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Wednesday, April 20, 2016

Official Liquidator - Powers and Duties

Appointment of Official Liquidator (Sec. 359)
For the purposes of this Act, so far as it relates to the winding up of companies by the Tribunal, the Central Government may appoint as many Official Liquidators, Joint, Deputy or Assistant Official Liquidators as it may consider necessary to discharge the functions of the Official Liquidator. The liquidators so appointed under this section shall be whole-time officers of the Central Government. The salary and other allowances of the Official Liquidator, Joint Official Liquidator, Deputy Official Liquidator and Assistant Official Liquidator shall be paid by the Central Government.

Powers and duties of Company liquidator
Powers and duties of Company Liquidator in case of winding up by tribunal (Sec. 290):
1. Subject to directions by the Tribunal, if any, in this regard, the Company Liquidator, in a winding up of a company by the Tribunal, shall have the power:
a.       to carry on the business of the company so far as may be necessary for the beneficial winding up of the company;
b.      to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose, to use, when necessary, the company’s seal;
c.       to sell the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels;
d.      to sell the whole of the undertaking of the company as a going concern;
e.      to raise any money required on the security of the assets of the company;

f.        to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and on behalf of the company;
g.       to invite and settle claim of creditors, employees or any other claimant and distribute sale proceeds in accordance with priorities established under this Act;
h.      to inspect the records and returns of the company on the files of the Registrar or any other authority;
i.         to prove rank and claim in the insolvency of any contributory for any balance against his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent, and rateably with the other separate creditors;
j.        to draw, accept, make and endorse any negotiable instruments including cheque, bill of exchange, hundi or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if such instruments had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business;
k.       to take out, in his official name, letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases, the money due shall, for the purpose of enabling the Company Liquidator to take out the letters of administration or recover the money, be deemed to be due to the Company Liquidator himself;
l.         to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities and for protection of the assets of the company, appoint an agent to do any business which the Company Liquidator is unable to do himself;
m.    to take all such actions, steps, or to sign, execute and verify any paper, deed, document, application, petition, affidavit, bond or instrument as may be necessary,—
1.       for winding up of the company;
2.       for distribution of assets;
3.       in discharge of his duties and obligations and functions as Company Liquidator; and
n.      to apply to the Tribunal for such orders or directions as may be necessary for the winding up of the company.
2.     The exercise of powers by the Company Liquidator under sub-section (1) shall be subject to the overall control of the Tribunal.
3.     Notwithstanding the provisions of sub-section (1), the Company Liquidator shall perform such other duties as the Tribunal may specify in this behalf.
Powers and duties of Company Liquidator in voluntary winding up (Sec. 314):
1.       The Company Liquidator shall perform such functions and discharge such duties as may be determined from time to time by the company or the creditors, as the case may be.
2.       The Company Liquidator shall settle the list of contributories, which shall be prima facie evidence of the liability of the persons named therein to be contributories.
3.       The Company Liquidator shall call general meetings of the company for the purpose of obtaining the sanction of the company by ordinary or special resolution, as the case may require, or for any other purpose he may consider necessary.
4.       The Company Liquidator shall maintain regular and proper books of account in such form and in such manner as may be prescribed and the members and creditors and any officer authorised by the Central Government may inspect such books of account.
5.       The Company Liquidator shall prepare quarterly statement of accounts in such form and manner as may be prescribed and file such statement of accounts duly audited within thirty days from the close of each quarter with the Registrar, failing which the Company Liquidator shall be punishable with fine which may extend to five thousand rupees for every day during which the failure continues.
6.       The Company Liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.
7.       The Company Liquidator shall observe due care and diligence in the discharge of his duties.
8.       If the Company Liquidator fails to comply with the provisions of this section except sub-section (5) he shall be punishable with fine which may extend to ten lakh rupees.