Dividend not deposited in separate bank account within 5 days due to Holiday: Validity of penalty imposed?
Section 123(4) of Companies Act 2013 requires dividend to be deposited in separate bank account within 5 days from the date of declaration. Now the question here is what if the 5th day happens to be a public holiday?
Section 10 of General Clauses Act provides that in such a case next working day becomes the due date. However, ROC, Mumbai in this case levied penalty of Rs.44,000 on the company and KMPs (including CS) for delay of 1 day. Dividend was declared on 27.9.2022 and the 5th day was 2nd October 2022 which was a public holiday and hence dividend was deposited on 3.10.2022. It is not clear why the company did not take plea of Sec.10 of General Clauses Act.
The copy of the order is as under:
