Board of directors of Charming Entertainment Ltd. in its meeting held on 16th April, 2015 declared an interim dividend on its paid-up equity share capital. Now, the Board wants to revoke the said declaration in its next

Dividend which includes interim dividend as per Section 2 (35) of Companies Act, 2013, is a due from the company once it is properly declared. Interim dividend is declared by the Board of Directors and once it is declared, it thus becomes due from the company. Section 123(4) further provides that the amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in a separate account within five days from the date of declaration of such dividend. If the articles of the company do not authorize so, it has to be amended accordingly. Section 127 of the Companies Act, 2013 provides for penalty to directors for any default in not paying dividend within 30 days from the date of declaration. However, no offence under this section shall be deemed to have been committed: Where a shareholder has given directions to the company regarding the payment of the dividend and those directions cannot be complied with and the same has been communicated to him; Where there is a dispute regarding the right to receive the dividend; Where the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder; or Where, for any other reason, the failure to pay the dividend or to post the warrant within the period under this Section was not due to any default on the part of the company. In the given case, interim dividend has to be paid and cannot be revoked once it is declared as the exceptions given above do not apply in the given case.