Companies Act Section 350 — Company Liquidator to deposit monies into scheduled bank
CHAPTER XX WINDING UP
Commercial / Corporate
Summary
Sub-section (1) requires every Company Liquidator to deposit the money they receive in their official capacity into a scheduled bank, in the manner and at the times that are prescribed. This money must go into a special bank account that the liquidator opens for this purpose. However, if the Tribunal thinks it would be better for the creditors, contributories, or the company itself, it may allow the account to be opened in some other bank that the Tribunal specifies.
Sub-section (2) deals with what happens if a Company Liquidator keeps more than five thousand rupees (or any other amount the Tribunal may allow, on the liquidator's application) for more than ten days. If the liquidator cannot explain this retention to the Tribunal's satisfaction, then under clause (a) they must pay interest on the excess amount at twelve percent per year, plus any penalty the Tribunal decides. Under clause (b), they are also responsible for paying any expenses caused by their default. Under clause (c), the Tribunal may disallow all or part of the liquidator's remuneration, as it considers fair, or may remove the liquidator from office.
Official Text
(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.