2016 (8) TMI 171 - HC - Companies Law

Report from Official Liquidator - Held that - The record indicates that as per the order dated 26.4.2016, the Official Liquidator has not filed any further report. Cumulatively considering the aforesaid facts therefore, the Official Liquidator is hereby directed to file an appropriate report within a period of eight weeks from today based upon the report of the Chartered Accountant as regards various claims and for appropriate direction for making payment to the shareholders for residuary amount lying with the Official Liquidator after due compliance of the Rules as prescribed under the Act.

Summary

Issues Involved:
1. Payment to creditors and shareholders.
2. Verification of claims by the Official Liquidator.
3. Preferential treatment of provident fund dues.
4. Inclusion of the Income Tax Department as a respondent.
5. Distribution of residual funds to shareholders.

Issue-wise Detailed Analysis:

1. Payment to creditors and shareholders:
The applicant, an Ex-Director of M/s. Real Laminates Private Limited (in liquidation), sought directions for the Official Liquidator to file a report on the amount lying with him and to make payments to shareholders after compliance with the prescribed rules. The company was wound up by an order dated 9.1.2001, and the Official Liquidator sold the company's immovable property for ?2.45 crores. The Official Liquidator reported the amounts payable to various creditors, including ?39,43,101 to the Central Excise Department and ?4,55,083 to the Commercial Tax Department as preferential creditors, and amounts to unsecured creditors.

2. Verification of claims by the Official Liquidator:
The Official Liquidator followed the procedure for disposing of the company's immovable property and invited claims through advertisements. Six authorities/persons lodged claims, which were verified by a Chartered Accountant. The verification report found no amount payable to the Bank of India and Gujarat State Financial Corporation, but specified amounts payable to other creditors. The Official Liquidator submitted reports detailing the dues and available funds, confirming that adequate funds were available to discharge liabilities.

3. Preferential treatment of provident fund dues:
The Official Liquidator highlighted the judgment of the Apex Court in Civil Appeal no.9630 of 2011, which mandated that provident fund dues should be given preference. The Provident Fund department confirmed an aggregate amount of ?7,930 as payable under Section 14B of the EPF & MP Act, 1952, and ?4,702 as provident fund dues.

4. Inclusion of the Income Tax Department as a respondent:
The Court directed the inclusion of the Income Tax Department as a respondent to ascertain any claimable dues. Despite communication from the Official Liquidator, the Income Tax Department did not submit its claim. The Court ordered the publication of a notice in two newspapers and directed the Official Liquidator to proceed with disbursement after the notice period.

5. Distribution of residual funds to shareholders:
The Official Liquidator was permitted to make payments to thirteen contributories/shareholders amounting to ?23,17,000 as per the verification report. The Court also allowed payment of ?3,38,240 to an advertising agency for advertisement charges. However, the payment of ?30,756 towards excise duty and government dues was kept open for further hearing. The Official Liquidator was directed to file a report on the distribution of the residual amount and any other claims.

Conclusion:
The application was disposed of with directions for the Official Liquidator to file an appropriate report within eight weeks, based on the Chartered Accountant's report, for making payments to shareholders after compliance with the prescribed rules.