THE HON'BLE Ms. JUSTICE G.ROHINI COMPANY APPLICATION No.1539 OF 2010 AND COMPANY APPLICATION No.1540 OF 2010 IN R.C.C. No.5 OF 2000 Dated: 18.01.2011 Between: M/s. Leena Textiles Limited (In Liqn.) ..... Applicant The Court made the following:- THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY APPLICATION No.1539 OF 2010 AND COMPANY APPLICATION No.1540 OF 2010 IN R.C.C. No.5 OF 2000 COMMON ORDER: The Official Liquidator attached to this Court representing M/s. Leena Textiles Limited, the company in liquidation is the applicant in these two applications. C.A.No.1539 of 2010 is filed under Section 460 (4) of the Companies Act read with Rule 167 of the Companies (Court) Rules, 1959 to condone the delay in filing the Certificate in Form No.71 in respect of the adjudication of claims of the secured creditors including workmen of the company in liquidation in terms of Rule 167 of the Companies (Court) Rules, 1959. C.A.No.1540 of 2010 is filed to take the said Certificate in Form No.71 on record and to notify the same in terms of Rule 169 of the Companies (Court) Rules, 1959. The applicant also seeks to declare a dividend to workmen and for other reliefs as under: “i. take the certificate in Form No.71 filed as Annexure-“A” in respect of M/s. Leena Textiles Limited in liquidation relating to the claims of its secured creditors and workmen with the Memorandum of Admission/Rejection of the claims on record. ii. direct the Registrar to notify the said Form No.71 on the notice board of this Hon’ble Court in terms of Rule 169 of the Companies (Court) Rules, 1959. iii. Permit the Official Liquidator to dispense with the adjudication of claims of other preferential/unsecured creditors whose claims are not likely to yield any dividend so as to take steps for the dissolution of the company. iv. declare a dividend @ 5.0985% to IDBI, 5.0983 to IFCI in respect of fixed assets and @ 3.9005% to SBI, 4.2069% to SBH and 4.3613% to BOB in respect of fixed and current assets and @ 21.9468% in respect of fixed and current assets to workman in all aggregating to a sum of Rs.1,05,83,593.70ps. as detailed in the statement marked as Annexure-“B”. v. authorise the Official Liquidator to open a separate dividend account in Punjab National Bank and pay the dividend to the secured creditors and workmen out of the said account, in terms of Rule 290 of the Companies (Court) Rules, 1959. vi. dispense with the publication of notice of dividend in newspapers as the same is proposed to only 6 creditors of the company. vii. authorise the Official Liquidator to send individual notices of dividend in Form No.138 along with Form No.139. viii. authorise the Official Liquidator to fix the schedule for making payment. ix. authorise Official Liquidator to pay dividend due to any deceased creditor to his legal heirs upon production by such legal heirs, family member certificate or such other certificate instead of producing a succession certificate and also upon furnishing personal indemnity, in terms of Rule 280 of the Companies (Court) Rules, 1959. x. authorise the Official Liquidator to transfer the un-paid dividend, if any remaining in the dividend account, after the expiry of six months period to Companies Liquidation Account, in terms of Section 555 of the Companies Act, 1956. xi. authorise the Official Liquidator to take all necessary actions and steps which are incidental to declaration and payment of dividend and to effectively implement the orders of this Hon’ble Court in that regard. xii. order that the costs of this application do come out of the assets of the company (in liqn.)” I have heard Sri M. Anil Kumar, the learned counsel for the Official Liquidator. A perusal of the material available on record shows that M/s. Leena Textiles Limited was directed to be wound up by this Court by order dated 17.10.2000 made in R.C.C.No.5 of 2000 and the Official Liquidator attached to this Court was appointed as its Liquidator. Pursuant thereto, having taken possession of the assets of the company, the Official Liquidator sold the same. Thereafter, in terms of the order passed by this Court dated 21.03.2003 made in C.A.No.195 of 2003. The Official Liquidator invited the claims from the creditors of the company in liquidation by publishing a notice in Form No.63 in the newspapers dated 5.5.2003 fixing the last date for receipt of claims as 21.5.2003. In response to the same, 5 claims were received from secured creditors of the company in liquidation and 2 claims were received from its workmen. That apart a claim was received from the Commercial Tax Department (Preferential) and 22 claims were received from unsecured creditors. The claims of the secured creditors and the workmen were adjudicated and admitted. A sum of Rs.3,67,94,000/- was also paid to the secured creditors as interim dividend. The claims received from the Commercial Tax Department and the unsecured creditors are pending for adjudication for want of proof. While stating that a sum of Rs.1,07,75,595-31 ps is lying to the credit of the company in liquidation, the Official Liquidator filed these applications seeking permission to declare and disburse dividends to all the entitled creditors. It is proposed to declare a dividend @ 5.0985% to IDBI, 5.0983% to IFCI in respect of fixed assets and @ 3.9005% to SBI, 4.2069% to SBH and 4.3613% to Bank of Baroda in respect of fixed and current assets and @ 21.9468% in respect of fixed and current assets to workmen in all aggregating to a sum of Rs.1,05,83,593-70 ps as shown in the Annexure-B statement. In the affidavit filed in support of the applications, it is further stated that the Certificate in Form No.71 as required under Rule 167 of the Companies (Court) Rules, 1959 could not be filed within three months from the last date fixed for receiving the claims as there was delay on the part of the creditors in filing the proof in support of their claims. It is also explained that the claim of lone workman of the company in liquidation was admitted as secured debt vide Form No.69, dated 3.12.2009. It is true that under Rule 167 of the Companies (Court) Rules, 1959 the Certificate in Form No.71 should have been filed within three months from the date fixed for submission of the proofs. In the present case, the notice inviting claims from the secured and other creditors of the company in liquidation was published fixing the last date for receipt of claims as 21.05.2003. As such the certificate in Form No.71 should have been filed before this Court on or before 20.08.2003 and thus there is a delay of about 2673 days in filing the Form No.71 Certificate before this Court. The facts noticed above, which are borne out of the record, disclose that there was delay on the part of the creditors in furnishing the proof in support of their claims and moreover the claim of a lone workman of the company in liquidation was admitted only on 3.12.2009. It is explained in the affidavit filed in support of the applications that as there was a long delay on the part of the creditors in filing their proofs and in the meanwhile as the office of the Official Liquidator had to concentrate on the process and adjudication of the claims received from the other companies in liquidation, the files relating to M/s. Leena Textiles Limited, the company in liquidation remained pending. It is further explained that during the special drive initiated in the office of the Official Liquidator to clear all the pending claims for adjudication, the files relating to the creditors of M/s. Leena Textiles Limited, the company in liquidation have been traced and immediately thereafter the adjudication of the claims was completed and the Certificate in Form No.71 has been placed before this Court. While stating that the delay in filing Form No.71 Certificate is only due to the circumstances explained above and it is neither wilful nor wanton, it is prayed to take on record the said certificate by condoning the delay. It is also explained by the Official Liquidator that though 22 claims have been received from unsecured creditors, the same could not be adjudicated so far for want of proof. To avoid further delay and moreover since the said claims being second and third to the claims of the secured creditors are not likely to yield any dividends, the Official Liquidator seeks permission to dispense with the adjudication of the said claims for the purpose of distribution of dividends to the entitled secured creditors without any further delay. It is true that the certificate in Form No.71 should be filed within three months from the date of fixing for submission of proofs. However, the explanation offered by the Official Liquidator in the affidavit filed in support of the application shows that the delay was occasioned for genuine reasons and there is no reason to hold that the delay had occurred in the office of the Official Liquidator deliberately or on account of negligence. Rule 167 read with Rule 7 of the Companies (Court) Rules, 1959 confers wide powers for enlarging the time fixed by the rules to meet the ends of justice. It is also relevant to note that the condonation of the delay in the present case does not adversely affect the rights of any of the parties, but on the other hand it would enable the winding up proceedings to reach the logical conclusion. Hence, I deem it appropriate to condone the delay in filing the Certificate in Form No.71. Accordingly, the delay in filing the Certificate in Form No.71 is hereby condoned and the said certificate is taken on record with a direction to the Registrar to notify the same as provided under Rule 169 of the Companies (Court) Rules, 1959. So far as the dividend proposed to be declared and disbursed to the secured creditors and the workmen of the company in liquidation is concerned, the learned counsel for the Official Liquidator submits that the proposals made in the Annexure-B statement are in order. Hence the Official Liquidator is hereby permitted to declare and disburse the dividend as proposed. Since the dividend is proposed to only six creditors of the company in liquidation, the publication of notice of dividend by advertisement in newspapers in Form No.137 is hereby dispensed with. Instead the Official Liquidator is permitted to send the notice of dividend to the creditors individually in Form No.138. Such notice of dividend in Form No.138 shall also be issued to all the workmen individually in respect of the company in liquidation. All other reliefs sought by the Official Liquidator in C.A.No.1540 of 2010 are also hereby granted. In the result, both C.A.Nos.1539 & 1540 of 2010 are allowed as prayed for. _____________ G. ROHINI, J Dt. 18.01.2011 Ivd/gbs