Powers and Duties of Company Liquidator

Section 290 of the Companies Act, 2013 lays down that 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 –

1. to carry on the business of the company so far as may be necessary for the beneficial winding up of the company;
2. 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;
3. 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;
4. to sell the whole of the undertaking of the company as a going concern;
5. to raise any money required on the security of the assets of the company;
6. to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and on behalf of the company;
7. to invite and settle claim of creditors, employees or any other claimant and distribute sale proceeds in accordance with priorities established under this Act;
8. to inspect the records and returns of the company on the files of the Registrar or any other authority;
9. 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;
10. 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;
11. 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;
12. 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;
13. 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, –
    • for winding up of the company;
    • for distribution of assets;
    • in discharge of his duties and obligations and functions as Company liquidator. and
14. to apply to the tribunal for such orders or directions as may be necessary for the winding up of the company

Professional Assistance to Company Liquidator

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. [Section 291(1)]

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. [Section 291(2)]

Exercise & Control of a Company Liquidator’s Powers

Sub-section (1) of section 292 lays down that 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.

If there is a disagreement between the directions given by creditors or contributories (people who have a financial interest in the company) at a general meeting and those given by an advisory committee, the directions from the creditors or contributories will be considered more important.

The person in charge of handling the company’s liquidation (the Company liquidator) has the authority to call meetings with creditors or contributories to understand their preferences. Additionally, they are required to schedule meetings at specific times if directed by creditors or contributories through a resolution or upon a written request from at least one-tenth of the creditors or contributories.

If anyone is unhappy with an action or decision made by the Company liquidator, they have the right to appeal to a tribunal. The tribunal can either uphold, reverse, or modify the decision in question and can issue further orders as it sees fit and fair in the given circumstances.