Procedure to be followed in the matter of crediting of fees to Central Government in terms of rule 291 of Court Rules, 1959 - Companies Law - No. 17/74

Circular : No. 17/74 [20/1/69 ‑ CL ‑ III], dated 2 ‑ 1 ‑ 1975. Subject:- Procedure to be followed in the matter of crediting of fees to Central Government in terms of rule 291 of Court Rules, 1959 The question about the procedure to be followed in the matter of crediting fees to the Central Government in terms of rule 291 of the Companies (Court) Rules, 1959, has been examined in detail and it is hereby clarified that the aforesaid rule has to be read with rule 286 which prescribes the forms of the registers to be maintained by the official liquidator for the internal use of his office including the register for the realisations and disbursements made by him in the course of a year to the creditors and contributories. The amounts which have to be credited to the Central Government need obviously be credited at the earliest practicable date after the realisations or the disbursements so that the accounts as reported upon by the auditor and submitted to the court by the official liquidator may reflect the realisations and disbursements as well as the fees paid thereon to the Central Government. The disbursements in the context of rule 291 obviously exclude the fees to be credited to the Central Government unlike in the context of the half‑yearly accounts submitted to the court under section 462 of the Act which is governed by paragraph 1 of the general instructions at the top of the form prescribed under the section to the effect that under disbursement should be entered all payments for costs and charges which would include the fees credited to Government [vide rule 338 of the Companies (Court) Rules read with section 476]. It may be noticed that Form No. 144 prescribed under the rules is the form to be used under rule 299 of the said Rules for the purpose of the statements of accounts to be submitted under section 462. In accordance with general instructions indicated at the top of the form, the statement of accounts in Form No. 144 is required to be submitted for every half year duly audited. Thus, it is clear that after the fees are credited to the Central Government, the credit given will be subject to the audit and will be shown in the audited accounts and simultaneously an entry will be made in the relevant register maintained by the official liquidator under rule 286, i.e., in Form No. 142Q. The time at which the entry in the said register is to be made is clearly indicated in instruction No. 3 under the said Form No. 142Q, which is to be maintained for a whole year with details for each half year comprised therein separately. The legal position being as stated, it is indeed not necessary to consider the point that if the commission is credited on a half‑yearly basis, there may be some cases in which the amount realised in half year may not exceed Rs. 10,000 and may thus attract the larger percentage of the amount to be credited to the Central Government as fees in terms of rule 291 whereas if a whole year is taken into account, the further realisation which may be made in the course of the next half year may also be taken into account and the total being less than Rs. 50,000 a lesser percentage of the total amount would only have been liable to be credited to the Central Government. Thus, there is a difference in the amount which may be saddled upon the liquidation proceedings by way of fees to the Central Government regarded as a cost or expense in the winding up. It is of course true that there is a difference as pointed out, but it is important to remember that what may appear to be a loss to the creditors and contributories whom the official liquidator represents is gain to the Central Government whose interest also the official liquidator has to protect, being an officer of the Government. The gain accruing to the Government is not by any means an unwarranted gain and cannot be denied to the Government on any reading of the statutory provisions without doing violence to its plain tenor and effect. In the light of the position stated above, the practice adopted by the official liquidator, Jodhpur, is correct and the question of any excess to be adjusted as supposed, does not arise.