Frequently Asked Questions
(I) FAQ's Related to Claims against the company
1. Who can file a claim?
Any creditor of a company which has been ordered to be wound up can file a claim against the company before the Official Liquidator.
2. Is there any classification of claimants?
Yes, the claimants can be classified as Workmen Creditors, Secured Creditors, Preferential Creditors and Ordinary Creditors.
3. Is there any priority based on which claims are settled?
Yes. Dividend is distributed among claimants in the following order of preference
- Provident Fund Organization
- Workmen and Secured Creditors
- Preferential claimants such as the Government Claimants
- Ordinary claimants/ Unsecured Creditors/ Deposit Holders
4. How to file a claim and what are the requisite documents involved?
A claim has to be filed as per FORM 66 of Company (court) Rules 1959, a copy of which can be downloaded from the website i.e. Download -> Forms. The claimant is advised to submit all originals necessary to prove his/her claim along with Form 66 at the time of its filing. The said Form 66 is an Affidavit sworn by the claimant and notarized by a public notary. The claimant is also advised to keep photocopies of the claim documents for his future reference and correspondence. Further claimants are advised not to staple their claims, rather stitch the claim sheets together so that claim documents are not lost in transit or storage.
5. What are the necessary documents to be produced by the workmen creditor?
The workmen creditor shall provide all necessary documents that are required to prove that he/her has indeed worked with the company and that the company has failed to pay salary/other dues to him/her. These documents shall include, company ID/ Registration Number, Appointment Letter, Leave book, ESI Card, EPF Number, Latest Salary Certificate etc. The claimant is advised to submit originals of the above mentioned documents at the time of its filing his claim. The claimant is also advised to keep photocopies of the claim documents for his future reference and correspondence.
6. What are the necessary documents to be produced by depositors of a company?
The depositor shall produce original deposit receipt along with the claim, if original deposit receipt is not produced, the claimant shall be called upon to produce the same. However, it is advised that original deposit receipt may be submitted along with the claim for speedy process of claim and the claimant is advised to retain a photocopy of the submitted documents for future reference.
7. When to file a claim?
The Official Liquidator shall invite claims from the creditors of the company through an advertisement in leading dailies giving at least 14 days’ time (normally 30 days) for the claimants to file their claims before him. Further as part of e-governance initiative the advertisement shall also be displayed in this website covering the entire period of 30 days. The claimant shall file his claim during the notification period.
8. Can a claim be filed after the expiry of the last date specified in the claim invitation?
Yes. But only after getting the delay condoned from the Hon'ble High Court, Madras. However, claimant is advised to file the claim in time as the process of delay condonation may take considerable time and effort and that the claimant shall also be deprived of the dividend amount distributed prior to filing of such claim.
9. When will the Official Liquidator invite claims against the company?
The Official Liquidator invites claims after realization of assets of the company that has been ordered to be wound up.
10. Why haven’t the Official Liquidator invited claims in a particular company?
There could several reasons for not invitation of claims, but the most common reason is that the company in liquidation does not have assets to be distributed among its creditors.
11. What is the priority of workmen claims?
Workmen creditors have (pari passu charge/ equal right) over the assets of the company with respect the creditors who have created statutory charge over the assets of the company. In simpler terms both Workmen creditor and the Secured Creditor rank equal in terms of the right to receive the proceeds of assets of the company.
12. What the components of workmen claims u/s 529 A of Companies Act, 1956 wherein workmen have equal right over the proceeds of the assets of the company?
Workmen creditors are entitled to claim unpaid salary, gratuity as per payment of gratuity Act and Closure Compensation as per Industrial Disputes Act. He/she shall also be entitled to claim encashment of leaves accrued during the period of employment. Further, it may be noted that Lay off salary, Notice Period salary, Leave travel Concession, LIC Claim, Interest of dues or any such claim shall not be entrained.
13. How is a claim of bonus payment for workmen treated?
Bonus claim is not part of 529-A claim, and hence claim for bonus amount will not have priority.
14. What is the relevance of date of winding up to adjudication of claims?
All claims, irrespective of the type of the claims, shall be made up until the date of winding up order/ appointment of provisional liquidator. In other words the all claims crystallize on the date of winding up order/appointment of provisional liquidator as the case may be. No fresh debt can be created against a company after the date of winding up order.
15. How will the claimant know, whether or not his claim is accepted?
Upon receipt of the claim, Official Liquidator, after calling upon the claimant to produce additional information or proof if necessary, will adjudicate/ decide upon the same. Once the claim is adjudicated, the same shall be intimated to claimant by an order known as adjudication order as per Form 69/Form 70 of Company (Court) Rules, 1959 as the case may be.
16. What is the remedy available to the claimant if he/she is aggrieved by the order of adjudication?
If aggrieved, the claimant shall approach the Hon’ble High Court, Madras within 21 days of such order for appropriate orders.
17. Can claim be filed on behalf of a deceased claimant?
Yes legal hires of the deceased claimant can file a claim.
(II) FAQ's Related to receipt of Dividend/Payment
1. What is the procedure for receiving dividend/payment from the Official Liquidator?
The Official Liquidator after adjudicating the claim sends dividend notices to the claimants and on receipt of which the claimants shall send back the dividend notice along with a signed advance receipt accompanied by the following information.
- Account Number to which the dividend/payment should be credited
- IFS Code
- Bank name and Branch Name
- A copy of the first page of the passbook that contains the photograph of the claimant
2. What happens when the claimant fails to receive the dividend in time?
If the claimant fails to receive the dividend within time, then the claim amount would deposited under as unclaimed dividend amount with the Registrar of companies, Tamil Nadu. Herein it may be noted that the process of recovery of claim amount after due date is quite tedious and hence the claims are reminded to collect their dues within time.
3. How to receive dividend in the event of demise of the claimant?
In the unfortunate event of the death of the claimant, the legal heirs of the claimants shall produce the claimant’s death certificate and legal heir certificate so that the payment can be made to the legal heir(s). Further in the event of there being more than one legal heir, the dividend amount shall be either equally distributed or if a no objection certificate is provided by other legal heirs in favour of one of the legal heir, then the dividend shall be paid to that legal heir in full. A personal Indemnity shall also be provided by the payee (person receiving payment) to the extent of dividend received.
(III) Other FAQ's
1. Is there any specific format for communication of change of address?
No, claimant can send a letter to the Official Liquidator notifying his change of address in any format by including the following details
- Claim Registration Number provided by the Official Liquidator
- Name of the company against which the claim was filed
- Name of the claimant
- Previous Address
- Changed Address
2. What are the legal obligations of the ex-directors?
The Ex-directors of the company have the following legal duties towards the Official Liquidator
- To submit the statement of affairs of the company detailing its assets and liabilities as required u/s 454 of Companies Act, 1956 as specified in Form 57 of Company (Court) Rules, 1959 within 21 days of the date of winding up order, failing which they are liable to a maximum punishment of two years imprisonment.
- To submit all books and records of the company.
- To answer any quires put by the liquidator with respect to the affairs of the company and to provide additional information with respect to the sworn statement of affairs when called upon to do so.