1958 (7) TMI 32 - HC - Companies Law

Summary

Issues:
1. Determination of preferential claim by the Employees' State Insurance Corporation under the Employees' State Insurance Act, 1948.
2. Applicability of the Indian Companies Act, 1956 in a liquidation proceeding.
3. Interpretation of section 530 of the Indian Companies Act, 1956 in relation to the Employees' State Insurance Act, 1948.
4. Obligations of the official liquidator in submitting and auditing accounts under the Companies Act, 1956.

Analysis:
1. The judgment addresses the claim made by the Employees' State Insurance Corporation for Rs. 476 from the official liquidator under section 94 of the Employees' State Insurance Act, 1948. The official liquidator, however, opined that only Rs. 87 could be treated as a preferential claim, with the remaining Rs. 389 to be treated like any other creditor's claim. The court examined the relevant provisions of the Indian Companies Act, 1913, and the Employees' State Insurance Act, 1948, to determine the extent of the Corporation's preferential claim.

2. The court noted that the Companies Act of 1956 was applicable to the liquidation proceeding in question, as it came into effect on April 1, 1956, and the provisional liquidator was appointed on September 25, 1956. This led to the application of clause (d) of sub-section (1) of section 530 of the Act of 1956, which outlined the amounts due in respect of contributions payable under the Employees' State Insurance Act, 1948, as priority claims.

3. The judgment delved into the interpretation of clause (d) of sub-section (1) of section 530 of the Act of 1956 in conjunction with section 94 of the Employees' State Insurance Act. It highlighted that the Corporation was entitled to the contribution payable during the twelve months preceding the appointment of the provisional liquidator, amounting to Rs. 87, as a priority debt. The court emphasized that the Act of 1956 modified the provisions of section 94 to prioritize contributions for the twelve months preceding the relevant date.

4. Additionally, the judgment touched upon the obligations of the official liquidator under the Companies Act, 1956, regarding the submission and auditing of accounts. It noted the requirement for the accounts to be audited and sent to creditors and contributories. However, considering the small assets of the company in question, the court dispensed with the printing and sending of copies of the accounts to the creditors and contributories for the specified period.

This detailed analysis of the judgment provides insights into the legal interpretation of the relevant statutes and the determination of preferential claims in a liquidation proceeding under the Indian Companies Act, 1956.