Companies Act Section 299 — Power to summon persons suspected of having property of company, etc
CHAPTER XX WINDING UP
Commercial / Corporate
Summary
Sub-section (1) allows the Tribunal, after a provisional liquidator has been appointed or a winding up order has been passed, to summon before it any officer of the company, any person known or suspected to hold company property, books, or papers, any person known or suspected to owe money to the company, or any person the Tribunal believes can give information about the company's promotion, formation, trade, dealings, property, books, papers, or affairs.
Sub-section (2) permits the Tribunal to examine any summoned officer or person on oath about these matters. This examination can be done orally, through written questions, or through a sworn written statement. If the examination is oral, the Tribunal may write down the answers and require the person to sign them.
Sub-section (3) allows the Tribunal to require any summoned officer or person to produce any books and papers relating to the company that are in their custody or power. However, if the person claims a lien (a legal right to keep the items) on the books or papers produced, the production is without prejudice to that lien, meaning the lien is not affected. The Tribunal has the power to decide all questions relating to that lien.
Sub-section (4) empowers the Tribunal to direct the liquidator to file a report before it regarding any debt owed to the company or any property of the company that is in the possession of other persons.
Under clause (a) of sub-section (5), if the Tribunal finds that a person is indebted to the company, it may order that person to pay the provisional liquidator or the liquidator the amount owed, or any part of it, at such time and in such manner as the Tribunal considers just. This payment may be in full discharge of the whole amount or not, as the Tribunal thinks fit, and may include or exclude the costs of the examination.
Under clause (b) of sub-section (5), if the Tribunal finds that a person is in possession of any property belonging to the company, it may order that person to deliver that property, or any part of it, to the provisional liquidator or the liquidator, at such time, in such manner, and on such terms as the Tribunal considers just.
Sub-section (6) states that if any summoned officer or person fails to appear before the Tribunal at the appointed time without a reasonable cause, the Tribunal may impose an appropriate cost on that person.
Sub-section (7) provides that 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.
Sub-section (8) states that any person who makes a payment or delivery in accordance with an order made under sub-section (5) is, unless the order directs otherwise, discharged from all liability whatsoever in respect of that debt or property.
Official Text
(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 (5 of 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.