BODIES CORPORATE (OFFICIAL LIQUIDATIONS) ACT - 1963 (ACT 180)

Section - 45 - Dividends to Creditors

(1) Subject to the provisions of the immediately preceding section, the liquidator shall from time to time, and as early as practicable, declare and distribute dividends to creditors in accordance with following rules, that is to say,

(a) provision shall be made for the payment in full of all class A debts before any dividend is declared in respect of class B debts and so on throughout the classes;

(b) all debts within one class shall rank pari passu;

(c) payment shall be made only in respect of debts which rank for dividends and shall not exceed the values thereof;

(d) where a security held by a creditor has not yet been reduced or surrendered, the value of the debt against which the security is held shall be treated as reduced by the value of the security;

(e) interest shall not be allowed in respect of any period after the commencement of the winding up.

(2) Where a dividend has been paid under this section in respect of a debt which is subsequently struck out and reduced in value by an amendment of the admitted proof, the creditor shall repay to the liquidator the difference between the amount of the dividend and the amount which, in the light of the amendment, should have been paid.

(3) Where a dividend has been paid under this section in respect of a debt and is subsequently increased in value by an amendment of the admitted proof, the liquidator shall, so far as may be practicable, without disturbing dividends already declared, pay to the creditor the difference between the amount of the dividend and the amount which, in the light of the amendment, should have been paid.

(4) Where a creditor has omitted to lodge a proof of debt during the period allowed by this Act, or has omitted a provable debt from his proof, he may at any time during the liquidation apply to the Court for relief, and if the Court is of opinion that the omission was excusable it shall make an order requiring the liquidator, so far as may be practicable without disturbing dividends already declared, to pay to the creditor such sum as would have been payable to him under this section if the omission had not occurred.

(5) If, at the end of the period of one year following the declaration of a dividend stated by the liquidator to be the final dividend, any payments under that or any previous dividend remain outstanding because the creditors in question cannot be found, the liquidator shall cancel the payments and, unless payment in full has been achieved shall declare a further dividend in favour of the remainder of the creditors.

(6) In the case of a final dividend, or a further dividend declared under the immediately preceding subsection, no payment of less than ten pounds shall be required to be made.

(7) Payment under this section shall be in money drawn from the company's official account:

Provided that property which has not been converted into money may be transferred to a creditor in lieu of the equivalent amount of money if the creditor consents.