Rules 168 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rules 168 to 173 of the Companies (Winding Up) Rules, 2020 explain how money reaches creditors and contributories at the end of a winding up by the Tribunal: the Tribunal must sanction a dividend or a return of capital, creditors get notice, payment can be by post or electronic means, and small claims of deceased persons can be paid without a succession certificate. They are stated as amended up to 24 January 2020 (in force from 1 April 2020), with no amendment listed by MCA, per the MCA e-book; later amendments should be checked.
The Company Liquidator may not declare a dividend to creditors or a return of capital to contributories without the Tribunal's sanction. Notice of the declaration goes out not less than fifteen days before the payment date, by advertisement (Form WIN 89) and by post or electronic mode to every creditor on the list (Form WIN 90). For a deceased creditor or contributory whose claim is one lakh rupees or less, the Tribunal may sanction payment on a Family Member Certificate, with an indemnity and a stamped affidavit, without a succession certificate.
Where this fits
Dividends come after proofs of debt are admitted (see Rules 115–125) and assets are sold with sanction (Rules 163–167). The order in which money is paid is a matter of the Act; for preferential payments, see Section 327 on preferential payments in winding up. The next rules, on dissolution, are in Rules 174–178.
A creditor who is unsure of the amount admitted, or a family trying to claim a deceased relative's dividend, can speak to us under legal dispute resolution.
Rule 168: declaration of dividend or return of capital
No dividend to creditors, and no return of capital to contributories, may be declared by the Company Liquidator without the sanction of the Tribunal. The rule is a single sentence, and everything else in this group builds on it.
Rule 169: notice of declaration
The Company Liquidator gives notice of the declaration of a dividend not less than fifteen days before the date fixed for payment. Unless the Tribunal directs otherwise, the notice is given in two ways:
- by advertisement in the newspapers the Tribunal directs, in Form WIN 89; and
- by sending, by registered or speed post and by electronic mode if any, a notice to every person whose name appears in the list of creditors as on that date, in Form WIN 90.
Rule 170: authority to pay dividend to another person
A person to whom a dividend is payable may lodge with the Company Liquidator a written authority to pay it to another person named in it. The authority is in Form WIN 91.
Rule 171: payment by post or electronic means
Dividends and returns of capital may, at the request, risk and cost of the person to whom they are payable, be sent to him by money order or to his bank account by electronic means, as appropriate. The rule puts the risk and cost of this mode on the payee, who must ask for it.
Rule 172: form of order directing return of capital
Every order authorising the Company Liquidator to make a return to contributories must, unless the Tribunal directs otherwise, contain or have appended a schedule or list prepared by him, in tabular form, setting out:
- the full names and addresses of the persons to whom the return is to be paid;
- the amount payable to each;
- particulars of any share transfers made, or variations in the list of contributories that have arisen since the settlement of the list; and
- other information necessary to enable the return to be made.
The schedule is in Form WIN 92, with variations as circumstances require. The Company Liquidator sends a notice of return to each contributory by registered or speed post and by electronic mode if any, in Form WIN 93.
Rule 173: deceased creditor or contributory
Where a claim for a dividend due to a deceased creditor, or a return of capital due to a deceased contributory, is one lakh rupees or less, the Company Liquidator may, after satisfying himself of the claimant's right and title, apply to the Tribunal for sanction to pay without production of a succession certificate or like authority. In place of the succession certificate, the claimant must produce a Family Member Certificate issued by the competent authority in the State Government or Union territory. If the Tribunal sanctions payment, the Company Liquidator pays after obtaining a personal indemnity and an affidavit duly stamped from the payee.
Example. Hari Prasad, a creditor of Sunrise Polymers Ltd, died after his debt was admitted. His widow, Savitri, claims a dividend of eighty thousand rupees. The Company Liquidator is satisfied of her right and applies to the Tribunal. Savitri produces a Family Member Certificate instead of a succession certificate. After the Tribunal's sanction, she gives an indemnity and a stamped affidavit, and payment is made. If the claim were above one lakh rupees, rule 173 as printed would not apply.
Process at a glance
| Step | Rule | Who | Period as printed | Form |
|---|---|---|---|---|
| Sanction to declare dividend or return | 168 | Tribunal | None | None printed |
| Notice of declaration | 169 | Liquidator | Not less than fifteen days before payment | WIN 89 (advertisement); WIN 90 (creditors) |
| Authority to pay another person | 170 | Payee to liquidator | None | WIN 91 |
| Payment by money order or bank account | 171 | Payee requests | None | None printed |
| Schedule for return of capital; notice of return | 172 | Liquidator | None | WIN 92; WIN 93 |
| Deceased claimant, claim of one lakh rupees or less | 173 | Liquidator, Tribunal, claimant | None | Family Member Certificate; indemnity; stamped affidavit |
Need help claiming or paying a liquidation dividend?
Creditors and contributories, and families of deceased claimants, often need guidance on which papers the Company Liquidator and the Tribunal expect. Our team can help you prepare them; start with a session on legal dispute resolution.
Key takeaways
- A dividend or return of capital cannot be declared without the Tribunal's sanction.
- Notice must be given at least fifteen days before the payment date, by advertisement and to each creditor on the list.
- Payment by money order or electronic transfer is at the payee's request, risk and cost.
- The return of capital order carries a tabular schedule in WIN 92, and each contributory gets WIN 93.
- Claims of deceased persons of one lakh rupees or less may be paid on a Family Member Certificate, with an indemnity and a stamped affidavit.
Read next
- Rules 163–167 of the Winding Up Rules: compromise of claims and sale of assets
- Rules 174–178 of the Winding Up Rules: dissolution of the company
- Section 327: preferential payments in winding up
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.