Case Note & Summary
The Official Liquidator filed an application under Rules 308 and 309 of the Companies (Court) Rules, 1959 seeking permission to appoint Mr. Jitendra Mangre as Peon (MTS) with effect from 08.11.2024 in the liquidation proceedings of M/s. Mahadeo Land Developers Pvt. Ltd. The application also sought permission to pay salary and allowances from the Common Pool Fund Account. The Court examined the scope of Rules 308 and 309, noting that these rules require the Official Liquidator to form an opinion that additional staff is necessary in a particular liquidation and then apply to the Court for sanction. The Court observed that the Official Liquidator's report dated 19.04.1974, which led to an order dated 25.04.1974, sought appointment of staff for general assistance to the office, not for a specific liquidation. The Court found that such general appointment is not within the scope of Rule 308, which mandates that appointment must be in a particular liquidation and for a specific purpose. Additionally, the Court noted that salary must be paid from company funds, not from the Common Pool Fund. The Supreme Court's decision in Official Liquidator Vs. Dayanand and Ors. was cited, which clarified that staff employed under Rule 308 are paid from the fund created by disposal of assets of companies in liquidation. The Court held that the application was not maintainable and dismissed it, directing the Official Liquidator to file a proper application if needed.
Headnote
A) Company Law - Liquidation - Appointment of Additional Staff - Rules 308 and 309 of the Companies (Court) Rules, 1959 - The Official Liquidator sought permission to appoint a Peon (MTS) for general assistance to his office, not for a particular liquidation. The Court held that Rule 308 requires the appointment to be in a particular liquidation and for a specific purpose; appointment for general office assistance is not permissible. Salary must be paid from company funds, not Common Pool Fund. (Paras 1-12) B) Company Law - Liquidation - Common Pool Fund - Payment of Salary - Rules 308 and 309 of the Companies (Court) Rules, 1959 - The Court held that payment of salary and allowances to staff appointed under Rule 308 must be from the funds of the company in liquidation, not from the Common Pool Fund maintained by the Official Liquidator. (Paras 11-12)
Issue of Consideration
Whether the Official Liquidator can seek appointment of additional staff under Rules 308 and 309 of the Companies (Court) Rules, 1959 for general assistance to his office, and whether salary can be paid from the Common Pool Fund Account.
Final Decision
The application is dismissed. The Official Liquidator is at liberty to file a proper application in accordance with law, if so advised.
Law Points
- Rules 308 and 309 of the Companies (Court) Rules
- 1959 mandate that appointment of additional staff must be for a particular liquidation
- not for general assistance to the Official Liquidator's office
- salary must be paid from company funds
- not Common Pool Fund
- appointment ceases upon dissolution of the company.
