Bombay High Court

OFFICIAL LIQUIDATOR OF GARWARE NYLONS LTD. (IN LIQUIDATION)versusHENKEL CHEMICALS (INDIA) LTD. (PETITIONER)

Decided: 20 February 2026
Disposal: DISPOSED OFF
Bench: ARIF S DOCTOR

Holding

The High Court allowed the Official Liquidator's report, granting prayers (a) to (d) and clarifying that Pravin Mahadev Dhole is not precluded from receiving dividend if he has not already been paid.

Summary

The Official Liquidator of Garware Nylons Ltd., a company in liquidation, filed a report seeking the High Court's permission to withhold dividend payments to certain workmen who had already received gratuity under the Gratuity Act, adjust the excess amount, declare a dividend of 2.20% from the sale proceeds of mortgaged properties to secured creditors and other workmen, publish a notice of dividend in newspapers, and open a separate dividend account for payment. The liquidator argued that 120 workmen had already been paid under the Gratuity Act and that the remaining workmen, including Pravin Mahadev Dhole, should receive the dividend after verification. The respondent workman contended he was not among the 120 already paid and should not be excluded. The Court allowed the liquidator's report, granting all the prayed reliefs while clarifying that Dhole would not be precluded from receiving payment if he had not already been paid. Consequently, the report was disposed of with the directions granted.

Issues considered

Whether the Court can permit the Official Liquidator to withhold dividend payment to workmen who have already received gratuity under the Gratuity Act and adjust the excess amount.
Whether a dividend of 2.20% can be declared and paid to secured creditors and workmen from the sale proceeds of mortgaged properties.
Whether the Official Liquidator may publish a notice of dividend in specified newspapers as per Rule 276 of the Companies (Court) Rules, 1959.
Whether a separate dividend account can be opened with Punjab National Bank under Rule 290 of the Companies (Court) Rules, 1959 for the purpose of dividend payment.
Whether the workman Pravin Mahadev Dhole is excluded from the dividend payment.

Legislation cited

Companies Act, 1956 — s. 555
Companies (Court) Rules, 1959 — s. Rule 276, Rule 290
Payment of Gratuity Act

Subjects

liquidation
dividend
workmen
gratuity
secured creditors
Companies Act 1956
Companies (Court) Rules 1959
adjustment of excess payment
notice publication
separate dividend account

Judgment

Digitally
signed by
MEERA 1/3 5-OLR-118-24.DOC
MEERA MAHESH
MAHESH JADHAV
JADHAV Date:
2026.02.21
14:35:54
+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
OFFICIAL LIQUIDATOR REPORT NO. 118 OF 2024
IN
COMPANY PETITION NO. 521 OF 1992

In the matter of the Companies Act
1956
And
In the matter of Garware Nylons Ltd.
(in Liquidation)

Henkel Chemicals (india) Ltd. ...Petitioner

-----
Mr. Anirudh Hariani for Official Liquidator.
Mr. Satyajit Roul, Official Liquidator present.
Mr. J. P.Gautam Deputy Official Liquidator present.
Ms Sana Wasim i/b MZM Legal LLP for ICICI Bank.
Mr. Keshav Borhade for Garware Employees Union.
Mr. B. S. Nayak for workman Pravin Mahadev Dhole.
-----

CORAM : ARIF S. DOCTOR, J.
DATE : 20th FEBRUARY 2026
P.C.

1 The Official Liquidator has filed the present report seeking the following

directions:

(a) In view of paras (6) to (10) of this report, whether this Hon'ble Court
would be pleased to permit the Official Liquidator to withhold the dividend
payment of Mr. Pravin Mahadeo Dhole and Ors., being Applicants in
Company Application No. 823 of 2007, and adjust the same against the
excess amount of Rs.38,03,405.40/-paid to them by the Controlling
Authority under the Gratuity Act, as directed by this Hon'ble Court's order

Meera Jadhav
2/3 5-OLR-118-24.DOC

dated 3rd October 2013 (Exhibit "D" at page 76);

b) In view of the para (13) of this report, whether this Hon'ble Court would
be pleased to permit the Official Liquidator to declare and pay dividend @
2.20% out of sale proceeds of mortgaged properties to Secured creditors
and Workers whose claims are admitted by the Official Liquidator for Rs.
4,31,53,021/-;

c) In view of para (15) of this report, Whether this Hon'ble High Court
would be pleased to permit the Official Liquidator to publish a NOTICE OF
DECLARATION OF DIVIDEND one in English and one Local Language
newspapers in terms of Rule 276 of the Companies (Court) Rules, 1959 in
"Free Press Journal" (English) and "Navshakti" (Marathi) both published
from Mumbai and "Pudhari" (Marathi) published from Pune through an
advertising agency in addition to sending the individual notice to all
workmen and Secured Creditors and the Official Liquidator may also be
permitted to pay advertising charges to Advertising Agency out of the funds
available to the credit of the Company (In Liqn) subject to the deduction of
TDS as applicable;

d) In view of para (16) of this report. Whether this Hon'ble Court would be
pleased to permit the Official Liquidator to open a 'Separate Dividend
Account' with Punjab National Bank, PNB House, Fort, Mumbai with a sum
of Rs. 4,31,53,021/- under Rule 290 of Companies (Court) Rules 1959, for
making payment of dividend to the workmen and Secured Creditors and to
permit the Official Liquidator to make payment of dividend within six
months from the date of passing this report or the date on which the
directions are given by this Hon'ble Court for declaration of dividend and
thereafter to transfer the unpaid / unclaimed balance amount if any, to the
'Companies Liquidation Account' maintained with the Registrar Of
Companies, Maharashtra, Mumbai, as required under the provisions of
Section 555 of the Companies Act, 1956;

2 It is the submission of Mr. Hariani, learned counsel for the Official

Liquidator that 120 workmen of the company in liquidation were approached

the Controlling authority under the provisions of the Gratuity Act as directed by

this Court in its order dated 22 nd January 2008, have already received their

Meera Jadhav
3/3 5-OLR-118-24.DOC

dividend. He thus submits the Official Liquidator now seeks to make payment of

a dividend amount to all other workmen excluding those 120 workmen who

had received their gratuity payment.

3 It is the contention of Mr. Nayak learned counsel for Praveen Mahadeo

Dhole that his client was not part of 120 workmen, who have received the said

gratuity amount. Official Liquidator has a list of those who 120 workment. It is

therefore, clarified that save and except those 120 workmen, the Official

Liquidator shall proceed to make payment of dividend after the adjustment to all

other workmen after due verification.

4 The Official Liquidator Report is accordingly allowed in terms of prayer

clauses (a) to (d) with the express clarification that even though the name of Mr.

Praveen Mahadeo Dhole is mentioned in prayer clause (a), it would not preclude

him from receiving payment, in the event he has not received the payment

earlier.

5 The Official Liquidator Report is accordingly disposed of.

[ARIF S. DOCTOR, J.]

Meera Jadhav

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