Succession certificate required before paying dividend due to a deceased shareholder's representatives; relationship proof alone is insufficient.

Payment of dividend due to a deceased shareholder's representatives could not be made without production of a succession certificate, because Section 214 of the Indian Succession Act, 1925 requires statutory proof of entitlement to collect a deceased person's debt. A Tahsildar's certificate showing relationship with the deceased was insufficient, as it did not replace the certificate contemplated by law. The succession procedure was treated as a safeguard against payment to an unauthorised claimant, and Rule 280 of the Companies (Court) Rules supported that requirement except in limited small-payment cases. Payment was therefore confined to cases where a succession certificate, or an appropriate certificate from the Administrator General where permissible, was produced.

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Issues: Whether the Official Liquidator could be directed to disburse dividend payable to a deceased shareholder's representatives without production of a succession certificate or a certificate from the Administrator General.

Analysis: The amount claimed was a debt due to the deceased and was sought by persons asserting to be his representatives. Section 214 of the Indian Succession Act, 1925 requires production of a succession certificate to establish entitlement to collect such a debt. The Tahsildar's certificate only showed relationship with the deceased and could not substitute for the statutory certificate. The procedure under the Indian Succession Act is intended to ensure that payment is made only to a duly entitled person after opportunity for objections, and that safeguard could not be bypassed. Rule 280 of the Companies (Court) Rules also supports insistence on a succession certificate, except in limited small-payment situations.

Conclusion: The application for a direction to pay the dividend without a succession certificate was not maintainable and was rejected. Payment could be made only on production of a succession certificate under Section 214 of the Indian Succession Act, 1925, or an appropriate certificate from the Administrator General where permissible.

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