HIGH
COURT OF PUNJAB AND HARYANA
Oswal
Agro Furane Ltd.,(In liquidation) In re.
Hemant
Gupta, J.
Civil
Appeal Nos. 723 of 2005, 627 of 2006
In
Company Petition No. 173 of 2000
December
14, 2006
Section 529A, read with section
530, of the Companies Act, 1956 and rule 167 of the Companies (Court) Rules,
1959 - Winding up - Overriding preferential payment - Subsequent to winding up
order and sale of assets of company-in-liquidation, workers filed an
application before High Court seeking a
direction to Official Liquidator to settle their claim - Court directed
Official Liquidator to appoint a chartered accountant for scrutiny of worker’s
claim and to settle their claims on basis of said report - Chartered
Accountant, so appointed, classified claims of workers under section 529A and
claims of 33 employees under section 530
– Counsel of workmen conveyed acceptance to report of Chartered Accountant in
respect of claims classified under section 529A, but in respect of claims
classified under section 530, it was stated that fresh claims would be
submitted – However, Official Liquidator, without seeking further evidence in
terms of rule 159 and without accepting/rejecting claim of employees classified
under section 530, sought approval of Court as if their claim fell under
section 529A and after Court permitted
him to pay dues of workmen as per report of chartered accountant, he paid all
workmen including aforesaid 33 employees - Whether since claim of 33 employees
had been paid without any acceptance of claims by Official Liquidator and on
misrepresentation by Official Liquidator to Court, disbursement made to said
employees was wholly unjustified, illegal and without jurisdiction - Held, yes
– Whether, therefore, said 33 employees were to be directed to refund amount
disbursed to them and Official Liquidator was to be directed to consider and
pass appropriate order after adjudicating claim of employees classified under
section 530 in terms of report of chartered accountant - Held, yes
The company was ordered to be wound up and the Official Liquidator sold its assets. Thereafter, the workers of company-in-liquidation filed an application seeking a direction to the Official Liquidator to settle their claim. The Court allowed the application and directed the Official Liquidator to appoint a chartered accountant for scrutiny of claim of workers as well as other creditors and to settle their dues on basis of report of chartered accountant. The Chartered Accountant, so appointed, classified the claims of workers under section 529A and claims of 33 employees under section 530. Admittedly, the claims of 33 employees classified for payment under section 530 were not accepted by the counsel appearing for them, but the Official Liquidator, without any additional affidavit or document or inquiry, approached the Court by filing application that claims of 464 workmen including 33 employees had been accepted and after the Court allowed the application, the Official Liquidator made 100 per cent payment to workers including 33 employees classified to be paid under section 530 as per report of the chartered accountant. Thereafter, the Court appointed Court Commissioner to examine the claim of each of the workmen with reference to the records available with the Official Liquidator and other statutory record available and furnish a detailed report. In his interim report, the Court Commissioner pointed out that in respect of the employees classified for payment under section 530, there was restriction on payment of sum exceeding Rs. 20,000 to each employee in terms of section 530(2), read with section 530(1), in terms of Central Government notification dated 17-2-1997 and, therefore, the claims in respect of the employees falling under section 530 were not correct. On the basis of the said interim report, a show-cause notice was ordered to be issued to 33 employees to show as to why the amount disbursed to them be not refunded.
HELD
The Official Liquidator could not refer to any office noting or order
passed by the then Official Liquidator accepting the claims of 33 employees
contained as the one admissible under section 529A. Even the said employees could not refer to
any order passed by the Official Liquidator accepting the claims of such employees
as workmen and, thus, entitled to wages under section 529A. [
The procedure for proof of debt provided in the Rules had not been
followed by the then Official Liquidator, who joined as Official Liquidator
attached to the Court. After inviting
claims from the creditors, the Official Liquidator is required to examine the
proof of debt lodged with him and to call upon the creditor to produce further
evidence after sending a notice to such creditor. In terms of rule 163 of the Rules, the Official
Liquidator is to record an order in writing admitting or rejecting the proof in
whole or in part. Every decision of the
Official Liquidator accepting or rejecting the proof either wholly or in part
is required to be communicated to the creditor.
It is further contemplated that in case of rejection, such communication
is required to be sent to the concerned creditor by registered post with
acknowledgment due and in the case of acceptance, it can be under certificate
of posting. The decision of the Official
Liquidator rejecting the claim is appealable in terms of rule 164 of the
Rules. Rule 167 of the Rules contemplates that the Official Liquidator is to file in the Court a certificate
in Form No. 71 containing a list of creditors who submitted to him proofs of
their claims in pursuance of the advertisement and the notices referred to in
rule 148, the amounts of debts for which they claimed to be creditors,
distinguishing in such list the proofs admitted wholly, the proofs admitted or
rejected in part, and the proofs wholly rejected. The proofs along with the memorandum of
admission or rejection of the same in whole or in part, as the case may be, is
required to be filed in the Court along with the certificate and such list of
creditors could not be varied except under the orders of the Court in terms of
rule 168. [
There was no order of acceptance or rejection of proof as contemplated under rule 163 but still payment had been made to 33 employees on the basis of affidavits taken on the date of issuance of dividend notices and the amount disbursed. The dividend notice was blank in respect of signatures, date of appearance, etc. Still further, the proof and list of creditors in terms of rule 167 had not been filed in the Court.
It was, thus, apparent that the claims of 33 employees had been paid
without any acceptance of claims by the Official Liquidator and on the basis of
misrepresentation by the Official Liquidator to the Court. Though the advocate of said employees had
communicated to the Official Liquidator on 18-5-2005, to file additional
documents to admit the claims of the employees treating them under section
529A, but no such documents were filed before the applications were filed
before the Court to seek approval of the payment. The Official Liquidator had accepted the report
of the Chartered Accountant in its entirety, as there was no averment in the
application that such report was not acceptable. Therefore, the disbursement
made to 33 employees was wholly unjustified, illegal and without jurisdiction. [
In view of the above, the Official Liquidator was to be directed to consider and pass appropriate order adjudicating the claims of the employees classified under section 530 in terms of the report of the chartered accountant.
The employees were to be directed to refund the amount to the Official Liquidator within one month pending adjudication of their claims so as to restore the position as it existed prior to disbursement of the amount.
The Central Bureau of Investigation was directed to investigate the
entire gamut of payment of dividend from the stage of invitation of claims,
settlement and payment to find out any misappropriation of funds of the company in liquidation by the Official
Liquidator, employees or workmen or any other person who has connived or colluded
with the officials. [