Companies Act Section 290 — Powers and duties of Company Liquidator

CHAPTER XX WINDING UP

Commercial / Corporate

Summary

Sub-section (1) sets out the powers of the Company Liquidator during a winding up ordered by the Tribunal, subject to any directions the Tribunal may give. These powers include the ability to carry on the company's business as needed for a beneficial winding up, and to do all acts and sign documents in the company's name, using the company's seal when necessary.

Under clause (c) of sub-section (1), the Company Liquidator can sell the company's movable and immovable property and actionable claims through public auction or private contract, and can transfer such property to any person or body corporate, or sell it in parts. Clause (d) allows the sale of the entire undertaking of the company as a going concern, and clause (e) permits raising money using the company's assets as security.

Clause (f) of sub-section (1) gives the Company Liquidator the power to start or defend any legal proceedings, civil or criminal, in the name of the company. Clause (g) allows the Company Liquidator to invite and settle claims from creditors, employees, or any other claimant, and to distribute the sale proceeds according to the priorities established under the Act. Clause (h) permits inspection of the company's records and returns filed with the Registrar or any other authority.

Under clause (i) of sub-section (1), the Company Liquidator can prove and claim in the insolvency of any contributory for any balance due from that person's estate, and can receive dividends in that insolvency as a separate creditor. Clause (j) allows the Company Liquidator to draw, accept, make, or endorse negotiable instruments such as cheques, bills of exchange, hundis, or promissory notes in the company's name, with the same effect as if the company had done so in its normal business.

Clause (k) of sub-section (1) permits the Company Liquidator to take out letters of administration to a deceased contributory in his official name, and to do any other act needed to obtain payment of money due from a contributory or his estate, with such money deemed due to the Company Liquidator himself for this purpose. Clause (l) allows the Company Liquidator to obtain professional assistance or appoint a professional to help discharge his duties, and to appoint an agent for business he cannot do himself.

Under clause (m) of sub-section (1), the Company Liquidator can take all actions or sign, execute, and verify any paper, deed, document, application, petition, affidavit, bond, or instrument as necessary for winding up the company, distributing assets, or discharging his duties and functions. Clause (n) allows the Company Liquidator to apply to the Tribunal for orders or directions needed for the winding up.

Sub-section (2) states that the exercise of all powers under sub-section (1) is subject to the overall control of the Tribunal.

Sub-section (3) provides that, notwithstanding the powers in sub-section (1), the Company Liquidator shall perform any other duties that the Tribunal may specify.

Official Text

(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 rate ably 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;

(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.