THE COMPANIES ACT, 2013 CHAPTER XX WINDING UP

CHAPTER XX

WINDING UP

270. (1) The winding up of a company may be either—

(a) by the Tribunal; or

(b) voluntary.

Punishment

for certain

offences.

Bar of

jurisdiction.

Rehabilitation

and

Insolvency

Fund.

Modes of

winding up.

(2) Notwithstanding anything contained in any other Act, the provisions of this Act

with respect to winding up shall apply to the winding up of a company in any of the modes

specified under sub-section (1).

PART I.—Winding up by the Tribunal

271. (1) A company may, on a petition under section 272, be wound up by the Tribunal,—

(a) if the company is unable to pay its debts;

(b) if the company has, by special resolution, resolved that the company be

wound up by the Tribunal;

(c) if the company has acted against the interests of the sovereignty and integrity

of India, the security of the State, friendly relations with foreign States, public order,

decency or morality;

(d) if the Tribunal has ordered the winding up of the company under

Chapter XIX;

(e) if on an application made by the Registrar or any other person authorised

by the Central Government by notification under this Act, the Tribunal is of the

opinion that the affairs of the company have been conducted in a fraudulent manner

or the company was formed for fraudulent and unlawful purpose or the persons

concerned in the formation or management of its affairs have been guilty of fraud,

misfeasance or misconduct in connection therewith and that it is proper that the

company be wound up;

(f) if the company has made a default in filing with the Registrar its financial

statements or annual returns for immediately preceding five consecutive financial

years; or

(g) if the Tribunal is of the opinion that it is just and equitable that the company

should be wound up.

(2) A company shall be deemed to be unable to pay its debts,—

(a) if a creditor, by assignment or otherwise, to whom the company is indebted

for an amount exceeding one lakh rupees then due, has served on the company, by

causing it to be delivered at its registered office, by registered post or otherwise, a

demand requiring the company to pay the amount so due and the company has failed

to pay the sum within twenty-one days after the receipt of such demand or to provide

adequate security or re-structure or compound the debt to the reasonable satisfaction

of the creditor;

(b) if any execution or other process issued on a decree or order of any court or

tribunal in favour of a creditor of the company is returned unsatisfied in whole or in

part; or

(c) if it is proved to the satisfaction of the Tribunal that the company is unable to

pay its debts, and, in determining whether a company is unable to pay its debts, the

Tribunal shall take into account the contingent and prospective liabilities of the

company.

272. (1) Subject to the provisions of this section, a petition to the Tribunal for the

winding up of a company shall be presented by—

(a) the company;

(b) any creditor or creditors, including any contingent or prospective creditor or

creditors;

(c) any contributory or contributories;

Circumstances

in which

company

may be wound

up by

Tribunal.

Petition for

winding up.

(d) all or any of the persons specified in clauses (a), (b) and (c) together;

(e) the Registrar;

(f) any person authorised by the Central Government in that behalf; or

(g) in a case falling under clause (c) of sub-section (1) of section 271, by the

Central Government or a State Government.

(2) A secured creditor, the holder of any debentures, whether or not any trustee or

trustees have been appointed in respect of such and other like debentures, and the trustee

for the holders of debentures shall be deemed to be creditors within the meaning of clause (b)

of sub-section (1).

(3) A contributory shall be entitled to present a petition for the winding up of a company,

notwithstanding that he may be the holder of fully paid-up shares, or that the company may

have no assets at all or may have no surplus assets left for distribution among the shareholders

after the satisfaction of its liabilities, and shares in respect of which he is a contributory or

some of them were either originally allotted to him or have been held by him, and registered

in his name, for at least six months during the eighteen months immediately before the

commencement of the winding up or have devolved on him through the death of a former

holder.

(4) The Registrar shall be entitled to present a petition for winding up under subsection

(1) on any of the grounds specified in sub-section (1) of section 271, except on the

grounds specified in clause (b), clause (d) or clause (g) of that sub-section:

Provided that the Registrar shall not present a petition on the ground that the company

is unable to pay its debts unless it appears to him either from the financial condition of the

company as disclosed in its balance sheet or from the report of an inspector appointed under

section 210 that the company is unable to pay its debts:

Provided further that the Registrar shall obtain the previous sanction of the Central

Government to the presentation of a petition:

Provided also that the Central Government shall not accord its sanction unless the

company has been given a reasonable opportunity of making representations.

(5) A petition presented by the company for winding up before the Tribunal shall be

admitted only if accompanied by a statement of affairs in such form and in such manner as

may be prescribed.

(6) Before a petition for winding up of a company presented by a contingent or

prospective creditor is admitted, the leave of the Tribunal shall be obtained for the admission

of the petition and such leave shall not be granted, unless in the opinion of the Tribunal there

is a prima facie case for the winding up of the company and until such security for costs has

been given as the Tribunal thinks reasonable.

(7) A copy of the petition made under this section shall also be filed with the Registrar

and the Registrar shall, without prejudice to any other provisions, submit his views to the

Tribunal within sixty days of receipt of such petition.

273. (1) The Tribunal may, on receipt of a petition for winding up under section 272

pass any of the following orders, namely:—

(a) dismiss it, with or without costs;

(b) make any interim order as it thinks fit;

(c) appoint a provisional liquidator of the company till the making of a winding

up order;

(d) make an order for the winding up of the company with or without costs; or

(e) any other order as it thinks fit:

Powers of

Tribunal.

Provided that an order under this sub-section shall be made within ninety days from

the date of presentation of the petition:

Provided further that before appointing a provisional liquidator under clause (c), the

Tribunal shall give notice to the company and afford a reasonable opportunity to it to make

its representations, if any, unless for special reasons to be recorded in writing, the Tribunal

thinks fit to dispense with such notice:

Provided also that the Tribunal shall not refuse to make a winding up order on the

ground only that the assets of the company have been mortgaged for an amount equal to or

in excess of those assets, or that the company has no assets.

(2) Where a petition is presented on the ground that it is just and equitable that the

company should be wound up, the Tribunal may refuse to make an order of winding up, if it

is of the opinion that some other remedy is available to the petitioners and that they are

acting unreasonably in seeking to have the company wound up instead of pursuing the

other remedy.

274. (1) Where a petition for winding up is filed before the Tribunal by any person

other than the company, the Tribunal shall, if satisfied that a prima facie case for winding up

of the company is made out, by an order direct the company to file its objections along with

a statement of its affairs within thirty days of the order in such form and in such manner as

may be prescribed:

Provided that the Tribunal may allow a further period of thirty days in a situation of

contingency or special circumstances:

Provided further that the Tribunal may direct the petitioner to deposit such security for

costs as it may consider reasonable as a precondition to issue directions to the company.

(2) A company, which fails to file the statement of affairs as referred to in

sub-section (1), shall forfeit the right to oppose the petition and such directors and officers

of the company as found responsible for such non-compliance, shall be liable for punishment

under sub-section (4).

(3) The directors and other officers of the company, in respect of which an order for

winding up is passed by the Tribunal under clause (d) of sub-section (1) of section 273,

shall, within a period of thirty days of such order, submit, at the cost of the company, the

books of account of the company completed and audited up to the date of the order, to such

liquidator and in the manner specified by the Tribunal.

(4) If any director or officer of the company contravenes the provisions of this section,

the director or the officer of the company who is in default shall be punishable with

imprisonment for a term which may extend to six months or with fine which shall not be less

than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.

(5) The complaint may be filed in this behalf before the Special Court by Registrar,

provisional liquidator, Company Liquidator or any person authorised by the Tribunal.

275. (1) For the purposes of winding up of a company by the Tribunal, the Tribunal at

the time of the passing of the order of winding up, shall appoint an Official Liquidator or a

liquidator from the panel maintained under sub-section (2) as the Company Liquidator.

(2) The provisional liquidator or the Company Liquidator, as the case may be, shall be

appointed from a panel maintained by the Central Government consisting of the names of

chartered accountants, advocates, company secretaries, cost accountants or firms or bodies

corporate having such chartered accountants, advocates, company secretaries, cost

accountants and such other professionals as may be notified by the Central Government or

from a firm or a body corporate of persons having a combination of such professionals as

may be prescribed and having at least ten years’ experience in company matters.

(3) Where a provisional liquidator is appointed by the Tribunal, the Tribunal may limit

and restrict his powers by the order appointing him or it or by a subsequent order, but

otherwise he shall have the same powers as a liquidator.

(4) The Central Government may remove the name of any person or firm or body

Directions for

filing

statement of

affairs.

Company

Liquidators

and their

appointments.

corporate from the panel maintained under sub-section (2) on the grounds of misconduct,

fraud, misfeasance, breach of duties or professional incompetence:

Provided that the Central Government before removing him or it from the panel shall

give him or it a reasonable opportunity of being heard.

(5) The terms and conditions of appointment of a provisional liquidator or Company

Liquidator and the fee payable to him or it shall be specified by the Tribunal on the basis of

task required to be performed, experience, qualification of such liquidator and size of the

company.

(6) On appointment as provisional liquidator or Company Liquidator, as the case may

be, such liquidator shall file a declaration within seven days from the date of appointment in

the prescribed form disclosing conflict of interest or lack of independence in respect of his

appointment, if any, with the Tribunal and such obligation shall continue throughout the

term of his appointment.

(7) While passing a winding up order, the Tribunal may appoint a provisional liquidator,

if any, appointed under clause (c) of sub-section (1) of section 273, as the Company Liquidator

for the conduct of the proceedings for the winding up of the company.

276. (1) The Tribunal may, on a reasonable cause being shown and for reasons to be

recorded in writing, remove the provisional liquidator or the Company Liquidator, as the case

may be, as liquidator of the company on any of the following grounds, namely:—

(a) misconduct;

(b) fraud or misfeasance;

(c) professional incompetence or failure to exercise due care and diligence in

performance of the powers and functions;

(d) inability to act as provisional liquidator or as the case may be, Company

Liquidator;

(e) conflict of interest or lack of independence during the term of his appointment

that would justify removal.

(2) In the event of death, resignation or removal of the provisional liquidator or as the

case may be, Company Liquidator, the Tribunal may transfer the work assigned to him or it

to another Company Liquidator for reasons to be recorded in writing.

(3) Where the Tribunal is of the opinion that any liquidator is responsible for causing

any loss or damage to the company due to fraud or misfeasance or failure to exercise due care

and diligence in the performance of his or its powers and functions, the Tribunal may recover

or cause to be recovered such loss or damage from the liquidator and pass such other orders

as it may think fit.

(4) The Tribunal shall, before passing any order under this section, provide a reasonable

opportunity of being heard to the provisional liquidator or, as the case may be, Company

Liquidator.

277. (1) Where the Tribunal makes an order for appointment of provisional liquidator

or for the winding up of a company, it shall, within a period not exceeding seven days from

the date of passing of the order, cause intimation thereof to be sent to the Company Liquidator

or provisional liquidator, as the case may be, and the Registrar.

(2) On receipt of the copy of order of appointment of provisional liquidator or winding

up order, the Registrar shall make an endorsement to that effect in his records relating to the

company and notify in the Official Gazette that such an order has been made and in the case

of a listed company, the Registrar shall intimate about such appointment or order, as the case

may be, to the stock exchange or exchanges where the securities of the company are listed.

(3) The winding up order shall be deemed to be a notice of discharge to the officers,

employees and workmen of the company, except when the business of the company is

continued.

Intimation to

Company

Liquidator,

provisional

liquidator and

Registrar.

Removal and

replacement

of liquidator.

(4) Within three weeks from the date of passing of winding up order, the Company

Liquidator shall make an application to the Tribunal for constitution of a winding up committee

to assist and monitor the progress of liquidation proceedings by the Company Liquidator in

carrying out the function as provided in sub-section (5) and such winding up committee

shall comprise of the following persons, namely:—

(i) Official Liquidator attached to the Tribunal;

(ii) nominee of secured creditors; and

(iii) a professional nominated by the Tribunal.

(5) The Company Liquidator shall be the convener of the meetings of the winding up

committee which shall assist and monitor the liquidation proceedings in following areas of

liquidation functions, namely:—

(i) taking over assets;

(ii) examination of the statement of affairs;

(iii) recovery of property, cash or any other assets of the company including

benefits derived therefrom;

(iv) review of audit reports and accounts of the company;

(v) sale of assets;

(vi) finalisation of list of creditors and contributories;

(vii) compromise, abandonment and settlement of claims;

(viii) payment of dividends, if any; and

(ix) any other function, as the Tribunal may direct from time to time.

(6) The Company Liquidator shall place before the Tribunal a report along with minutes

of the meetings of the committee on monthly basis duly signed by the members present in

the meeting for consideration till the final report for dissolution of the company is submitted

before the Tribunal.

(7) The Company Liquidator shall prepare the draft final report for consideration and

approval of the winding up committee.

(8) The final report so approved by the winding up committee shall be submitted by

the Company Liquidator before the Tribunal for passing of a dissolution order in respect of

the company.

278. The order for the winding up of a company shall operate in favour of all the

creditors and all contributories of the company as if it had been made out on the joint petition

of creditors and contributories.

279. (1) When a winding up order has been passed or a provisional liquidator has

been appointed, no suit or other legal proceeding shall be commenced, or if pending at the

date of the winding up order, shall be proceeded with, by or against the company, except with

the leave of the Tribunal and subject to such terms as the Tribunal may impose:

Provided that any application to the Tribunal seeking leave under this section shall be

disposed of by the Tribunal within sixty days.

(2) Nothing in sub-section (1) shall apply to any proceeding pending in appeal before

the Supreme Court or a High Court.

Effect of

winding up

order.

Stay of suits,

etc., on

winding up

order.

280. The Tribunal shall, notwithstanding anything contained in any other law for the

time being in force, have jurisdiction to entertain, or dispose of,—

(a) any suit or proceeding by or against the company;

(b) any claim made by or against the company, including claims by or against

any of its branches in India;

(c) any application made under section 233;

(d) any scheme submitted under section 262;

(e) any question of priorities or any other question whatsoever, whether of law

or facts, including those relating to assets, business, actions, rights, entitlements,

privileges, benefits, duties, responsibilities, obligations or in any matter arising out of,

or in relation to winding up of the company,

whether such suit or proceeding has been instituted, or is instituted, or such claim or question

has arisen or arises or such application has been made or is made or such scheme has been

submitted, or is submitted, before or after the order for the winding up of the company is made.

281. (1) Where the Tribunal has made a winding up order or appointed a Company

Liquidator, such liquidator shall, within sixty days from the order, submit to the Tribunal, a

report containing the following particulars, namely:—

(a) the nature and details of the assets of the company including their location

and value, stating separately the cash balance in hand and in the bank, if any, and the

negotiable securities, if any, held by the company:

Provided that the valuation of the assets shall be obtained from registered valuers

for this purpose;

(b) amount of capital issued, subscribed and paid-up;

(c) the existing and contingent liabilities of the company including names,

addresses and occupations of its creditors, stating separately the amount of secured

and unsecured debts, and in the case of secured debts, particulars of the securities

given, whether by the company or an officer thereof, their value and the dates on

which they were given;

(d) the debts due to the company and the names, addresses and occupations of

the persons from whom they are due and the amount likely to be realised on account

thereof;

(e) guarantees, if any, extended by the company;

(f) list of contributories and dues, if any, payable by them and details of any

unpaid call;

(g) details of trade marks and intellectual properties, if any, owned by the

company;

(h) details of subsisting contracts, joint ventures and collaborations, if any;

(i) details of holding and subsidiary companies, if any;

(j) details of legal cases filed by or against the company; and

(k) any other information which the Tribunal may direct or the Company

Liquidator may consider necessary to include.

(2) The Company Liquidator shall include in his report the manner in which the company

was promoted or formed and whether in his opinion any fraud has been committed by any

person in its promotion or formation or by any officer of the company in relation to the

company since the formation thereof and any other matters which, in his opinion, it is

desirable to bring to the notice of the Tribunal.

Jurisdiction

of Tribunal.

Submission of

report by

Company

Liquidator.

(3) The Company Liquidator shall also make a report on the viability of the business of

the company or the steps which, in his opinion, are necessary for maximising the value of the

assets of the company.

(4) The Company Liquidator may also, if he thinks fit, make any further report or

reports.

(5) Any person describing himself in writing to be a creditor or a contributory of the

company shall be entitled by himself or by his agent at all reasonable times to inspect the

report submitted in accordance with this section and take copies thereof or extracts therefrom

on payment of the prescribed fees.

282. (1) The Tribunal shall, on consideration of the report of the Company Liquidator,

fix a time limit within which the entire proceedings shall be completed and the company be

dissolved:

Provided that the Tribunal may, if it is of the opinion, at any stage of the proceedings,

or on examination of the reports submitted to it by the Company Liquidator and after hearing

the Company Liquidator, creditors or contributories or any other interested person,

that it will not be advantageous or economical to continue the proceedings, revise the time

limit within which the entire proceedings shall be completed and the company

be dissolved.

(2) The Tribunal may, on examination of the reports submitted to it by the Company

Liquidator and after hearing the Company Liquidator, creditors or contributories or any other

interested person, order sale of the company as a going concern or its assets or

part thereof:

Provided that the Tribunal may, where it considers fit, appoint a sale committee

comprising such creditors, promoters and officers of the company as the Tribunal may

decide to assist the Company Liquidator in sale under this sub-section.

(3) Where a report is received from the Company Liquidator or the Central Government

or any person that a fraud has been committed in respect of the company, the Tribunal shall,

without prejudice to the process of winding up, order for investigation under section 210,

and on consideration of the report of such investigation it may pass order and give directions

under sections 339 to 342 or direct the Company Liquidator to file a criminal complaint

against persons who were involved in the commission of fraud.

(4) The Tribunal may order for taking such steps and measures, as may be necessary,

to protect, preserve or enhance the value of the assets of the company.

(5) The Tribunal may pass such other order or give such other directions as it considers

fit.

283. (1) Where a winding up order has been made or where a provisional liquidator has

been appointed, the Company Liquidator or the provisional liquidator, as the case may be,

shall, on the order of the Tribunal, forthwith take into his or its custody or control all the

property, effects and actionable claims to which the company is or appears to be entitled to

and take such steps and measures, as may be necessary, to protect and preserve the properties

of the company.

(2) Notwithstanding anything contained in sub-section (1), all the property and effects

of the company shall be deemed to be in the custody of the Tribunal from the date of the

order for the winding up of the company.

(3) On an application by the Company Liquidator or otherwise, the Tribunal may, at

any time after the making of a winding up order, require any contributory for the time being

on the list of contributories, and any trustee, receiver, banker, agent, officer or other employee

of the company, to pay, deliver, surrender or transfer forthwith, or within such time as the

Directions of

Tribunal on

report of

Company

Liquidator.

Custody of

company's

properties.

Tribunal directs, to the Company Liquidator, any money, property or books and papers in his

custody or under his control to which the company is or appears to be entitled.

284. (1) The promoters, directors, officers and employees, who are or have been in

employment of the company or acting or associated with the company shall extend full

cooperation to the Company Liquidator in discharge of his functions and duties.

(2) Where any person, without reasonable cause, fails to discharge his obligations

under sub-section (1), he shall be punishable with imprisonment which may extend to six

months or with fine which may extend to fifty thousand rupees, or with both.

285. (1) As soon as may be after the passing of a winding up order by the Tribunal, the

Tribunal shall settle a list of contributories, cause rectification of register of members in all

cases where rectification is required in pursuance of this Act and shall cause the assets of

the company to be applied for the discharge of its liability:

Provided that where it appears to the Tribunal that it would not be necessary to make

calls on or adjust the rights of contributories, the Tribunal may dispense with the settlement

of a list of contributories.

(2) In settling the list of contributories, the Tribunal shall distinguish between those

who are contributories in their own right and those who are contributories as being

representatives of, or liable for the debts of, others.

(3) While settling the list of contributories, the Tribunal shall include every person,

who is or has been a member, who shall be liable to contribute to the assets of the company

an amount sufficient for payment of the debts and liabilities and the costs, charges and

expenses of winding up, and for the adjustment of the rights of the contributories among

themselves, subject to the following conditions, namely:—

(a) a person who has been a member shall not be liable to contribute if he has

ceased to be a member for the preceding one year or more before the commencement of

the winding up;

(b) a person who has been a member shall not be liable to contribute in respect

of any debt or liability of the company contracted after he ceased to be a member;

(c) no person who has been a member shall be liable to contribute unless it

appears to the Tribunal that the present members are unable to satisfy the contributions

required to be made by them in pursuance of this Act;

(d) in the case of a company limited by shares, no contribution shall be required

from any person, who is or has been a member exceeding the amount, if any, unpaid on

the shares in respect of which he is liable as such member;

(e) in the case of a company limited by guarantee, no contribution shall be

required from any person, who is or has been a member exceeding the amount undertaken

to be contributed by him to the assets of the company in the event of its being wound

up but if the company has a share capital, such member shall be liable to contribute to

the extent of any sum unpaid on any shares held by him as if the company were a

company limited by shares.

286. In the case of a limited company, any person who is or has been a director or

manager, whose liability is unlimited under the provisions of this Act, shall, in addition to his

liability, if any, to contribute as an ordinary member, be liable to make a further contribution

as if he were at the commencement of winding up, a member of an unlimited company:

Provided that —

(a) a person who has been a director or manager shall not be liable to make such

further contribution, if he has ceased to hold office for a year or upwards before the

commencement of the winding up;

Obligations

of directors

and

managers.

Promoters,

directors,

etc., to

cooperate

with

Company

Liquidator.

Settlement of

list of

contributories

and

application of

assets.

(b) a person who has been a director or manager shall not be liable to make such

further contribution in respect of any debt or liability of the company contracted after

he ceased to hold office;

(c) subject to the articles of the company, a director or manager shall not be liable

to make such further contribution unless the Tribunal deems it necessary to require

the contribution in order to satisfy the debts and liabilities of the company, and the

costs, charges and expenses of the winding up.

287. (1) The Tribunal may, while passing an order of winding up of a company, direct

that there shall be, an advisory committee to advise the Company Liquidator and to report to

the Tribunal on such matters as the Tribunal may direct.

(2) The advisory committee appointed by the Tribunal shall consist of not more than

twelve members, being creditors and contributories of the company or such other persons in

such proportion as the Tribunal may, keeping in view the circumstances of the company

under liquidation, direct.

(3) The Company Liquidator shall convene a meeting of creditors and contributories,

as ascertained from the books and documents, of the company within thirty days from the

date of order of winding up for enabling the Tribunal to determine the persons who may be

members of the advisory committee.

(4) The advisory committee shall have the right to inspect the books of account and

other documents, assets and properties of the company under liquidation at a reasonable

time.

(5) The provisions relating to the convening of the meetings, the procedure to be

followed thereat and other matters relating to conduct of business by the advisory committee

shall be such as may be prescribed.

(6) The meeting of advisory committee shall be chaired by the Company Liquidator.

288. (1) The Company Liquidator shall make periodical reports to the Tribunal and in

any case make a report at the end of each quarter with respect to the progress of the winding

up of the company in such form and manner as may be prescribed.

(2) The Tribunal may, on an application by the Company Liquidator, review the orders

made by it and make such modifications as it thinks fit.

289. (1) The Tribunal may, at any time after making a winding up order, on an application

of promoter, shareholders or creditors or any other interested person, if satisfied, make an

order that it is just and fair that an opportunity to revive and rehabilitate the company be

provided staying the proceedings for such time but not exceeding one hundred and eighty

days and on such terms and conditions as it thinks fit:

Provided that an order under this sub-section shall be made by the Tribunal only when

the application is accompanied with a scheme for rehabilitation.

(2) The Tribunal may, while passing the order under sub-section (1), require the applicant

to furnish such security as to costs as it considers fit.

(3) Where an order under sub-section (1) is passed by the Tribunal, the provisions of Chapter XIX shall be followed in respect of the consideration and sanction of the scheme of

revival of the company.

(4) Without prejudice to the provisions of sub-section (1), the Tribunal may at any

time after making a winding up order, on an application of the Company Liquidator, make

an order staying the winding up proceedings or any part thereof, for such time and on such

terms and conditions as it thinks fit.

(5) The Tribunal may, before making an order, under this section, require the Company

Liquidator to furnish to it a report with respect to any facts or matters which are in his opinion

relevant to the application.

Submission of

periodical

reports to

Tribunal.

Power of

Tribunal on

application

for stay of

winding up.

Advisory

committee.

(6) A copy of every order made under this section shall forthwith be forwarded by the

Company Liquidator to the Registrar who shall make an endorsement of the order in his

books and records relating to the company.

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,—

(i) for winding up of the company;

(ii) for distribution of assets;

Powers and

duties of

Company

Liquidator.

(iii) 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.

291. (1) The Company Liquidator may, with the sanction of the Tribunal, appoint one

or more chartered accountants or company secretaries or cost accountants or legal

practitioners or such other professionals on such terms and conditions, as may be necessary,

to assist him in the performance of his duties and functions under this Act.

(2) Any person appointed under this section shall disclose forthwith to the Tribunal in

the prescribed form any conflict of interest or lack of independence in respect of his

appointment.

292. (1) Subject to the provisions of this Act, the Company Liquidator shall, in the

administration of the assets of the company and the distribution thereof among its creditors,

have regard to any directions which may be given by the resolution of the creditors or

contributories at any general meeting or by the advisory committee.

(2) Any directions given by the creditors or contributories at any general meeting

shall, in case of conflict, be deemed to override any directions given by the advisory

committee.

(3) The Company Liquidator—

(a) may summon meetings of the creditors or contributories, whenever he thinks

fit, for the purpose of ascertaining their wishes; and

(b) shall summon such meetings at such times, as the creditors or contributories,

as the case may be, may, by resolution, direct, or whenever requested in writing to do

so by not less than one-tenth in value of the creditors or contributories, as the case

may be.

(4) Any person aggrieved by any act or decision of the Company Liquidator may apply

to the Tribunal, and the Tribunal may confirm, reverse or modify the act or decision complained

of and make such further order as it thinks just and proper in the circumstances.

293. (1) The Company Liquidator shall keep proper books in such manner, as may be

prescribed, in which he shall cause entries or minutes to be made of proceedings at meetings

and of such other matters as may be prescribed.

(2) Any creditor or contributory may, subject to the control of the Tribunal, inspect

any such books, personally or through his agent.

294. (1) The Company Liquidator shall maintain proper and regular books of account

including accounts of receipts and payments made by him in such form and manner as may

be prescribed.

(2) The Company Liquidator shall, at such times as may be prescribed but not less than

twice in each year during his tenure of office, present to the Tribunal an account of the

receipts and payments as such liquidator in the prescribed form in duplicate, which shall be

verified by a declaration in such form and manner as may be prescribed.

(3) The Tribunal shall cause the accounts to be audited in such manner as it thinks fit,

and for the purpose of the audit, the Company Liquidator shall furnish to the Tribunal with

such vouchers and information as the Tribunal may require, and the Tribunal may, at any

Exercise and

control of

Company

Liquidator's

powers.

Books to be

kept by

Company

Liquidator.

Audit of

Company

Liquidator's

accounts.

Provision for

professional

assistance to

Company

Liquidator.

time, require the production of, and inspect, any books of account kept by the Company

Liquidator.

(4) When the accounts of the company have been audited, one copy thereof shall be

filed by the Company Liquidator with the Tribunal, and the other copy shall be delivered to

the Registrar which shall be open to inspection by any creditor, contributory or person

interested.

(5) Where an account referred to in sub-section (4) relates to a Government company,

the Company Liquidator shall forward a copy thereof—

(a) to the Central Government, if that Government is a member of the Government

company; or

(b) to any State Government, if that Government is a member of the Government

company; or

(c) to the Central Government and any State Government, if both the Governments

are members of the Government company.

(6) The Company Liquidator shall cause the accounts when audited, or a summary

thereof, to be printed, and shall send a printed copy of the accounts or summary thereof by

post to every creditor and every contributory:

Provided that the Tribunal may dispense with the compliance of the provisions of this

sub-section in any case it deems fit.

295. (1) The Tribunal may, at any time after passing of a winding up order, pass an

order requiring any contributory for the time being on the list of contributories to pay, in the

manner directed by the order, any money due to the company, from him or from the estate of

the person whom he represents, exclusive of any money payable by him or the estate by

virtue of any call in pursuance of this Act.

(2) The Tribunal, in making an order, under sub-section (1), may,—

(a) in the case of an unlimited company, allow to the contributory, by way of setoff,

any money due to him or to the estate which he represents, from the company, on

any independent dealing or contract with the company, but not any money due to him

as a member of the company in respect of any dividend or profit; and

(b) in the case of a limited company, allow to any director or manager whose

liability is unlimited, or to his estate, such set-off.

(3) In the case of any company, whether limited or unlimited, when all the creditors

have been paid in full, any money due on any account whatever to a contributory from the

company may be allowed to him by way of set-off against any subsequent call.

296. The Tribunal may, at any time after the passing of a winding up order, and either

before or after it has ascertained the sufficiency of the assets of the company,—

(a) make calls on all or any of the contributories for the time being on the list of

the contributories, to the extent of their liability, for payment of any money which the

Tribunal considers necessary to satisfy the debts and liabilities of the company, and

the costs, charges and expenses of winding up, and for the adjustment of the rights of

the contributories among themselves; and

(b) make an order for payment of any calls so made.

297. The Tribunal shall adjust the rights of the contributories among themselves and

distribute any surplus among the persons entitled thereto.

298. The Tribunal may, in the event of the assets of a company being insufficient to

satisfy its liabilities, make an order for the payment out of the assets, of the costs, charges

Payment of

debts by

contributory

and extent of

set-off.

Adjustment

of rights of

contributories.

Power of

Tribunal to

make calls.

Power to

order costs.

and expenses incurred in the winding up, in such order of priority inter se as the Tribunal

thinks just and proper.

299. (1) The Tribunal may, at any time after the appointment of a provisional liquidator

or the passing of a winding up order, summon before it any officer of the company or person

known or suspected to have in his possession any property or books or papers, of the

company, or known or suspected to be indebted to the company, or any person whom the

Tribunal thinks to be capable of giving information concerning the promotion, formation,

trade, dealings, property, books or papers, or affairs of the company.

(2) The Tribunal may examine any officer or person so summoned on oath concerning

the matters aforesaid, either by word of mouth or on written interrogatories or on affidavit

and may, in the first case, reduce his answers to writing and require him to sign them.

(3) The Tribunal may require any officer or person so summoned to produce any

books and papers relating to the company in his custody or power, but, where he claims any

lien on books or papers produced by him, the production shall be without prejudice to such

lien, and the Tribunal shall have power to determine all questions relating to that lien.

(4) The Tribunal may direct the liquidator to file before it a report in respect of debt or

property of the company in possession of other persons.

(5) If the Tribunal finds that—

(a) a person is indebted to the company, the Tribunal may order him to pay to the

provisional liquidator or, as the case may be, the liquidator at such time and in such

manner as the Tribunal may consider just, the amount in which he is indebted, or any

part thereof, either in full discharge of the whole amount or not, as the Tribunal thinks

fit, with or without costs of the examination;

(b) a person is in possession of any property belonging to the company, the

Tribunal may order him to deliver to the provisional liquidator or, as the case may be,

the liquidator, that property or any part thereof, at such time, in such manner and on

such terms as the Tribunal may consider just.

(6) If any officer or person so summoned fails to appear before the Tribunal at the time

appointed without a reasonable cause, the Tribunal may impose an appropriate cost.

(7) Every order made under sub-section (5) shall be executed in the same manner as

decrees for the payment of money or for the delivery of property under the Code of Civil

Procedure, 1908.

(8) Any person making any payment or delivery in pursuance of an order made under

sub-section (5) shall by such payment or delivery be, unless otherwise directed by such

order, discharged from all liability whatsoever in respect of such debt or property.

300. (1) Where an order has been made for the winding up of a company by the

Tribunal, and the Company Liquidator has made a report to the Tribunal under this Act,

stating that in his opinion a fraud has been committed by any person in the promotion,

formation, business or conduct of affairs of the company since its formation, the Tribunal

may, after considering the report, direct that such person or officer shall attend before the

Tribunal on a day appointed by it for that purpose, and be examined as to the promotion or

formation or the conduct of the business of the company or as to his conduct and dealings

as an officer thereof.

(2) The Company Liquidator shall take part in the examination, and for that purpose he

or it may, if specially authorised by the Tribunal in that behalf, employ such legal assistance

as may be sanctioned by the Tribunal.

(3) The person shall be examined on oath and shall answer all such questions as the

Tribunal may put, or allow to be put, to him.

Power to

order

examination

of promoters,

directors, etc.

5 of 1908.

Power to

summon

persons

suspected of

having

property of

company,

etc.

(4) A person ordered to be examined under this section—

(a) shall, before his examination, be furnished at his own cost with a copy of the

report of the Company Liquidator; and

(b) may at his own cost employ chartered accountants or company secretaries or

cost accountants or legal practitioners entitled to appear before the Tribunal under

section 432, who shall be at liberty to put to him such questions as the Tribunal may

consider just for the purpose of enabling him to explain or qualify any answers given

by him.

(5) If any such person applies to the Tribunal to be exculpated from any charges made

or suggested against him, it shall be the duty of the Company Liquidator to appear on the

hearing of such application and call the attention of the Tribunal to any matters which appear

to the Company Liquidator to be relevant.

(6) If the Tribunal, after considering any evidence given or hearing witnesses called by

the Company Liquidator, allows the application made under sub-section (5), the Tribunal

may order payment to the applicant of such costs as it may think fit.

(7) Notes of the examination shall be taken down in writing, and shall be read over to

or by, and signed by, the person examined, a copy be supplied to him and may thereafter be

used in evidence against him, and shall be open to inspection by any creditor or contributory

at all reasonable times.

(8) The Tribunal may, if it thinks fit, adjourn the examination from time to time.

(9) An examination under this section may, if the Tribunal so directs, be held before

any person or authority authorised by the Tribunal.

(10) The powers of the Tribunal under this section as to the conduct of the examination,

but not as to costs, may be exercised by the person or authority before whom the examination

is held in pursuance of sub-section (9).

301. At any time either before or after passing a winding up order, if the Tribunal is

satisfied that a contributory or a person having property, accounts or papers of the company

in his possession is about to leave India or otherwise to abscond, or is about to remove or

conceal any of his property, for the purpose of evading payment of calls or of avoiding

examination respecting the affairs of the company, the Tribunal may cause—

(a) the contributory to be detained until such time as the Tribunal may order; and

(b) his books and papers and movable property to be seized and safely kept until such

time as the Tribunal may order.

302. (1) When the affairs of a company have been completely wound up, the Company

Liquidator shall make an application to the Tribunal for dissolution of such company.

(2) The Tribunal shall on an application filed by the Company Liquidator under

sub-section (1) or when the Tribunal is of the opinion that it is just and reasonable in the

circumstances of the case that an order for the dissolution of the company should be made,

make an order that the company be dissolved from the date of the order, and the company

shall be dissolved accordingly.

(3) A copy of the order shall, within thirty days from the date thereof, be forwarded by

the Company Liquidator to the Registrar who shall record in the register relating to the

company a minute of the dissolution of the company.

(4) If the Company Liquidator makes a default in forwarding a copy of the order within

the period specified in sub-section (3), the Company Liquidator shall be punishable with fine

which may extend to five thousand rupees for every day during which the default continues.

Arrest of

person trying

to leave India

or abscond.

Dissolution of

company by

Tribunal.

303. Nothing in this Chapter shall affect the operation or enforcement of any order

made by any Court in any proceedings for the winding up of a company immediately before

the commencement of this Act and an appeal against such order shall be filed before such

authority competent to hear such appeals before such commencement.

PART II.—Voluntary winding up

304. A company may be wound up voluntarily,—

(a) if the company in general meeting passes a resolution requiring the company

to be wound up voluntarily as a result of the expiry of the period for its duration, if any,

fixed by its articles or on the occurrence of any event in respect of which the articles

provide that the company should be dissolved; or

(b) if the company passes a special resolution that the company be wound up

voluntarily.

305. (1) Where it is proposed to wind up a company voluntarily, its director or directors,

or in case the company has more than two directors, the majority of its directors, shall, at a

meeting of the Board, make a declaration verified by an affidavit to the effect that they have

made a full inquiry into the affairs of the company and they have formed an opinion that the

company has no debt or whether it will be able to pay its debts in full from the proceeds of

assets sold in voluntary winding up.

(2) A declaration made under sub-section (1) shall have no effect for the purposes of

this Act, unless—

(a) it is made within five weeks immediately preceding the date of the passing of

the resolution for winding up the company and it is delivered to the Registrar for

registration before that date;

(b) it contains a declaration that the company is not being wound up to defraud

any person or persons;

(c) it is accompanied by a copy of the report of the auditors of the company

prepared in accordance with the provisions of this Act, on the profit and loss account

of the company for the period commencing from the date up to which the last such

account was prepared and ending with the latest practicable date immediately before

the making of the declaration and the balance sheet of the company made out as on

that date which would also contain a statement of the assets and liabilities of the

company on that date; and

(d) where there are any assets of the company, it is accompanied by a report of

the valuation of the assets of the company prepared by a registered valuer.

(3) Where the company is wound up in pursuance of a resolution passed within a

period of five weeks after the making of the declaration, but its debts are not paid or provided

for in full, it shall be presumed, until the contrary is shown, that the director or directors did

not have reasonable grounds for his or their opinion under sub-section (1).

(4) Any director of a company making a declaration under this section without having

reasonable grounds for the opinion that the company will be able to pay its debts in full from

the proceeds of assets sold in voluntary winding up shall be punishable with imprisonment

for a term which shall not be less than three years but which may extend to five years or with

fine which shall not be less than fifty thousand rupees but which may extend to three lakh

rupees, or with both.

306. (1) The company shall along with the calling of meeting of the company at which

the resolution for the voluntary winding up is to be proposed, cause a meeting of its creditors

either on the same day or on the next day and shall cause a notice of such meeting to be sent

Declaration

of solvency in

case of

proposal to

wind up

voluntarily.

Meeting of

creditors.

Appeals from

orders made

before

commencement

of Act.

Circumstances

in which

company may

be wound up

voluntarily.

by registered post to the creditors with the notice of the meeting of the company under

section 304.

(2) The Board of Directors of the company shall—

(a) cause to be presented a full statement of the position of the affairs of the

company together with a list of creditors of the company, if any, copy of declaration

under section 305 and the estimated amount of the claims before such meeting; and

(b) appoint one of the directors to preside at the meeting.

(3) Where two-thirds in value of creditors of the company are of the opinion that—

(a) it is in the interest of all parties that the company be wound up voluntarily,

the company shall be wound up voluntarily; or

(b) the company may not be able to pay for its debts in full from the proceeds of

assets sold in voluntary winding up and pass a resolution that it shall be in the interest

of all parties if the company is wound up by the Tribunal in accordance with the

provisions of Part I of this Chapter, the company shall within fourteen days thereafter

file an application before the Tribunal.

(4) The notice of any resolution passed at a meeting of creditors in pursuance of this

section shall be given by the company to the Registrar within ten days of the passing

thereof.

(5) If a company contravenes the provisions of this section, the company shall be

punishable with fine which shall not be less than fifty thousand rupees but which may

extend to two lakh rupees and the director of the company who is in default shall be punishable

with imprisonment for a term which may extend to six months or with fine which shall not be

less than fifty thousand rupees but which may extend to two lakh rupees, or with both.

307. (1) Where a company has passed a resolution for voluntary winding up and a

resolution under sub-section (3) of section 306 is passed, it shall within fourteen days of the

passing of the resolution give notice of the resolution by advertisement in the Official

Gazette and also in a newspaper which is in circulation in the district where the registered

office or the principal office of the company is situate.

(2) If a company contravenes the provisions of sub-section (1), the company and

every officer of the company who is in default shall be punishable with fine which may

extend to five thousand rupees for every day during which such default continues.

308. A voluntary winding up shall be deemed to commence on the date of passing of

the resolution for voluntary winding up under section 304.

309. In the case of a voluntary winding up, the company shall from the commencement

of the winding up cease to carry on its business except as far as required for the beneficial

winding up of its business:

Provided that the corporate state and corporate powers of the company shall continue

until it is dissolved.

310. (1) The company in its general meeting, where a resolution of voluntary winding

up is passed, shall appoint a Company Liquidator from the panel prepared by the Central

Government for the purpose of winding up its affairs and distributing the assets of the

company and recommend the fee to be paid to the Company Liquidator.

(2) Where the creditors have passed a resolution for winding up the company under

sub-section (3) of section 306, the appointment of the Company Liquidator under this section

shall be effective only after it is approved by the majority of creditors in value of the company:

Provided that where such creditors do not approve the appointment of such Company

Liquidator, creditors shall appoint another Company Liquidator.

Publication

of resolution

to wind up

voluntarily.

Commencement

of voluntary

winding up.

Appointment

of Company

Liquidator.

Effect of

voluntary

winding up.

(3) The creditors while approving the appointment of Company Liquidator appointed

by the company or appointing the Company Liquidator of their own choice, as the case may

be, pass suitable resolution with regard to the fee of the Company Liquidator.

(4) On appointment as Company Liquidator, such liquidator shall file a declaration in

the prescribed form within seven days of the date of appointment disclosing conflict of

interest or lack of independence in respect of his appointment, if any, with the company and the creditors and such obligation shall continue throughout the term of his or its appointment.

311. (1) A Company Liquidator appointed under section 310 may be removed by the

company where his appointment has been made by the company and, by the creditors,

where the appointment is approved or made by such creditors.

(2) Where a Company Liquidator is sought to be removed under this section, he shall

be given a notice in writing stating the grounds of removal from his office by the company or

the creditors, as the case may be.

(3) Where three-fourth members of the company or three-fourth of creditors in value,

as the case may be, after consideration of the reply, if any, filed by the Company Liquidator,

in their meeting decide to remove the Company Liquidator, he shall vacate his office.

(4) If a vacancy occurs by death, resignation, removal or otherwise in the office of any

Company Liquidator appointed under section 310, the company or the creditors, as the case

may be, fill the vacancy in the manner specified in that section.

312. (1) The company shall give notice to the Registrar of the appointment of a

Company Liquidator along with the name and particulars of the Company Liquidator, of

every vacancy occurring in the office of Company Liquidator, and of the name of the Company

Liquidator appointed to fill every such vacancy within ten days of such appointment or the

occurrence of such vacancy.

(2) If a company contravenes the provisions of sub-section (1), the company and

every officer of the company who is in default shall be punishable with fine which may

extend to five hundred rupees for every day during which such default continues.

313. On the appointment of a Company Liquidator, all the powers of the Board of

Directors and of the managing or whole-time directors and manager, if any, shall cease,

except for the purpose of giving notice of such appointment of the Company Liquidator to

the Registrar.

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.

Power to

remove and

fill vacancy

of Company

Liquidator.

Notice of

appointment

of Company

Liquidator to

be given to

Registrar.

Cesser of

Board's

powers on

appointment

of Company

Liquidator.

Powers and

duties of

Company

Liquidator in

voluntary

winding up.

(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.

315. Where there are no creditors of a company, such company in its general meeting

and, where a meeting of creditors is held under section 306, such creditors, as the case may

be, may appoint such committees as considered appropriate to supervise the voluntary

liquidation and assist the Company Liquidator in discharging his or its functions.

316. (1) The Company Liquidator shall report quarterly on the progress of winding up

of the company in such form and in such manner as may be prescribed to the members and

creditors and shall also call a meeting of the members and the creditors as and when necessary

but at least one meeting each of creditors and members in every quarter and apprise them of

the progress of the winding up of the company in such form and in such manner as may be

prescribed.

(2) If the Company Liquidator fails to comply with the provisions of sub-section (1), he

shall be punishable, in respect of each such failure, with fine which may extend to ten lakh

rupees.

317. (1) Where the Company Liquidator is of the opinion that a fraud has been committed

by any person in respect of the company, he shall immediately make a report to the Tribunal

and the Tribunal shall, without prejudice to the process of winding up, order for investigation

under section 210 and on consideration of the report of such investigation, the Tribunal may

pass such order and give such directions under this Chapter as it may consider necessary

including the direction that such person shall attend before the Tribunal on a day appointed

by it for that purpose and be examined as to the promotion or formation or the conduct of the

business of the company or as to his conduct and dealings as officer thereof or otherwise.

(2) The provisions of section 300 shall mutatis mutandis apply in relation to any

examination directed under sub-section (1).

318. (1) As soon as the affairs of a company are fully wound up, the Company

Liquidator shall prepare a report of the winding up showing that the property and assets of

the company have been disposed of and its debt fully discharged or discharged to the

satisfaction of the creditors and thereafter call a general meeting of the company for the

purpose of laying the final winding up accounts before it and giving any explanation therefor.

(2) The meeting referred to in sub-section (1) shall be called by the Company Liquidator

in such form and manner as may be prescribed.

(3) If the majority of the members of the company after considering the report of the

Company Liquidator are satisfied that the company shall be wound up, they may pass a

resolution for its dissolution.

(4) Within two weeks after the meeting, the Company Liquidator shall—

(a) send to the Registrar—

(i) a copy of the final winding up accounts of the company and shall make

a return in respect of each meeting and of the date thereof; and

(ii) copies of the resolutions passed in the meetings; and

(b) file an application along with his report under sub-section (1) in such manner

as may be prescribed along with the books and papers of the company relating to the

winding up, before the Tribunal for passing an order of dissolution of the company.

Appointment

of

committees.

Company

Liquidator to

submit report

on progress

of winding

up.

Report of

Company

Liquidator to

Tribunal for

examination

of persons.

Final meeting

and

dissolution of

company.

(5) If the Tribunal is satisfied, after considering the report of the Company

Liquidator that the process of winding up has been just and fair, the Tribunal shall pass an

order dissolving the company within sixty days of the receipt of the application under

sub-section (4).

(6) The Company Liquidator shall file a copy of the order under sub-section (5) with

the Registrar within thirty days.

(7) The Registrar, on receiving the copy of the order passed by the Tribunal under subsection

(5), shall forthwith publish a notice in the Official Gazette that the company is

dissolved.

(8) If the Company Liquidator fails to comply with the provisions of this section, he

shall be punishable with fine which may extend to one lakh rupees.

319. (1) Where a company (the transferor company) is proposed to be, or is in the

course of being, wound up voluntarily and the whole or any part of its business or property

is proposed to be transferred or sold to another company (the transferee company), the

Company Liquidator of the transferor company may, with the sanction of a special resolution

of the company conferring on him either a general authority or an authority in respect of any

particular arrangement,—

(a) receive, by way of compensation wholly or in part for the transfer or sale of

shares, policies, or other like interest in the transferee company, for distribution among

the members of the transferor company; or

(b) enter into any other arrangement whereby the members of the transferor

company may, in lieu of receiving cash, shares, policies or other like interest or in

addition thereto, participate in the profits of, or receive any other benefit from, the

transferee company:

Provided that no such arrangement shall be entered into without the consent of the

secured creditors.

(2) Any transfer, sale or other arrangement in pursuance of this section shall be binding

on the members of the transferor company.

(3) Any member of the transferor company who did not vote in favour of the special

resolution and expresses his dissent therefrom in writing addressed to the Company Liquidator,

and left at the registered office of the company within seven days after the passing of the

resolution, may require the liquidator either—

(a) to abstain from carrying the resolution into effect; or

(b) to purchase his interest at a price to be determined by agreement or the

registered valuer.

(4) If the Company Liquidator elects to purchase the member’s interest, the purchase

money, raised by him in such manner as may be determined by a special resolution, shall be

paid before the company is dissolved.

320. Subject to the provisions of this Act as to overriding preferential payments under

section 326, the assets of a company shall, on its winding up, be applied in satisfaction of its

liabilities pari passu and, subject to such application, shall, unless the articles otherwise

provide, be distributed among the members according to their rights and interests in the

company.

321. (1) Any arrangement other than the arrangement referred to in section 319 entered

into between the company which is about to be, or is in the course of being wound up and its

creditors shall be binding on the company and on the creditors if it is sanctioned by a special

resolution of the company and acceded to by the creditors who hold three-fourths in value

of the total amount due to all the creditors of the company.

Power of

Company

Liquidator to

accept shares,

etc., as

consideration

for sale of

property of

company.

Distribution

of property

of company.

Arrangement

when binding

on company

and creditors.

(2) Any creditor or contributory may, within three weeks from the completion of the

arrangement, apply to the Tribunal and the Tribunal may thereupon amend, vary, confirm or

set aside the arrangement.

322. (1) The Company Liquidator or any contributory or creditor may apply to the

Tribunal—

(a) to determine any question arising in the course of the winding up of a

company; or

(b) to exercise as respects the enforcing of calls, the staying of proceedings or

any other matter, all or any of the powers which the Tribunal might exercise if the

company were being wound up by the Tribunal.

(2) The Company Liquidator or any creditor or contributory may apply to the Tribunal

for an order setting aside any attachment, distress or execution put into force against the

estate or effects of the company after the commencement of the winding up.

(3) The Tribunal, if satisfied on an application under sub-section (1) or sub-section (2)

that the determination of the question or the required exercise of power or the order applied

for will be just and fair, may allow the application on such terms and conditions as it thinks fit

or may make such other order on the application as it thinks fit.

(4) A copy of an order staying the proceedings in the winding up, made under this

section, shall forthwith be forwarded by the company, or otherwise as may be prescribed, to

the Registrar, who shall make a minute of the order in his books relating to the company.

323. All costs, charges and expenses properly incurred in the winding up, including

the fee of the Company Liquidator, shall, subject to the rights of secured creditors, if any, be

payable out of the assets of the company in priority to all other claims.

PART III.—Provisions applicable to every mode of winding up

324. In every winding up (subject, in the case of insolvent companies, to the application

in accordance with the provisions of this Act or of the law of insolvency), all debts payable

on a contingency, and all claims against the company, present or future, certain or contingent,

ascertained or sounding only in damages, shall be admissible to proof against the company,

a just estimate being made, so far as possible, of the value of such debts or claims as may be

subject to any contingency, or may sound only in damages, or for some other reason may not

bear a certain value.

325. (1) In the winding up of an insolvent company, the same rules shall prevail and be

observed with regard to—

(a) debts provable;

(b) the valuation of annuities and future and contingent liabilities; and

(c) the respective rights of secured and unsecured creditors,

as are in force for the time being under the law of insolvency with respect to the estates of

persons adjudged insolvent:

Provided that the security of every secured creditor shall be deemed to be subject to a

pari passu charge in favour of the workmen to the extent of the workmen’s portion therein,

and, where a secured creditor, instead of relinquishing his security and proving his debts,

opts to realise his security,—

(i) the liquidator shall be entitled to represent the workmen and enforce such

charge;

(ii) any amount realised by the liquidator by way of enforcement of such charge

shall be applied rateably for the discharge of workmen’s dues; and

(iii) so much of the debts due to such secured creditor as could not be realised

by him or the amount of the workmen’s portion in his security, whichever is less, shall

rank pari passu with the workmen’s dues for the purposes of section 326.

Power to

apply to

Tribunal to

have

questions

determined,

etc.

Costs of

voluntary

winding up.

Debts of all

descriptions to

be admitted

to proof.

Application

of insolvency

rules in

winding up of

insolvent

companies.

(2) All persons under sub-section (1) shall be entitled to prove and receive dividends

out of the assets of the company under winding up, and make such claims against the

company as they respectively are entitled to make by virtue of this section:

Provided that if a secured creditor, instead of relinquishing his security and proving

his debts, proceeds to realise his security, he shall be liable to pay his portion of the expenses

incurred by the liquidator, including a provisional liquidator, if any, for the preservation of

the security before its realisation by the secured creditor.

Explanation.—For the purposes of this sub-section, the portion of expenses incurred

by the liquidator for the preservation of a security which the secured creditor shall be liable

to pay shall be the whole of the expenses less an amount which bears to such expenses the

same proportion as the workmen’s portion in relation to the security bears to the value of the

security.

(3) For the purposes of this section, section 326 and section 327,—

(a) “workmen’’, in relation to a company, means the employees of the company,

being workmen within the meaning of clause (s) of section 2 of the Industrial Disputes

Act, 1947;

(b) “workmen’s dues’’, in relation to a company, means the aggregate of the

following sums due from the company to its workmen, namely:—

(i) all wages or salary including wages payable for time or piece work and

salary earned wholly or in part by way of commission of any workman in respect

of services rendered to the company and any compensation payable to any

workman under any of the provisions of the Industrial Disputes Act, 1947;

(ii) all accrued holiday remuneration becoming payable to any workman

or, in the case of his death, to any other person in his right on the termination of

his employment before or by the effect of the winding up order or resolution;

(iii) unless the company is being wound up voluntarily merely for the

purposes of reconstruction or amalgamation with another company or unless

the company has, at the commencement of the winding up, under such a contract

with insurers as is mentioned in section 14 of the Workmen’s Compensation Act,

1923, rights capable of being transferred to and vested in the workmen, all amount

due in respect of any compensation or liability for compensation under the said

Act in respect of the death or disablement of any workman of the company;

(iv) all sums due to any workman from the provident fund, the pension

fund, the gratuity fund or any other fund for the welfare of the workmen,

maintained by the company;

(c) “workmen’s portion’’, in relation to the security of any secured creditor of a

company, means the amount which bears to the value of the security the same proportion

as the amount of the workmen’s dues bears to the aggregate of the amount of workmen’s

dues and the amount of the debts due to the secured creditors.

Illustration

The value of the security of a secured creditor of a company is Rs. 1,00,000. The total

amount of the workmen’s dues is Rs. 1,00,000. The amount of the debts due from the company

to its secured creditors is Rs. 3,00,000. The aggregate of the amount of workmen’s dues and

the amount of debts due to secured creditors is Rs. 4,00,000. The workmen’s portion of the

security is, therefore, one-fourth of the value of the security, that is Rs. 25,000.

326. (1) Notwithstanding anything contained in this Act or any other law for the time

being in force, in the winding up of a company,—

(a) workmen’s dues; and

(b) debts due to secured creditors to the extent such debts rank under clause

(iii) of the proviso to sub-section (1) of section 325 pari passu with such dues,

shall be paid in priority to all other debts:

Overriding

preferential

payments.

14 of 1947.

14 of 1947.

8 of 1923.

Provided that in case of the winding up of a company, the sums towards wages or

salary referred to in sub-clause (i) of clause (b) of sub-section (3) of section 325, which are

payable for a period of two years preceding the winding up order or such other period as

may be prescribed, shall be paid in priority to all other debts (including debts due to secured

creditors), within a period of thirty days of sale of assets and shall be subject to such charge

over the security of secured creditors as may be prescribed.

(2) The debts payable under the proviso to sub-section (1) shall be paid in full before

any payment is made to secured creditors and thereafter debts payable under that

sub-section shall be paid in full, unless the assets are insufficient to meet them, in which case

they shall abate in equal proportions.

327. (1) In a winding up, subject to the provisions of section 326, there shall be paid in

priority to all other debts,—

(a) all revenues, taxes, cesses and rates due from the company to the Central

Government or a State Government or to a local authority at the relevant date, and having

become due and payable within the twelve months immediately before that date;

(b) all wages or salary including wages payable for time or piece work and salary

earned wholly or in part by way of commission of any employee in respect of services

rendered to the company and due for a period not exceeding four months within the

twelve months immediately before the relevant date, subject to the condition that the

amount payable under this clause to any workman shall not exceed such amount as

may be notified;

(c) all accrued holiday remuneration becoming payable to any employee, or in

the case of his death, to any other person claiming under him, on the termination of his

employment before, or by the winding up order, or, as the case may be, the dissolution

of the company;

(d) unless the company is being wound up voluntarily merely for the purposes

of reconstruction or amalgamation with another company, all amount due in respect of

contributions payable during the period of twelve months immediately before the

relevant date by the company as the employer of persons under the Employees’ State

Insurance Act, 1948 or any other law for the time being in force;

(e) unless the company has, at the commencement of winding up, under such a

contract with any insurer as is mentioned in section 14 of the Workmen’s Compensation

Act, 1923, rights capable of being transferred to and vested in the workmen, all amount

due in respect of any compensation or liability for compensation under the said Act in

respect of the death or disablement of any employee of the company:

Provided that where any compensation under the said Act is a weekly payment,

the amount payable under this clause shall be taken to be the amount of the lump sum

for which such weekly payment could, if redeemable, be redeemed, if the employer has

made an application under that Act;

(f) all sums due to any employee from the provident fund, the pension fund, the

gratuity fund or any other fund for the welfare of the employees, maintained by the

company; and

(g) the expenses of any investigation held in pursuance of sections 213 and 216,

in so far as they are payable by the company.

(2) Where any payment has been made to any employee of a company on account of

wages or salary or accrued holiday remuneration, himself or, in the case of his death, to any

other person claiming through him, out of money advanced by some person for that purpose,

the person by whom the money was advanced shall, in a winding up, have a right of priority

in respect of the money so advanced and paid-up to the amount by which the sum in respect

of which the employee or other person in his right would have been entitled to priority in the

winding up has been reduced by reason of the payment having been made.

Preferential

payments.

34 of 1948.

8 of 1923.

(3) The debts enumerated in this section shall—

(a) rank equally among themselves and be paid in full, unless the assets are

insufficient to meet them, in which case they shall abate in equal proportions; and

(b) so far as the assets of the company available for payment to general creditors

are insufficient to meet them, have priority over the claims of holders of debentures

under any floating charge created by the company, and be paid accordingly out of any

property comprised in or subject to that charge.

(4) Subject to the retention of such sums as may be necessary for the costs and

expenses of the winding up, the debts under this section shall be discharged forthwith so far

as the assets are sufficient to meet them, and in the case of the debts to which priority is

given under clause (d) of sub-section (1), formal proof thereof shall not be required except in

so far as may be otherwise prescribed.

(5) In the event of a landlord or other person distraining or having distrained on any

goods or effects of the company within three months immediately before the date of a

winding up order, the debts to which priority is given under this section shall be a first charge

on the goods or effects so distrained on or the proceeds of the sale thereof:

Provided that, in respect of any money paid under any such charge, the landlord or

other person shall have the same rights of priority as the person to whom the payment is made.

(6) Any remuneration in respect of a period of holiday or of absence from work on

medical grounds through sickness or other good cause shall be deemed to be wages in

respect of services rendered to the company during that period.

Explanation.—For the purposes of this section,—

(a) the expression “accrued holiday remuneration” includes, in relation to any

person, all sums which, by virtue either of his contract of employment or of any

enactment including any order made or direction given thereunder, are payable on

account of the remuneration which would, in the ordinary course, have become payable

to him in respect of a period of holiday, had his employment with the company continued

until he became entitled to be allowed the holiday;

(b) the expression “employee” does not include a workman; and

(c) the expression “relevant date” means—

(i) in the case of a company being wound up by the Tribunal, the date of

appointment or first appointment of a provisional liquidator, or if no such

appointment was made, the date of the winding up order, unless, in either case,

the company had commenced to be wound up voluntarily before that date; and

(ii) in any other case, the date of the passing of the resolution for the

voluntary winding up of the company.

328. (1) Where a company has given preference to a person who is one of the creditors

of the company or a surety or guarantor for any of the debts or other liabilities of the

company, and the company does anything or suffers anything done which has the effect of

putting that person into a position which, in the event of the company going into liquidation,

will be better than the position he would have been in if that thing had not been done prior

to six months of making winding up application, the Tribunal, if satisfied that, such transaction

is a fraudulent preference may order as it may think fit for restoring the position to what it

would have been if the company had not given that preference.

(2) If the Tribunal is satisfied that there is a preference transfer of property, movable or

immovable, or any delivery of goods, payment, execution made, taken or done by or against

a company within six months before making winding up application, the Tribunal may order

as it may think fit and may declare such transaction invalid and restore the position.

329. Any transfer of property, movable or immovable, or any delivery of goods, made

by a company, not being a transfer or delivery made in the ordinary course of its business or

in favour of a purchaser or encumbrance in good faith and for valuable consideration, if made

within a period of one year before the presentation of a petition for winding up by the

Fraudulent

preference.

Transfers not

in good faith

to be void.

Tribunal or the passing of a resolution for voluntary winding up of the company, shall be

void against the Company Liquidator.

330. Any transfer or assignment by a company of all its properties or assets to trustees

for the benefit of all its creditors shall be void.

331. (1) Where a company is being wound up and anything made, taken or done after

the commencement of this Act is invalid under section 328 as a fraudulent preference of a

person interested in property mortgaged or charged to secure the company’s debt, then,

without prejudice to any rights or liabilities arising, apart from this provision, the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had

undertaken to be personally liable as a surety for the debt, to the extent of the mortgage or

charge on the property or the value of his interest, whichever is less.

(2) The value of the interest of the person preferred under sub-section (1) shall be

determined as at the date of the transaction constituting the fraudulent preference, as if the

interest were free of all encumbrances other than those to which the mortgage or charge for

the debt of the company was then subject.

(3) On an application made to the Tribunal with respect to any payment on the ground

that the payment was a fraudulent preference of a surety or guarantor, the Tribunal shall

have jurisdiction to determine any questions with respect to the payment arising between

the person to whom the payment was made and the surety or guarantor and to grant relief in

respect thereof, notwithstanding that it is not necessary so to do for the purposes of the

winding up, and for that purpose, may give leave to bring in the surety or guarantor as a third

party as in the case of a suit for the recovery of the sum paid.

(4) The provisions of sub-section (3) shall apply mutatis mutandis in relation to

transactions other than payment of money.

332. Where a company is being wound up, a floating charge on the undertaking or

property of the company created within the twelve months immediately preceding the

commencement of the winding up, shall, unless it is proved that the company immediately

after the creation of the charge was solvent, be invalid, except for the amount of any cash

paid to the company at the time of, or subsequent to the creation of, and in consideration for,

the charge, together with interest on that amount at the rate of five per cent. per annum or

such other rate as may be notified by the Central Government in this behalf.

333. (1) Where any part of the property of a company which is being wound up

consists of—

(a) land of any tenure, burdened with onerous covenants;

(b) shares or stocks in companies;

(c) any other property which is not saleable or is not readily saleable by reason

of the possessor thereof being bound either to the performance of any onerous act or

to the payment of any sum of money; or

(d) unprofitable contracts,

the Company Liquidator may, notwithstanding that he has endeavoured to sell or has taken

possession of the property or exercised any act of ownership in relation thereto or done

anything in pursuance of the contract, with the leave of the Tribunal and subject to the

provisions of this section, by writing signed by him, at any time within twelve months after

the commencement of the winding up or such extended period as may be allowed by the

Tribunal, disclaim the property:

Provided that where the Company Liquidator had not become aware of the existence of

any such property within one month from the commencement of the winding up, the power

Certain

transfers to

be void.

Effect of

floating

charge.

Disclaimer of

onerous

property.

Liabilities

and rights of

certain

persons

fraudulently

preferred.

of disclaiming the property may be exercised at any time within twelve months after he has

become aware thereof or such extended period as may be allowed by the Tribunal.

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights,

interest and liabilities of the company in or in respect of the property disclaimed, but shall

not, except so far as is necessary for the purpose of releasing the company and the property

of the company from liability, affect the rights, interest or liabilities of any other person.

(3) The Tribunal, before or on granting leave to disclaim, may require such notices to

be given to persons interested, and impose such terms as a condition of granting leave, and

make such other order in the matter as the Tribunal considers just and proper.

(4) The Company Liquidator shall not be entitled to disclaim any property in any case

where an application in writing has been made to him by any person interested in the

property requiring him to decide whether he will or will not disclaim and the Company

Liquidator has not, within a period of twenty-eight days after the receipt of the application or

such extended period as may be allowed by the Tribunal, give notice to the applicant that he

intends to apply to the Tribunal for leave to disclaim, and in case the property is under a

contract, if the Company Liquidator after such an application as aforesaid does not within

the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

(5) The Tribunal may, on the application of any person who is, as against the Company

Liquidator, entitled to the benefit or subject to the burden of a contract made with the

company, make an order rescinding the contract on such terms as to payment by or to either

party of damages for the non-performance of the contract, or otherwise as the Tribunal

considers just and proper, and any damages payable under the order to any such person may

be proved by him as a debt in the winding up.

(6) The Tribunal may, on an application by any person who either claims any interest

in any disclaimed property or is under any liability not discharged under this Act in respect

of any disclaimed property, and after hearing any such persons as it thinks fit, make an order

for the vesting of the property in, or the delivery of the property to, any person entitled

thereto or to whom it may seem just that the property should be delivered by way of

compensation for such liability as aforesaid, or a trustee for him, and on such terms as the

Tribunal considers just and proper, and on any such vesting order being made, the property

comprised therein shall vest accordingly in the person named therein in that behalf without

any conveyance or assignment for the purpose:

Provided that where the property disclaimed is of a leasehold nature, the Tribunal shall

not make a vesting order in favour of any person claiming under the company, whether as

under-lessee or as mortgagee or holder of a charge by way of demise, except upon the terms

of making that person—

(a) subject to the same liabilities and obligations as those to which the company

was subject under the lease in respect of the property at the commencement of the

winding up; or

(b) if the Tribunal thinks fit, subject only to the same liabilities and obligations as

if the lease had been assigned to that person at that date,

and in either event as if the lease had comprised only the property comprised in the vesting

order, and any mortgagee or under-lessee declining to accept a vesting order upon such

terms shall be excluded from all interest in, and security upon the property, and, if there is no

person claiming under the company who is willing to accept an order upon such terms, the

Tribunal shall have power to vest the estate and interest of the company in the property in

any person liable, either personally or in a representative character, and either alone or jointly

with the company, to perform the covenants of the lessee in the lease, free and discharged

from all estates, encumbrances and interests created therein by the company.

(7) Any person affected by the operation of a disclaimer under this section shall be

deemed to be a creditor of the company to the amount of the compensation or damages

payable in respect of such effect, and may accordingly prove the amount as a debt in the

winding up.

334. (1) In the case of a voluntary winding up, any transfer of shares in the company,

not being a transfer made to or with the sanction of the Company Liquidator, and any

alteration in the status of the members of the company, made after the commencement of the

winding up, shall be void.

(2) In the case of a winding up by the Tribunal, any disposition of the property,

including actionable claims, of the company, and any transfer of shares in the company or

alteration in the status of its members, made after the commencement of the winding up,

shall, unless the Tribunal otherwise orders, be void.

335. (1) Where any company is being wound up by the Tribunal,—

(a) any attachment, distress or execution put in force, without leave of the

Tribunal against the estate or effects of the company, after the commencement of the

winding up; or

(b) any sale held, without leave of the Tribunal of any of the properties or effects

of the company, after such commencement,

shall be void.

(2) Nothing in this section shall apply to any proceedings for the recovery of any tax

or impost or any dues payable to the Government.

336. (1) If any person, who is or has been an officer of a company which, at the time of

the commission of the alleged offence, is being wound up, whether by the Tribunal or

voluntarily, or which is subsequently ordered to be wound up by the Tribunal or which

subsequently passes a resolution for voluntary winding up,—

(a) does not, to the best of his knowledge and belief, fully and truly disclose to

the Company Liquidator all the property, movable and immovable, of the company, and

how and to whom and for what consideration and when the company disposed of any

part thereof, except such part as has been disposed of in the ordinary course of the

business of the company;

(b) does not deliver up to the Company Liquidator, or as he directs, all such part

of the movable and immovable property of the company as is in his custody or under

his control and which he is required by law to deliver up;

(c) does not deliver up to the Company Liquidator, or as he directs, all such

books and papers of the company as are in his custody or under his control and which

he is required by law to deliver up;

(d) within the twelve months immediately before the commencement of the

winding up or at any time thereafter,—

(i) conceals any part of the property of the company to the value of one

thousand rupees or more, or conceals any debt due to or from the company;

(ii) fraudulently removes any part of the property of the company to the

value of one thousand rupees or more;

(iii) conceals, destroys, mutilates or falsifies, or is privy to the concealment,

destruction, mutilation or falsification of, any book or paper affecting or relating

to, the property or affairs of the company;

(iv) makes, or is privy to the making of, any false entry in any book or

paper affecting or relating to, the property or affairs of the company;

Transfers,

etc., after

commencement

of winding up

to be void.

Certain

attachments,

executions,

etc., in

winding up by

Tribunal to be

void.

Offences by

officers of

companies in

liquidation.

(v) fraudulently parts with, alters or makes any omission in, or is privy to

the fraudulent parting with, altering or making of any omission in, any book or

paper affecting or relating to the property or affairs of the company;

(vi) by any false representation or other fraud, obtains on credit, for or on

behalf of the company, any property which the company does not subsequently

pay for;

(vii) under the false pretence that the company is carrying on its business,

obtains on credit, for or on behalf of the company, any property which the

company does not subsequently pay for; or

(viii) pawns, pledges or disposes of any property of the company which

has been obtained on credit and has not been paid for, unless such pawning,

pledging or disposing of the property is in the ordinary course of business of

the company;

(e) makes any material omission in any statement relating to the affairs of the

company;

(f) knowing or believing that a false debt has been proved by any person under

the winding up, fails for a period of one month to inform the Company Liquidator

thereof;

(g) after the commencement of the winding up, prevents the production of any

book or paper affecting or relating to the property or affairs of the company;

(h) after the commencement of the winding up or at any meeting of the creditors

of the company within the twelve months next before the commencement of the winding

up, attempts to account for any part of the property of the company by fictitious

losses or expenses; or

(i) is guilty of any false representation or fraud for the purpose of obtaining the

consent of the creditors of the company or any of them, to an agreement with reference

to the affairs of the company or to the winding up,

he shall be punishable with imprisonment for a term which shall not be less than three years

but which may extend to five years and with fine which shall not be less than one lakh rupees

but which may extend to three lakh rupees:

Provided that it shall be a good defence if the accused proves that he had no intent to

defraud or to conceal the true state of affairs of the company or to defeat the law.

(2) Where any person pawns, pledges or disposes of any property in circumstances

which amount to an offence under sub-clause (viii) of clause (d) of sub-section (1), every

person who takes in pawn or pledge or otherwise receives the property, knowing it to be

pawned, pledged, or disposed of in such circumstances as aforesaid, shall be punishable

with imprisonment for a term which shall not be less than three years but which may extend

to five years and with fine which shall not be less than three lakh rupees but which may

extend to five lakh rupees.

Explanation.—For the purposes of this section, the expression “officer” includes any

person in accordance with whose directions or instructions the directors of the company

have been accustomed to act.

337. If any person, being at the time of the commission of the alleged offence an officer

of a company which is subsequently ordered to be wound up by the Tribunal or which

subsequently passes a resolution for voluntary winding up,—

(a) has, by false pretences or by means of any other fraud, induced any person

to give credit to the company;

(b) with intent to defraud creditors of the company or any other person, has

Penalty for

frauds by

officers.

made or caused to be made any gift or transfer of, or charge on, or has caused or

connived at the levying of any execution against, the property of the company; or

(c) with intent to defraud creditors of the company, has concealed or removed

any part of the property of the company since the date of any unsatisfied judgment or

order for payment of money obtained against the company or within two months

before that date,

he shall be punishable with imprisonment for a term which shall not be less than one year but

which may extend to three years and with fine which shall not be less than one lakh rupees

but which may extend to three lakh rupees.

338. (1) Where a company is being wound up, if it is shown that proper books of

account were not kept by the company throughout the period of two years immediately

preceding the commencement of the winding up, or the period between the incorporation of

the company and the commencement of the winding up, whichever is shorter, every officer of

the company who is in default shall, unless he shows that he acted honestly and that in the

circumstances in which the business of the company was carried on, the default was excusable,

be punishable with imprisonment for a term which shall not be less than one year but which

may extend to three years and with fine which shall not be less than one lakh rupees but

which may extend to three lakh rupees.

(2) For the purposes of sub-section (1), it shall be deemed that proper books of

account have not been kept in the case of any company,—

(a) if such books of account as are necessary to exhibit and explain the

transactions and financial position of the business of the company, including books

containing entries made from day-to-day in sufficient detail of all cash received and all

cash paid, have not been kept; and

(b) where the business of the company has involved dealings in goods,

statements of the annual stock takings and, except in the case of goods sold by way of

ordinary retail trade, of all goods sold and purchased, showing the goods and the

buyers and the sellers thereof in sufficient detail to enable those goods and those

buyers and sellers to be identified, have not been kept.

339. (1) If in the course of the winding up of a company, it appears that any business

of the company has been carried on with intent to defraud creditors of the company or any

other persons or for any fraudulent purpose, the Tribunal, on the application of the Official

Liquidator, or the Company Liquidator or any creditor or contributory of the company, may,

if it thinks it proper so to do, declare that any person, who is or has been a director, manager,

or officer of the company or any persons who were knowingly parties to the carrying on of

the business in the manner aforesaid shall be personally responsible, without any limitation

of liability, for all or any of the debts or other liabilities of the company as the Tribunal may

direct:

Provided that on the hearing of an application under this sub-section, the Official

Liquidator or the Company Liquidator, as the case may be, may himself give evidence or call

witnesses.

(2) Where the Tribunal makes any such declaration, it may give such further directions

as it thinks proper for the purpose of giving effect to that declaration and, in particular,—

(a) make provision for making the liability of any such person under the declaration

a charge on any debt or obligation due from the company to him, or on any mortgage

or charge or any interest in any mortgage or charge on any assets of the company held

by or vested in him, or any person on his behalf, or any person claiming as assignee

from or through the person liable or any person acting on his behalf;

(b) make such further order as may be necessary for the purpose of enforcing

any charge imposed under this sub-section.

Liability

where proper

accounts not

kept.

Liability for

fraudulent

conduct of

business.

(3) Where any business of a company is carried on with such intent or for such

purpose as is mentioned in sub-section (1), every person who was knowingly a party to the

carrying on of the business in the manner aforesaid, shall be liable for action under

section 447.

(4) This section shall apply, notwithstanding that the person concerned may be

punishable under any other law for the time being in force in respect of the matters on the

ground of which the declaration is to be made.

Explanation.—For the purposes of this section,—

(a) the expression “assignee” includes any person to whom or in whose favour,

by the directions of the person liable, the debt, obligation, mortgage or charge was

created, issued or transferred or the interest was created, but does not include an

assignee for valuable consideration, not including consideration by way of marriage,

given in good faith and without notice of any of the matters on the ground of which the

declaration is made;

(b) the expression “officer” includes any person in accordance with whose

directions or instructions the directors of the company have been accustomed

to act.

340. (1) If in the course of winding up of a company, it appears that any person who

has taken part in the promotion or formation of the company, or any person, who is or has

been a director, manager, Company Liquidator or officer of the company—

(a) has misapplied, or retained, or become liable or accountable for, any money

or property of the company; or

(b) has been guilty of any misfeasance or breach of trust in relation to the

company,

the Tribunal may, on the application of the Official Liquidator, or the Company Liquidator, or

of any creditor or contributory, made within the period specified in that behalf in sub-section

(2), inquire into the conduct of the person, director, manager, Company Liquidator or officer

aforesaid, and order him to repay or restore the money or property or any part thereof

respectively, with interest at such rate as the Tribunal considers just and proper, or to

contribute such sum to the assets of the company by way of compensation in respect of the

misapplication, retainer, misfeasance or breach of trust, as the Tribunal considers just and

proper.

(2) An application under sub-section (1) shall be made within five years from the date

of the winding up order, or of the first appointment of the Company Liquidator in the winding

up, or of the misapplication, retainer, misfeasance or breach of trust, as the case may be,

whichever is longer.

(3) This section shall apply, notwithstanding that the matter is one for which the

person concerned may be criminally liable.

341. Where a declaration under section 339 or an order under section 340 is made in

respect of a firm or body corporate, the Tribunal shall also have power to make a declaration

under section 339, or pass an order under section 340, as the case may be, in respect of any

person who was at the relevant time a partner in that firm or a director of that body corporate.

342. (1) If it appears to the Tribunal in the course of a winding up by the Tribunal, that

any person, who is or has been an officer, or any member, of the company has been guilty of

any offence in relation to the company, the Tribunal may, either on the application of any

person interested in the winding up or suo motu, direct the liquidator to prosecute the

offender or to refer the matter to the Registrar.

Power of

Tribunal to

assess

damages

against

delinquent

directors, etc.

Liability

under sections

339 and 340

to extend to

partners or

directors in

firms or

companies.

Prosecution

of delinquent

officers and

members of

company.

(2) If it appears to the Company Liquidator in the course of a voluntary winding up that

any person,who is or has been an officer, or any member, of the company has been guilty of

any offence in relation to the company under this Act, he shall forthwith report the matter to

the Registrar and shall furnish to him such information and give to him such access to and

facilities for inspecting and taking copies of any books and papers, being information or

books and papers in the possession or under the control of the Company Liquidator and

relating to the matter in question, as the Registrar may require.

(3) Where any report is made under sub-section (2) to the Registrar,—

(a) if he thinks fit, he may apply to the Central Government for an order to make

further inquiry into the affairs of the company by any person designated by him and

for conferring on such person all the powers of investigation as are provided under

this Act;

(b) if he considers that the case is one in which a prosecution ought to be

instituted, he shall report the matter to the Central Government, and that Government

may, after taking such legal advice as it thinks fit, direct the Registrar to institute

prosecution:

Provided that no report shall be made by the Registrar under this clause without first

giving the accused person a reasonable opportunity of making a statement in writing to the

Registrar and of being heard thereon.

(4) If it appears to the Tribunal in the course of a voluntary winding up that any

person, who is or has been an officer, or any member, of the company has been guilty as

aforesaid, and that no report with respect to the matter has been made by the Company

Liquidator to the Registrar under sub-section (2), the Tribunal may, on the application of any

person interested in the winding up or suo motu, direct the Company Liquidator to make

such a report, and on a report being made, the provisions of this section shall have effect as

though the report had been made in pursuance of the provisions of sub-section (2).

(5) When any prosecution is instituted under this section, it shall be the duty of the

liquidator and of every person, who is or has been an officer and agent of the company to

give all assistance in connection with the prosecution which he is reasonably able to give.

Explanation.—For the purposes of this sub-section, the expression “agent”, in relation

to a company, shall include any banker or legal adviser of the company and any person

employed by the company as auditor.

(6) If a person fails or neglects to give assistance required by sub-section (5), he shall

be liable to pay fine which shall not be less than twenty-five thousand rupees but which may

extend to one lakh rupees.

343. (1) The Company Liquidator may—

(a) with the sanction of the Tribunal, when the company is being wound up by

the Tribunal; and

(b) with the sanction of a special resolution of the company and prior approval

of the Tribunal, in the case of a voluntary winding up,—

(i) pay any class of creditors in full;

(ii) make any compromise or arrangement with creditors or persons claiming

to be creditors, or having or alleging themselves to have any claim, present or

future, certain or contingent, against the company, or whereby the company

may be rendered liable; or

(iii) compromise any call or liability to call, debt, and liability capable of

resulting in a debt, and any claim, present or future, certain or contingent,

ascertained or sounding only in damages, subsisting or alleged to subsist

between the company and a contributory or alleged contributory or other debtor

Company

Liquidator to

exercise

certain

powers

subject to

sanction.

or person apprehending liability to the company, and all questions in any way

relating to or affecting the assets or liabilities or the winding up of the company,

on such terms as may be agreed, and take any security for the discharge of any

such call, debt, liability or claim, and give a complete discharge in respect thereof.

(2) Notwithstanding anything contained in sub-section (1), in the case of a winding up

by the Tribunal, the Central Government may make rules to provide that the Company

Liquidator may, under such circumstances, if any, and subject to such conditions, restrictions

and limitations, if any, as may be prescribed, exercise any of the powers referred to in subclause

(ii) or sub-clause (iii) of clause (b) of sub-section (1) without the sanction of the

Tribunal.

(3) Any creditor or contributory may apply in the manner prescribed to the Tribunal

with respect to any exercise or proposed exercise of powers by the Company Liquidator

under this section, and the Tribunal shall after giving a reasonable opportunity to such

applicant and the Company Liquidator, pass such orders as it may think fit.

344. (1) Where a company is being wound up, whether by the Tribunal or voluntarily,

every invoice, order for goods or business letter issued by or on behalf of the company or a

Company Liquidator of the company, or a receiver or manager of the property of the company,

being a document on or in which the name of the company appears, shall contain a statement

that the company is being wound up.

(2) If a company contravenes the provisions of sub-section (1), the company, and

every officer of the company, the Company Liquidator and any receiver or manager, who

wilfully authorises or permits the non-compliance, shall be punishable with fine which shall

not be less than fifty thousand rupees but which may extend to three lakh rupees.

345. Where a company is being wound up, all books and papers of the company and

of the Company Liquidator shall, as between the contributories of the company, be prima

facie evidence of the truth of all matters purporting to be recorded therein.

346. (1) At any time after the making of an order for the winding up of a company by

the Tribunal, any creditor or contributory of the company may inspect the books and papers

of the company only in accordance with, and subject to such rules as may be prescribed.

(2) Nothing contained in sub-section (1) shall exclude or restrict any rights conferred

by any law for the time being in force—

(a) on the Central Government or a State Government;

(b) on any authority or officer thereof; or

(c) on any person acting under the authority of any such Government or of any

such authority or officer.

347. (1) When the affairs of a company have been completely wound up and it is about

to be dissolved, its books and papers and those of the Company Liquidator may be disposed

of as follows:—

(a) in the case of winding up by the Tribunal, in such manner as the Tribunal

directs; and

(b) in the case of voluntary winding up, in such manner as the company by

special resolution with the prior approval of the creditors direct.

(2) After the expiry of five years from the dissolution of the company, no responsibility

shall devolve on the company, the Company Liquidator, or any person to whom the custody

of the books and papers has been entrusted, by reason of any book or paper not being

forthcoming to any person claiming to be interested therein.

(3) The Central Government may, by rules,—

(a) prevent for such period as it thinks proper the destruction of the books and

Statement

that company

is in

liquidation.

Books and

papers of

company to

be evidence.

Inspection of

books and

papers by

creditors and

contributories.

Disposal of

books and

papers of

company.

papers of a company which has been wound up and of its Company Liquidator;

and

(b) enable any creditor or contributory of the company to make representations

to the Central Government in respect of the matters specified in clause (a) and to

appeal to the Tribunal from any order which may be made by the Central Government

in the matter.

(4) If any person acts in contravention of any rule framed or an order made under

sub-section (3), he shall be punishable with imprisonment for a term which may extend to six

months or with fine which may extend to fifty thousand rupees, or with both.

348. (1) If the winding up of a company is not concluded within one year after its

commencement, the Company Liquidator shall, unless he is exempted from so doing either

wholly or in part by the Central Government, within two months of the expiry of such year

and thereafter until the winding up is concluded, at intervals of not more than one year or at

such shorter intervals, if any, as may be prescribed, file a statement in such form containing

such particulars as may be prescribed, duly audited, by a person qualified to act as auditor of

the company, with respect to the proceedings in, and position of, the liquidation,—

(a) in the case of a winding up by the Tribunal, with the Tribunal; and

(b) in the case of a voluntary winding up, with the Registrar:

Provided that no such audit as is referred to in this sub-section shall be necessary

where the provisions of section 294 apply.

(2) When the statement is filed with the Tribunal under clause (a) of sub-section (1), a

copy shall simultaneously be filed with the Registrar and shall be kept by him along with the

other records of the company.

(3) Where a statement referred to in sub-section (1) relates to a Government company

in liquidation, the Company Liquidator shall forward a copy thereof—

(a) to the Central Government, if that Government is a member of the Government

company;

(b) to any State Government, if that Government is a member of the Government

company; or

(c) to the Central Government and any State Government, if both the Governments

are members of the Government company.

(4) Any person stating himself in writing to be a creditor or contributory of the company

shall be entitled, by himself or by his agent, at all reasonable times, on payment of the

prescribed fee, to inspect the statement referred to in sub-section (1), and to receive a copy

thereof or an extract therefrom.

(5) Any person fraudulently stating himself to be a creditor or contributory under subsection

(4) shall be deemed to be guilty of an offence under section 182 of the Indian Penal

Code, and shall, on the application of the Company Liquidator, be punishable accordingly.

(6) If a Company Liquidator contravenes the provisions of this section, the Company

Liquidator shall be punishable with fine which may extend to five thousand rupees for every

day during which the failure continues.

(7) If a Company Liquidator makes wilful default in causing the statement referred to in

sub-section (1) audited by a person who is not qualified to act as an auditor of the company,

the Company Liquidator shall be punishable with imprisonment for a term which may extend

to six months or with fine which may extend to one lakh rupees, or with both.

Information

as to pending

liquidations.

45 of 1860.

349. Every Official Liquidator shall, in such manner and at such times as may be

prescribed, pay the monies received by him as Official Liquidator of any company, into the

public account of India in the Reserve Bank of India.

350. (1) Every Company Liquidator of a company shall, in such manner and at such

times as may be prescribed, deposit the monies received by him in his capacity as such in a

scheduled bank to the credit of a special bank account opened by him in that behalf:

Provided that if the Tribunal considers that it is advantageous for the creditors or

contributories or the company, it may permit the account to be opened in such other bank

specified by it.

(2) If any Company Liquidator at any time retains for more than ten days a sum

exceeding five thousand rupees or such other amount as the Tribunal may, on the application

of the Company Liquidator, authorise him to retain, then, unless he explains the retention to

the satisfaction of the Tribunal, he shall—

(a) pay interest on the amount so retained in excess, at the rate of twelve per

cent. per annum and also pay such penalty as may be determined by the Tribunal;

(b) be liable to pay any expenses occasioned by reason of his default; and

(c) also be liable to have all or such part of his remuneration, as the Tribunal may

consider just and proper, disallowed, or may also be removed from his office.

351. Neither the Official Liquidator nor the Company Liquidator of a company shall

deposit any monies received by him in his capacity as such into any private banking account.

352. (1) Where any company is being wound up and the liquidator has in his hands or

under his control any money representing—

(a) dividends payable to any creditor but which had remained unpaid for six

months after the date on which they were declared; or

(b) assets refundable to any contributory which have remained undistributed

for six months after the date on which they become refundable,

the liquidator shall forthwith deposit the said money into a separate special account to be

known as the Company Liquidation Dividend and Undistributed Assets Account maintained

in a scheduled bank.

(2) The liquidator shall, on the dissolution of the company, pay into the Company

Liquidation Dividend and Undistributed Assets Account any money representing unpaid

dividends or undistributed assets in his hands at the date of dissolution.

(3) The liquidator shall, when making any payment referred to in sub-sections (1) and

(2), furnish to the Registrar, a statement in the prescribed form, setting forth, in respect of all

sums included in such payment, the nature of the sums, the names and last known addresses

of the persons entitled to participate therein, the amount to which each is entitled and the

nature of his claim thereto, and such other particulars as may be prescribed.

(4) The liquidator shall be entitled to a receipt from the scheduled bank for any money

paid to it under sub-sections (1) and (2), and such receipt shall be an effectual discharge of

the Company Liquidator in respect thereof.

(5) Where a company is being wound up voluntarily, the Company Liquidator shall,

when filing a statement in pursuance of sub-section (1) of section 348, indicate the sum of

Official

Liquidator to

make

payments

into public

account of

India.

Company

Liquidator to

deposit

monies into

scheduled

bank.

Liquidator not

to deposit

monies into

private

banking

account.

Company

Liquidation

Dividend and

Undistributed

Assets

Account.

money which is payable under sub-sections (1) and (2) of this section during the six months

preceding the date on which the said statement is prepared, and shall, within fourteen days

of the date of filing the said statement, pay that sum into the Company Liquidation Dividend

and Undistributed Assets Account.

(6) Any person claiming to be entitled to any money paid into the Company Liquidation

Dividend and Undistributed Assets Account, whether paid in pursuance of this section or

under the provisions of any previous company law may apply to the Registrar for payment

thereof, and the Registrar, if satisfied that the person claiming is entitled, may make the

payment to that person of the sum due:

Provided that the Registrar shall settle the claim of such person within a period of sixty

days from the date of receipt of such claim, failing which the Registrar shall make a report to

the Regional Director giving reasons of such failure.

(7) Any money paid into the Company Liquidation Dividend and Undistributed Assets

Account in pursuance of this section, which remains unclaimed thereafter for a period of

fifteen years, shall be transferred to the general revenue account of the Central Government,

but a claim to any money so transferred may be preferred under sub-section (6) and shall be

dealt with as if such transfer had not been made and the order, if any, for payment on the claim

will be treated as an order for refund of revenue.

(8) Any liquidator retaining any money which should have been paid by him into the

Company Liquidation Dividend and Undistributed Assets Account under this section shall—

(a) pay interest on the amount so retained at the rate of twelve per cent. per

annum and also pay such penalty as may be determined by the Registrar:

Provided that the Central Government may in any proper case remit either in part

or in whole the amount of interest which the liquidator is required to pay under this

clause;

(b) be liable to pay any expenses occasioned by reason of his default; and

(c) where the winding up is by the Tribunal, also be liable to have all or such part

of his remuneration, as the Tribunal may consider just and proper, to be disallowed,

and to be removed from his office by the Tribunal.

353. (1) If any Company Liquidator who has made any default in filing, delivering or

making any return, account or other document, or in giving any notice which he is by law

required to file, deliver, make or give, fails to make good the default within fourteen days after

the service on him of a notice requiring him to do so, the Tribunal may, on an application

made to it by any contributory or creditor of the company or by the Registrar, make an order

directing the Company Liquidator to make good the default within such time as may be

specified in the order.

(2) Any order under sub-section (1) may provide that all costs of, and incidental to, the

application shall be borne by the Company Liquidator.

(3) Nothing in this section shall prejudice the operation of any enactment imposing

penalties on a Company Liquidator in respect of any such default as aforesaid.

354. (1) In all matters relating to the winding up of a company, the Tribunal may—

(a) have regard to the wishes of creditors or contributories of the company, as

proved to it by any sufficient evidence;

(b) if it thinks fit for the purpose of ascertaining those wishes, direct meetings of

the creditors or contributories to be called, held and conducted in such manner as the

Tribunal may direct; and

(c) appoint a person to act as chairman of any such meeting and to report the

result thereof to the Tribunal.

Liquidator to

make returns,

etc.

Meetings to

ascertain

wishes of

creditors or

contributories.

(2) While ascertaining the wishes of creditors under sub-section (1), regard shall be

had to the value of each debt of the creditor.

(3) While ascertaining the wishes of contributories under sub-section (1), regard shall

be had to the number of votes which may be cast by each contributory.

355. (1) Any affidavit required to be sworn under the provisions, or for the purposes,

of this Chapter may be sworn—

(a) in India before any court, tribunal, judge or person lawfully authorised to

take and receive affidavits; and

(b) in any other country before any court, judge or person lawfully authorised to

take and receive affidavits in that country or before an Indian diplomatic or consular

officer.

(2) All tribunals, judges, Justices, commissioners and persons acting judicially in India

shall take judicial notice of the seal, stamp or signature, as the case may be, of any such

court, tribunal, judge, person, diplomatic or consular officer, attached, appended or subscribed

to any such affidavit or to any other document to be used for the purposes of this Chapter.

356. (1) Where a company has been dissolved, whether in pursuance of this Chapter

or of section 232 or otherwise, the Tribunal may at any time within two years of the date of the

dissolution, on application by the Company Liquidator of the company or by any other

person who appears to the Tribunal to be interested, make an order, upon such terms as the

Tribunal thinks fit, declaring the dissolution to be void, and thereupon such proceedings

may be taken as if the company had not been dissolved.

(2) It shall be the duty of the Company Liquidator or the person on whose application

the order was made, within thirty days after the making of the order or such further time as the

Tribunal may allow, to file a certified copy of the order with the Registrar who shall register

the same, and if the Company Liquidator or the person fails so to do, the Company Liquidator

or the person shall be punishable with fine which may extend to ten thousand rupees for

every day during which the default continues.

357. (1) Where, before the presentation of a petition for the winding up of a company

by the Tribunal, a resolution has been passed by the company for voluntary winding up, the

winding up of the company shall be deemed to have commenced at the time of the passing of

the resolution, and unless the Tribunal, on proof of fraud or mistake, thinks fit to direct

otherwise, all proceedings taken in the voluntary winding up shall be deemed to have been

validly taken.

(2) In any other case, the winding up of a company by the Tribunal shall be deemed to

commence at the time of the presentation of the petition for the winding up.

358. Notwithstanding anything in the Limitation Act, 1963, or in any other law for the

time being in force, in computing the period of limitation specified for any suit or application in

the name and on behalf of a company which is being wound up by the Tribunal, the period from

the date of commencement of the winding up of the company to a period of one year immediately

following the date of the winding up order shall be excluded.

PART IV.—Official Liquidators

359. (1) 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.

(2) The liquidators appointed under sub-section (1) shall be whole-time officers of the

Central Government.

(3) The salary and other allowances of the Official Liquidator, Joint Official Liquidator,

Court,

tribunal or

person, etc.,

before whom

affidavit may

be sworn.

Powers of

Tribunal to

declare

dissolution of

company

void.

Commencement

of winding up

by Tribunal.

Exclusion of

certain time in

computing

period of

limitation.

Appointment

of Official

Liquidator.

36 of 1963.

Deputy Official Liquidator and Assistant Official Liquidator shall be paid by the Central

Government.

360. (1) The Official Liquidator shall exercise such powers and perform such duties as

the Central Government may prescribe.

(2) Without prejudice to the provisions of sub-section (1), the Official Liquidator

may—

(a) exercise all or any of the powers as may be exercised by a Company Liquidator

under the provisions of this Act; and

(b) conduct inquiries or investigations, if directed by the Tribunal or the Central

Government, in respect of matters arising out of winding up proceedings.

361. (1) Where the company to be wound up under this Chapter, —

(i) has assets of book value not exceeding one crore rupees; and

(ii) belongs to such class or classes of companies as may be prescribed,

the Central Government may order it to be wound up by summary procedure provided under

this Part.

(2) Where an order under sub-section (1) is made, the Central Government shall appoint

the Official Liquidator as the liquidator of the company.

(3) The Official Liquidator shall forthwith take into his custody or control all assets,

effects and actionable claims to which the company is or appears to be entitled.

(4) The Official Liquidator shall, within thirty days of his appointment, submit a report

to the Central Government in such manner and form, as may be prescribed, including a report

whether in his opinion, any fraud has been committed in promotion, formation or management

of the affairs of the company or not.

(5) On receipt of the report under sub-section (4), if the Central Government is satisfied

that any fraud has been committed by the promoters, directors or any other officer of the

company, it may direct further investigation into the affairs of the company and that a report

shall be submitted within such time as may be specified.

(6) After considering the investigation report under sub-section (5), the Central

Government may order that winding up may be proceeded under Part I of this Chapter or

under the provision of this Part.

362. (1) The Official Liquidator shall expeditiously dispose of all the assets whether

movable or immovable within sixty days of his appointment.

(2) The Official Liquidator shall serve a notice within thirty days of his appointment

calling upon the debtors of the company or the contributories, as the case may be, to deposit

within thirty days with him the amount payable to the company.

(3) Where any debtor does not deposit the amount under sub-section (2), the Central

Government may, on an application made to it by the Official Liquidator, pass such orders as

it thinks fit.

(4) The amount recovered under this section by the Official Liquidator shall be deposited

in accordance with the provisions of section 349.

363. (1) The Official Liquidator within thirty days of his appointment shall call upon

the creditors of the company to prove their claims in such manner as may be prescribed,

within thirty days of the receipt of such call.

(2) The Official Liquidator shall prepare a list of claims of creditors in such manner as

may be prescribed and each creditor shall be communicated of the claims accepted or rejected

along with reasons to be recorded in writing.

364. (1) Any creditor aggrieved by the decision of the Official Liquidator under section

363 may file an appeal before the Central Government within thirty days of such decision.

(2) The Central Government may after calling the report from the Official Liquidator

either dismiss the appeal or modify the decision of the Official Liquidator.

Powers and

functions of

Official

Liquidator.

Summary

procedure for

liquidation.

Sale of assets

and recovery

of debts due

to company.

Settlement of

claims of

creditors by

Official

Liquidator.

Appeal by

creditor.

(3) The Official Liquidator shall make payment to the creditors whose claims have been

accepted.

(4) The Central Government may, at any stage during settlement of claims, if considers

necessary, refer the matter to the Tribunal for necessary orders.

365. (1) The Official Liquidator shall, if he is satisfied that the company is finally

wound up, submit a final report to—

(i) the Central Government, in case no reference was made to the Tribunal under

sub-section (4) of section 364; and

(ii) in any other case, the Central Government and the Tribunal.

(2) The Central Government, or as the case may be, the Tribunal on receipt of such

report shall order that the company be dissolved.

(3) Where an order is made under sub-section (2), the Registrar shall strike off the

name of the company from the register of companies and publish a notification to this effect.