Companies Act Section 361 — Summary procedure for liquidation
CHAPTER XX WINDING UP
Commercial / Corporate
Summary
Sub-section (1) sets out when the Central Government can order a company to be wound up using the summary procedure under this Part. This is possible only if the company's assets have a book value of not more than one crore rupees, and the company belongs to a class or classes of companies that have been prescribed by rules.
Sub-section (2) states that once such an order is made, the Central Government must appoint the Official Liquidator as the liquidator of the company.
Sub-section (3) requires the Official Liquidator to immediately take into his custody or control all assets, effects, and actionable claims that the company is entitled to, or appears to be entitled to.
Sub-section (4) says that the Official Liquidator must, within thirty days of being appointed, submit a report to the Central Government in the manner and form prescribed. This report must include the Official Liquidator's opinion on whether any fraud has been committed in the promotion, formation, or management of the company's affairs.
Sub-section (5) provides that after receiving this report, if the Central Government is satisfied that fraud has been committed by the promoters, directors, or any other officer of the company, it may direct a further investigation into the company's affairs. The report of this investigation must be submitted within a time period specified by the Central Government.
Sub-section (6) states that after considering the investigation report, the Central Government may order that the winding up proceed under Part I of this Chapter, or under the provisions of this Part.
Official Text
(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.