2012 (12) TMI 588 - HC - Companies Law

Company in liquidation - liquidator rejected the part of claim made by the bank - held that - the Official Liquidator cannot be said to have committed any illegality in declining to admit the claim in relation to the interest from 19.10.2002 to 31.04.2009, being the period after the date of the order of the winding up; and in relation to the other expenditure as incurred without taking permission from the Court or approval of the Official Liquidator. Of course, the Official Liquidator would be making final payment in accordance with law after the adjudication of all the claims.

Summary

Issues:
Challenge to rejection of part of the claim by the Official Liquidator in a liquidation case.

Analysis:
The applicant-bank contested the rejection of a portion of its claim by the Official Liquidator concerning a company in liquidation. The Official Liquidator admitted a portion of the claim but rejected another part, citing reasons for the rejection. The applicant argued that the rejection was unjustified and highlighted the Official Liquidator's failure to deposit the amount towards the company's debts despite court orders.

The Official Liquidator, in response, referred to relevant sections of the Companies Act, 1956, and the Companies (Court) Rules, 1959, to justify the rejection of the interest claim post the winding-up date. They explained that any expenditure incurred without approval post winding-up is inadmissible. The Official Liquidator provided a breakdown of the admissible claim, including principal amounts, interest up to the winding-up date, and costs awarded by the Debt Recovery Tribunal (DRT).

The applicant's counsel raised concerns about the delay in disbursing the realized amount from the company's asset sale, leading to losses for the bank. The Official Liquidator's counsel mentioned the ongoing adjudication process for workmen claims, delaying the disbursement until all claims are settled. The Official Liquidator's decision to reject the interest claim post-winding up and unauthorized expenditures was deemed legal, with final payments to be made after all claims are adjudicated.

Acknowledging both parties' arguments, the Court emphasized the need for the Official Liquidator to expedite claim adjudication while preventing unnecessary delays. The Official Liquidator was given a two-month extension to set up office and process pending claims promptly. The Court rejected the application challenging the claim rejection but outlined the expectations for the Official Liquidator to handle pending claims efficiently.

In conclusion, the Court dismissed the application against the claim rejection, granting a two-month extension for the Official Liquidator to expedite claim adjudication and emphasized the need to prevent unnecessary delays in the liquidation process.