Non-payment of dividend: relevance of bank records depends on the company's proof of payment, despatch, or statutory transfer.

In proceedings for alleged non-payment of dividend, the Companies Act scheme required the company to pay declared dividend within 42 days by cash, cheque or warrant, or to avoid liability by proving lawful despatch or transfer of unpaid amounts to the special unpaid dividend account. The complainant could prove declaration and entitlement, but non-receipt remained a negative fact and could not be proved by compelled production of extraneous bank records. Documents from a particular bank branch and the bank manager's evidence were therefore not relevant to the complainant's burden or to the prosecution issue, and the summoning order was held unsustainable.

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Issues: Whether documents from the bank and the evidence of the bank manager were relevant and could be summoned in proceedings concerning alleged non-payment of dividend.

Analysis: The complaint related to non-payment of declared dividend and the statutory scheme under sections 205, 205A, 205B and 207 of the Companies Act was examined. The company is required to pay dividend within 42 days of declaration, either by cash, cheque or warrant, and can avoid liability by showing that the dividend was duly despatched or that unpaid amounts were transferred to the special unpaid dividend account. The shareholder can prove declaration and entitlement, but non-receipt is a negative fact. The burden of showing due payment or lawful despatch rests on the company. Summoning bank documents from a particular branch would not itively establish guilt, because the company could show compliance through another bank branch or other records. The requested material was therefore not germane to the complainant's burden or to the issue in the prosecution.

Conclusion: The documents and bank-manager evidence were irrelevant, and the order allowing their summoning was unsustainable.

Final Conclusion: The challenge to the summoning order succeeded and the impugned order was set aside.

Ratio Decidendi: In a prosecution for non-payment of dividend, the complainant need not and cannot prove a negative fact of non-receipt by compelled production of extraneous records; relevance and liability turn on whether the company proves timely payment, despatch, or statutory transfer of unpaid dividend.

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