SHINGHAL, J. - (1.) THIS is an application of Ganeshi Lal, one of the ex-directors of the Bharatpur Oil Mills Private Ltd. , for relief u/rule 177 of the Companies (Court) Rules 1959, hereinafter referred to as "the Rules". An order for the winding up of the Company was made on 4-10-1960, and the petitioner claims the recovery of his remuneration as director for the period 20 5-1957 to 4-1-1960, at the rate of Rs. 400/- per month, amounting to Rs. 12,600/- on the strength of two resolutions of the Company dated May 20, 1957 and September 12, 1958. He has stated that after the winding-up order was made, he asked the other directors to file a claim on his behalf also because he was not in a position to undertake the journey to Jodhpur on account of his old age and illness, and that he remained under the impression that they had done so. He came to know from one of the ex-directors that the claims of the other three directors were allowed by the Official Liquidator on September 26, 1971, and he therefore filed the present application on October 29, 1971. As a dividend had already been declared by than, the applicant has stated that he may be paid out of the surplus in the hands of liquidator. An affidavit has been filed in support of the application.
(2.) THE Official Liquidator has opposed the application on three main grounds. He has contended that the last date for the submission of claims was January 30, 1961, that the applicant has not given any "cogent reason*' for the delay and that a dividend of 50 paise in the rupee has been declared and paid in the meantime. THEn he has stated that the applicant is not entitled to claim remuneration because at the time when he was called upon to file the statement of affairs of the Company under sec. 454 of the Companies Act, he denied his responsibility on the ground that he had resigned already. Lastly, it has been contended that the application is premature because the applicant has not filed a claim with the Official Liquidator in the first instance. Now, it cannot be doubted that the present application for relief has been filed after a long period of time is as much as January 30, 1961 was the last date for the filling of proof. The applicant has however stated on oath that he is an old and sick man and that he remained under the impression that the other directors had filed a claim on his behalf also as requested by him. There is nothing on the record to show that this contention is not factually correct. It has to be remembered that the applicant had a claim for a substantial sum of money, and there is no reason to think that he would have delayed it wilfully. As has been stated, there has been a long delay filing the proof, but as the claim is within the period of limitation prescribed by the Limitation Act, the only consequence of the delay will be that prescribed by sec 474 of the Companies Act according to which a creditor, who does not prove his debt or claim within the time fixed by the court, has to be excluded from the benefit of any distribution made before his debt or claim is proved. A perusal of rules 177 and 178 of the Rules lends support to this view, for the reason that while rule 177 provides for relief by the Court to a creditor who fails to file proof within the prescribed time-limit, rule 178 lays down that a creditor who has not proved his debt before the declaration of any dividend shall not be entitled to disturb the distribution of any dividend declared before the proof of his debt by reason of the fact that he did not participate in it. He is. however, entitled to be paid out of any money for the time being in the hands of the Liquidator available for distribution of dividend. The scheme of law therefore does not prescribe any other penalty in the case of belated claim. I am fortified in this view by the decision in In re General Rolling Stock Company (1 ). There the winding-up order was made in February, 1865 and the certificate of debts and claims was made in December 1870. A dividend was paid on the established debts in January 1871. In March, 1871 the holder of some bills of exchange to a large amount, which had become payable in February 1865, gave the first notice of his claim and applied for leave to prove, not disturbing the previous dividends. It was held on appeal that he was entitled to do so without disturbing the previous dividends. I am in respectful agreement with that view. A similar point arose for consideration in In re Ketcalfe (2) and it was held that a creditor may come in as long as there are undistributed assets still available That decision has been followed In re Kit Hill Tunnel 3 ). The position of the law on the point is thus quite clear and has been stated as follows in Buckley on the Companies Acts, 13th edition, page 544 - "a creditor may come in and prove at any time before the company is dissolved; the penalty of not coming in before the day fixed by the Court is not exclusion altogether, but exclusion from the benefit of any distribution made before proof. " The same view has been expressed in Palmer's Company Law, twenty-first edition, at page 761. Reference may also be made to the decisions in sack Jesudasan Pillai vs. Divan Bahadur Ramasamy Chetty (4) which appears to have been based on the decision in In re General Hailing Stock Company (l), and T. R. Rajakumari vs. Motion Picture Producers Combine Ltd. (5 ). It is thus as well settled proposition of the law that a creditor may come in and prove his debt at any time before the final distribution of the assets, but he cannot disturb any dividend which has already been paid. The first objection of the Official Liquidator is therefore futile. It has next been urged that as the applicant had denied his responsibility to file a statement of affairs under sec, 454 of the Companies Act on the ground that he had resigned from the office of Director, he should not be allowed to claim his remuneration in that capacity. The learned counsel for the applicant has argued, on the other hand, that the applicant sent his resignation to the Company to be effective from February 12, 1959, and that as it was accepted to his knowledge, there is no reason why he should not be entitled to his remuneration for the entire period. It appears to me, however, that this is really a matter which concerns the question of sufficiency of the proof in respect of the claim and it will be for the Official Liquidator to examine as I am not inclined to adjudicate upon the applicant's debt myself. The third objection is that the application is premature inasmuch as the claim has not been filed with the Official Liquidator in the first instances. It will be sufficient to say in this connection that as a provision has been made in R. 177 of the Rules permitting a creditor who fails to file proof of his debt with the liquidator within the time specified for the purpose to apply to the court for relief, it is not possible to take the view that an application for such relief should be rejected merely because the creditor has not approached the Official Liquidator in the first instance. The official Liquidator is therefore directed to adjudicate upon the debt of the applicant according to the law. The applicant shall pay Rs. 300/- as costs to the Official Liquidator. . ;