Companies Liquidation Account payment requires no pending court application by the same claimant under section 555(7)(b).

Section 555(7)(b) of the Companies Act, 1956 was construed to require the authority to be satisfied that the claimant is entitled to payment from the Companies Liquidation Account and that no application by the same claimant under clause (a) is pending in court. The provision was held to guard against double pursuit of the same claim, not to require inquiry into applications filed by other persons. On the facts noted, the Regional Director's sanction for payment was treated as valid because the record did not establish a pending application by the claimant that would defeat the statutory condition.

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Issues: (i) Whether the Regional Director's order sanctioning payment from the Companies Liquidation Account was a nullity for want of compliance with section 555(7)(b) of the Companies Act, 1956. (ii) Whether the expression "no application made in pursuance of clause (a) is pending in the court" in section 555(7)(b) refers to any application by any person or only to an application by the same claimant.

Issue (i): Whether the Regional Director's order sanctioning payment from the Companies Liquidation Account was a nullity for want of compliance with section 555(7)(b) of the Companies Act, 1956.

Analysis: The statutory scheme under section 555 treats unclaimed dividends and undistributed assets paid into the Companies Liquidation Account as sums payable to identified persons. Under section 555(7)(b), the Central Government or its delegate may order payment if satisfied that the claimant is entitled to the money and that no application under clause (a) is pending in court. The Court found no basis to hold that the Regional Director failed to satisfy those requirements. The record did not establish that the claimant had filed any application under section 555(7)(a), and the department had not proved that the Regional Director had notice of any pending court application before passing the order.

Conclusion: The order of the Regional Director was not a nullity and was valid.

Issue (ii): Whether the expression "no application made in pursuance of clause (a) is pending in the court" in section 555(7)(b) refers to any application by any person or only to an application by the same claimant.

Analysis: Clause (a) and clause (b) are alternative remedies for the same person seeking payment from the Companies Liquidation Account. The object of the provision is to prevent double pursuit of the same claim before both forums, not to require the authority to ascertain whether any other person has filed any application in court. Rule 9(3) of the Companies Liquidation Account Rules, 1965 also proceeds on the basis that the Registrar verifies whether the claimant has any pending court application. The Court therefore construed the statutory condition as limited to an application by the same claimant seeking the same relief.

Conclusion: The condition in section 555(7)(b) refers only to a pending application by the same claimant under clause (a), not to any application by anyone else.

Final Conclusion: The claimant was entitled to payment from the Companies Liquidation Account, the departmental claim failed, and the Regional Director's order stood restored.

Ratio Decidendi: Under section 555(7)(b) of the Companies Act, 1956, the authority need only be satisfied that the same claimant has not already pursued the same remedy in court under section 555(7)(a); the existence of another pending application by a different person does not invalidate an order for payment from the Companies Liquidation Account.

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