Judgment:
B.P. Dharmadhikari, J.
1. These 10 Applications are moved by legal heirs of deceased workers of Hariganga Steel & Alloys Ltd. - a Company in liquidation. Their prayer is to direct Official Liquidator to pay to them the amount of dividend as per his notice dated 26/3/2007 without insisting for production of succession certificate. They point out that official liquidator has worked out total entitlement of each worker in the proceeds of Company with him and as declared dividend payable to them at 14%. They state that after winding up orders, the respective worker has expired and being heirs, they are entitled to receive that payment from official liquidator without any succession certificate. Names of legal heirs in 7 Applications are submitted by official liquidator himself to this court along with his report while in remaining 3 matters, claimant - legal heirs are allowed to be brought on record by Division Bench in Company Appeal. During hearing it has also transpired that CAL No. 89 or 114 of 2003 filed by some legal heirs for direction to Official Liquidator to make payment to them with 24% interest are still pending without any orders.
2. The brief details of individual matters are being below. Only in some matters, as per the case of Applicants, there is difference in amount mentioned initially by Official Liquidator and as mentioned in his notice dated 26/3/2007. Necessary details are as under:
(A) CAL No. 105/2008 is in relation to claim No. 172 and name of deceased worker therein is Deduram Lilhare. Applicant heir Nandlal D. Lilhare claims to be his son. Total amount due to deceased is worked out is Rs. 1,70,735/- and sum due at 14% as declared is Rs. 22,281/-. Nandlal's CAL No. 114/2003 for direction to Official Liquidator to pay the amount to him with 24% interest is pending.
(B) CAL No. 106/2008 is in relation to claim No. 176 and name of deceased worker therein is Lehar Naik. Applicant heir Smt. Rahibai L. Naik claims to be his widow. Total amount due to deceased is Rs. 93,478/- and sum due at 14% as declared is Rs. 11,928/-. CAL No. No. 89/2003 filed by Smt. Rahibai L. Naik seeking direction to Official Liquidator to pay the amount to her with 24%interest is pending.
(C) CAL No. 107/2008 is in relation to claim No. 174 and name of deceased worker therein is Ramlal Godi. Applicant heirs are Aankalu R. Godi and Bhavani R. Godi. Total amount due to deceased is Rs. 3,32,217/- and sum due at 14% as declared is Rs. 43017/-.
(D) CAL No. 109/2008 is in relation to claim No. 173 and name of deceased worker therein is Bholaram Sonkutla. Applicant heirs are Smt. Sonarinbai B. Sonkutla, Bhuwaneshwar B. Sonkutla, Birendra B. Sonkutla. Total amount due to deceased is Rs. 93,478/- and sum due at 14% as declared is Rs. 44,532/-. CAL No 89/2003 filed by Smt. Sonarinbai B. Sonkutla seeking direction to Official Liquidator to pay the amount to her with 24% interest is pending.
(E) CAL No. 110/2008 is in relation to claim No. 175 and name of deceased worker therein is Bansi Naik. Applicant heir are Smt. Sonabai Bansi Naik, Rajesh B. Naik, Paryatan B. Naik. Total amount due to deceased is Rs. 1,17,810/- stated to be admitted by Official Liquidator and Rs. 1,17,800 /- as per notice dt. 26/3/2007 and sum due at 14% as declared is Rs. 15,220/-. CAL No. 89/2003 filed by Smt. Sonabai Bansi Naik seeking direction to Official Liquidator to pay the amount to her with 24% interest is pending.
(F) CAL No. 111/2008 is in relation to claim No. 171 and name of deceased worker therein is Darshanlal Lilhare. Applicant heirs are Smt. Shantabai D.Lilhare, Sanjaykumar D. Lilhare and Shamkali Lilhare. Total amount due to deceased is Rs. 77375/- and sum due at 14% as declared is Rs. 9980/-. CAL No. 114/2003 filed by Smt. Shantabai D.Lilhare seeking directions to Official Liquidator to effect payment to her with 24% interest is pending.
(G) CAL No. 114/2008 is in relation to claim No. 170 and name of deceased worker therein is Shamlal Lilhare. Applicant heirs are Smt. Gajrabai S. Lilhare and Mohanlal S. Lilhare. Total amount due to deceased is Rs. 2,91,024/- stated to be admitted by Official Liquidator and Rs. 3,14,534/- as per notice dt. 26/3/2007 and sum due at 14% as declared is Rs. 40,751/-. CAL No. 114/2003 filed by Smt. Gajrabai S.Lilhare seeking directions to Official Liquidator to effect payment to her with 24% interest is pending.
(H) CAL No. 108/2008 is in relation to claim No. 19 and name of deceased worker therein is Mehtar Markam. Applicant heirs are Smt. Dukalibai M. Markam and Nandlal M. Markam. Total amount due to deceased is Rs. 3,41,309/- and sum due at 14% as declared is Rs. 44,205/-. In Comp. Appeal Division Bench has allowed legal heirs to come on record on 7/12/2007.
(I) CAL No. 112/2008 is in relation to claim No. 17 and name of deceased worker therein is Ankush Kolekar. Applicant heirs are Smt. Shashabai A. Kolekar and Vitthal A. Kolekar. Total amount due to deceased is Rs. 3,41,300/- stated to be admitted by Official Liquidator and Rs. 3,41,309/- as per notice dt. 26/3/2007 and sum due at 14% as declared is Rs. 44,205/-. In Comp. Appeal Division Bench has allowed these legal heirs to come on record on 7/12/2007.
(J) CAL No. 113/2008 is in relation to claim No. 61 and name of deceased worker therein is Sukhadeo Naik. Applicant heirs are Smt. Punnibai S. Naik and Sushilabai S. Naik. Total amount due to deceased is Rs. 3,41,309/- and sum due at 14% as declared is Rs. 44,205/-. In Comp. Appeal Division Bench has allowed them to come on record on 7/12/2007.
3. In this background I have heard Senior Advocate R.B. Pendharkar with Adv. Belsare for the Applicants/legal heirs. He has argued that Official Liquidator himself has filed report before this Court requesting it to accept the same and therein the figures of dividend amount as also names of legal heirs to whom the same are payable are already mentioned. It is also stated that notice dated 26/3/2007 issued by Official Liquidator for this purpose is addressed to one of the Applicants only. It is further pointed out that in 3 cases Division Bench of this Court has permitted names of legal heirs to be substituted in Company Appeal and therefore those legal heirs are also entitled to payment. In such circumstances, insistence of Official Liquidator on obtaining of 'Succession Certificate' is arbitrary and unsustainable. He invites attention to computed amounts of 14% dividend to urge that said amounts are very meagre and asking legal heirs to obtain succession certificate therefor is nothing but there persecution. He has also invited attention to certain judgments including the judgment of Division Bench in Company Appeal to argue that The Companies (Court) Rules, 1959 (referred to as Court Rules hereinafter), do not take away the inherent powers of this Court and in present facts, in order to do justice, those inherent powers need to be exercised. He also attempts to point out that previously in certain matters such course of action has been followed.
4. First I find it proper to consider the argument of availability of inherent powers to this Court in the matter of allowing payment to be made to legal heirs by Official Liquidator without insisting on production of succession certificate. Relevant provision is Rule 280 which reads as under:
280. Payment of dividend or return of capital due to a deceased creditor or contributory: Where a claim made in respect of a dividend due to deceased creditor or return of capital due to deceased contributory is Rs. 500 or less, the Official Liquidator may, upon satisfying himself as to the claimant's right and title to receive the dividend or the return, as the case maybe, apply to the court for sanctioning the payment of such a dividend or return to the claimant without the production of a succession certificate or like authority. Where the court sanctions the payment, the Official Liquidator shall make the payment upon obtaining a personal indemnity from the payee.
Rule 9 days with inherent powers and it is as under:
9. Inherent powers of Court: Nothing in this Rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.
5. In Company Appeal 8 of 2007, Division Bench of this Court has considered provisions of Rule 164 of Court Rules which prescribes limitation of 21 days for filing of an Appeal by creditor before this Court. It has been held that said rule does not bar at all applications made beyond the period of 21 days if the Company Court finds that there is justification enough for entertaining such applications. The Division Bench has further observed that in the absence of provision like Section 5 of Limitation Act or an express provision totally barring extension of such period, recourse to inherent powers under Rule 9 can not be held as closed. Rule 164 reads as under:
164. Appeal by creditor: If I creditor is dissatisfied with the decision of the Liquidator in respect of his proof, the creditor may, not later than 21 days from the date of service of the notice upon him of the decision of the Liquidator, appeal to the court against the decision. The Appeal shall be made by a Judges summons, supported by an affidavit which shall set out the ground of such appeal and notice of appeal shall be given to the Liquidator. On such appeal, the court shall have all the powers of an appellate court under the Code.
It is therefore apparent that language of Rule 164 itself does not prohibit filing of an appeal after expiry of 21 days and does not in any way restrict the power of Company Court to entertain such appeal thereafter. Rule 7 permits the Court to extend or abridge the time prescribed by the Court Rules. Recourse to Rule 9 in such circumstances in furtherance of this scheme and in the interest of justice is not prohibited. Rule 280 on the other hand does not deal with any power of Court. It restricts the power of Official Liquidator to make payment to legal heirs of deceased creditor/worker. Said provision permits him to effect such payment without succession certificate if the amount is small. The amount is also specified in the provision itself. However even in that case, law requires him to record a satisfaction as to claimant's right or title to receive that dividend and thereafter to obtain sanction of Company Court to effect such payment without succession certificate or like authority. The Court, therefore, has to scrutinize the correctness of satisfaction as reached by him. Obviously, the payment can be made only if it is sanctioned by Court but even in that case Official Liquidator has to obtain personal indemnity from such claimant. Thus legislature has evolved an elaborate procedure in this respect and Official Liquidator has been permitted to move for sanctioning the payment without succession certificate only in the circumstances stipulated in Rule 280. There is no other provision which permits the Company Court to sanction payment directly to such claimant without intervention of the Official Liquidator. Even if it is presumed that in appropriate cases, upon failure or refusal of Official Liquidator to act, this Court may direct release of payment without succession certificate but then compliance with safeguards prescribed in Rule 280 will have to be ensured by Court. In view of this express provision and ceiling on the amount for which succession certificate can be dispensed with, it is obvious that recourse to inherent powers vide Rule 9 of Court Rules is not possible. What is expressly prohibited by Rule 280 cannot be achieved vide Rule 9 of Court Rules. The procedure is to safeguard the interests of genuine creditors and that purpose can not be allowed to be defeated.
6. Learned Senior Advocate had pointed out that Rule 280 does not contemplate only succession certificate but also other documents as it uses the word 'like authority' and according to him this phrase of wide amplitude has deliberately been used to meet with various possible uncertain situations. I find that the Official Liquidator is the trustee of funds of Company in liquidation for creditors and Court Rules therefore also contemplate a valid discharge for him. Court Rules nowhere authorize Official Liquidator or Company Court to issue any authority or certificate as a substitute for succession certificate. Succession Certificate is obviously one under the provisions of Indian Succession Act. Word 'like authority' therefore, will necessarily mean an authority to receive payment granted by similar competent forum after due notice of claim before it to all possible rival claimants or legal heirs. Such authority therefore has to be from any other forum given jurisdiction in that respect by some statute. The said words do not dilute the provisions of Rule 280 in any way but only provide for an alternative to succession certificate if such alternative is available legally. When Official Liquidator cannot dispense with requirement of said Rule 280, it is obvious that there has to be a specific provision to enable Company Court to waive it and when, Rule making authority has chosen not to incorporate such a Rule; the arguments of present Applicants on these lines deserve to be rejected.
7. Unreported judgment of learned Single Judge of Nagpur Bench of this Court dated 16/9/1997 in Writ Petition Nos. 1700/1996, 1801/1996, 2677/1996 and 2678/1996 wherein in paragraph No. 13 this Court has observed that whenever legal representatives of deceased respondents in writ petitions before it move for execution, those legal representatives would be entitled to execute the certificates of recovery under Section 33C(2) of Industrial Disputes Act, 1947. It is obvious that there were no legal representatives before the Court and therefore only names of deceased employees were allowed to be deleted in those writ petitions filed by Employer. The judgment therefore does not throw any light on controversy before me. In Bank Karmachari Sangha v. Cosmos Cooperative Urban Bank reported at : 1998(2)BomCR692 , in paragraph 7 this Court has found that one member of union by name G.M. Joshi had died and another person had filed affidavit mentioning that the deceased was not gainfully employed. Though respondent employer had due notice of that affidavit and date of hearing, nobody appeared before Court on behalf of employer. It is in this background that in paragraph No. 9 direction has come that compensation due to deceased should be paid to his legal heirs on requisite affidavit being filed by such legal heirs before the management. It is apparent that no 'principle of law' has been laid down in any of these judgments and this Court was not required to consider any debate on the issue in that connection. Certainly provision like present Rule 280 of Court Rules did not fell for consideration there. One order dated 16/4/1990 passed by Company Court at Nagpur on A.O.L. Report No. 4/1988 is also pressed into service by Senior Advocate. Said order only permitted Assistant Official Liquidator to retain an amount of Rs. 8 lakh during pendency of petition and without prejudice to the rights of either of the parties. Rest of the amount was directed to be refunded to National Textile Corporation. It does not help the present Applicants in any way.
8. In present facts, mere inclusion of names of legal representatives of deceased worker by Official Liquidator in his report or then permission granted to these legal representatives to represent interest of deceased worker during verification of claim before Official Liquidator or then by Division Bench in Company Appeal does not have the effect of dispensing with requirement of Rule 280. While narrating facts I have already made reference to Company Application Nos. 89/2003 and 114/2003 still pending for orders in which only one of the legal heirs has sought direction to Official Liquidator to make payment to him with 24% interest. After closure of Company consequent to winding up or even before that, most of the workers must have gone elsewhere or shifted even to various other towns/places in search of livelihood. In some Applications it is mentioned that widows shifted to some interior places and hence there was some delay in presenting the claim or challenging its rejection. The situation and plight of such dependents of deceased worker is not hard to realize. Rule 280 has been enacted only to safeguard interest of such dependents. In few cases, the amount is really very small to ask Applicants to incur expenditure for procuring succession certificate or similar authority and wait indefinitely till that process is complete. But then in this jurisdiction identity of genuine legal heirs is required to be established elsewhere and brought on record of Official Liquidator. In the circumstances, I do not find that this Court can deviate from the procedure prescribed and in any case, there is no material before this Court or even before Official Liquidator to record a finding about Applicants being legal heirs of respective deceased workers.
9. All Applications are therefore rejected, with no order is to costs. However, if the Applicants move for grant of succession certificate or any like document/authority, the concerned competent Court or Authority may expeditiously decide such proceedings filed therefor before it.