M C GOLCHA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THE dispute relates to the dividend amount of Rs. 2 lakhs lying with the Registrar of Joint Stock Companies. Under an order of this court, dated May 10, 1968, Golcha Properties P. Ltd. was ordered to be wound up. The official liquidator attached to this court was appointed as official liquidator of the company in liquidation. While the company was in liquidation, first dividend of Rs. 59,652.41, second dividend of Rs. 65,050.81 and a third dividend of Rs. 1,45,457 were declared on February 22, 1973, May 11, 1973, and November 20, 1975, respectively. Out of the aforesaid amount of dividend, a sum of Rs. 2,24,858.29 remained unclaimed. Under the provisions of Sub -section (1) of Section 555 of the Companies Act, 1956 (for short, 'the Act'), the official liquidator paid the dividend payable to the shareholders into the public account of India in the Reserve Bank in a separate account which is known as the Companies Liquidation Account.

(2.) A Company Petition No. 15 of 1979 entitled M.C. Golcha v. Official Liquidator was filed in this court on behalf of the management of the company in liquidation and in the light of the scheme sanctioned by this court on December 15, 1975, and further, in the light of the agreement submitted by the applicant on September 27, 1979, the company went out of liquidation and possession of the two cinemas has been handed over by the official liquidator to the applicant or their nominees. The applicant has now claimed the aforesaid sum of Rs. 2,24,858.29 being the amount of dividend which was either not claimed or could not be paid because of non -availability of the claimants.

(3.) A bare perusal of Section 555 of the Act will show that such sums or amounts of unpaid dividends which the liquidator is required to pay into the public account of India in the Reserve Bank of India in a separate account to be known as the Companies Liquidation Account, cannot be returned to the company even after passing of an order of deliquidation. The amount of dividend is payable to the creditors. Thus, the creditors of the company alone are entitled to the payment of the dividend. Under Sub -section (7) of Section 555 of the Act, any person claiming to be entitled to any money paid into the Companies Liquidation Account may apply to the court for an order for payment thereof and the court if satisfied that the person claiming is entitled, may make an order for the payment to that person of the sum due, but it can only be done after a notice is served on such officer as the Central Government may appoint in this behalf, calling on that officer to show cause within one month from the date of the service of the notice as to why the order should not be made. A bare perusal of Sub -section (8) of Section 555 of the Act will show that any money paid into the Companies Liquidation Account in pursuance of Section 555 which remains unclaimed thereafter for a period of fifteen years, shall be transferred to the general revenue account of the Central Government, but even to that amount, a claim may be preferred under Sub -section (7) and shall be dealt with as if such transfer had not been made. Thus, it is not the management of the company which is entitled to the amount of dividend lying under Section 555 of the Act in the Companies Liquidation Account and it is only the, creditors to whom the amount of dividend is payable who have a right to file an application as aforesaid under the provisions of Section 555 of the Act. In the case of Colaba Land and Mill Co, Ltd. v. Union of India [1985] 58 Comp Cas 513 (Bom), it has been held that the expression 'any person' claiming to be entitled to any money paid into the Companies Liquidation, Account had a wide meaning and could not be confined to a creditor or member or a contributory of the company. The expression could also include the company itself which went out of liquidation and later regained its original status and position. Thus, it could be held that the company would fall within the expression 'any person', but it was not the person entitled to the money lying in the Companies Liquidation Account as it was neither entitled under Section 555 to be paid the undistributed assets of the contributories nor was the company entitled to the same under the sanctioned scheme. The court further held that on the date when the scheme was sanctioned, the amount was not in the hands or under the control of the official liquidator and therefore, on the sanctioning of the scheme, he could not have handed over the amount to the company. The amount lying in the name of the contributory in the Companies Liquidation Account is his money, though the relationship of a creditor and debtor is not created between the contributory and the Central Government holding the money in the Companies Liquidation Account.