEBI issued letter dated February 22, 2013 to the Company asking it to furnish information regarding declaration and payment of dividends under the Companies Act, 1956 and reasons if any, for default. 1.3. Cranes by way of letter dated March 12, 2013 informed SEBI that they had not been able to pay dividend to the shareholders due to DRT litigations.

Order in the matter of Cranes Software International Ltd Page 3 of 14 b. as per Section 205(1A) of the Companies Act, 1956, the Noticees were required to deposit the amount of dividend in a separate account within 5 days of such declaration, and as per Section 207 of the Companies Act, 1956, the Noticees were under obligation to disburse the dividend declared to the shareholders within a period of 30 days from the date of declaration of dividend; c. the Noticees had failed to pay the dividend declared by the company to the Shareholders within the prescribed time, thereby violating the provisions of Sections 205(1A) and 207; and d. considering the above, the Noticees were asked to show-cause as to why proceedings under Sections 11 and 11B of the SEBI Act, 1992 should not be initiated against them.

Order in the matter of Cranes Software International Ltd Page 4 of 14 Section 207, Companies Act, 1956 207. PENALTY FOR FAILURE TO DISTRIBUTE DIVIDENDS WITHIN THIRTY DAYS “Where a dividend has been declared by a company but has not been paid, or the warrant in respect thereof has not been posted, within thirty days from the date of the declaration, to any shareholder entitled to the payment of the dividend, every director of the company shall, if he is knowingly a party to the default, be punishable with simple imprisonment for a term which may extend to three years and shall also be liable to a fine of one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent per annum during the period for which such default continues: Provided that no offence shall be deemed to have been committed within the meaning of the foregoing provisions in the following cases, namely: - (a) where the dividend could not be paid by reason of the operation of any law ; (b) where a shareholder has given directions to the company regarding the payment of the dividend and those directions cannot be complied with ; (c) where there is a dispute regarding the right to receive the dividend ; (d) where the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder ; or

Source: SecMarx — sebi:WTM/GM/EFD/DRA2/13329/2021-22. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.