B.A. LL.B.

(INTEGRATED LAW DEGREE COURSE)

CORPORATE LAW- II (VI SEMESTER)

“RESEARCH PAPER”

“ROLE OF LIQUIDATORS IN WINDING UP PROCESS”

SUBMISSION TO: SUBMITTED BY:

MISS MUKTA JANGIR JYOTI YADAV

FACULTY OF CORPORATE LAW- II 17RU11010

DESIGNATION: ASSISTANT PROFESSOR SESSION:-2017-2022

SEMESTER:-VI

1
 ACKNOWLEDGEMENT

I take this opportunity to express our humble gratitude and personal regards to MISS MUKTA
JANGIR for inspiring me and guiding me during the course of this project work and also for her
cooperation and guidance from time to time during the course of this project work on the topic
“ROLE OF LIQUIDATORS IN WINDING UP PROCESS”

Date of Submission: 03-03-2020

Name of Student: JYOTI YADAV

2
Table of Contents
RESEARCH MYTHOLOGY............................................................................................................................4
RESEARCH QUESTION...................................................................................................................................5
RESEARCH OBJECTIVE.................................................................................................................................5
ABSTRACT......................................................................................................................................................6
INTRODUCTION..............................................................................................................................................7
SECTION 275. OF COMPANIES ACT, 2013-COMPANY LIQUIDATORS AND THEIR APPOINTMENTS:......8
APPOINTMENT OF OFFICIAL LIQUIDATOR (SEC. 359).............................................................................9
POWERS AND DUTIES OF COMPANY LIQUIDATOR....................................................................................9
POWERS AND DUTIES OF COMPANY LIQUIDATOR IN VOLUNTARY WINDING UP (SEC. 314):..............11
DUTIES OF THE LIQUIDATOR UNDER THE COMPANIES ACT...........................................................12
LIQUIDATORS IN A WINDING UP BY THE COURT..............................................................................12
DUTIES OF NOTICE............................................................................................................................12
DUTY TO KEEP CERTAIN FINANCIAL AND ADMINISTRATIVE RECORDS...........................................12
DUTY TO HOLD CERTAIN MEETINGS................................................................................................13
DUTY OF PROVIDING INFORMATION................................................................................................14
DUTY TO EXAMINE THE CONDUCT OF OFFICERS OF THE COMPANY...............................................15
DUTY TO RECOVER AND REALIZE THE COMPANY’S ASSETS............................................................15
REMOVAL AND REPLACEMENT OF LIQUIDATOR................................................................................17
CUSTODY OF COMPANY'S PROPERTIES..............................................................................................18
DISSOLUTION OF COMPANY BY TRIBUNAL........................................................................................18
CONCLUSION.....................................................................................................................................20
REFERENCE.......................................................................................................................................21

3
RESEARCH MYTHOLOGY

Aims and Objectives

The aim of the assignment is to present a detailed study of the topic “ROLE OF LIQUIDATORS IN
WINDING UP PROCESS” forming a concrete informative capsule of the same with an insight into
its relevance in the Competition Law.

Research Plan
The researchers have followed Doctrinal method

Method of Writing
The researcher has used both a descriptive and analytical method of writing in order to
understand the issues better. The researcher has also relied on case law, to get an in depth
understanding of the subject. The method of writing followed in the course of this research
project is primarily analytical.

Sources of Data
The researcher has used secondary sources in order to obtain sufficient data for this project,
namely,
 Online Research Portals

 Articles

4
RESEARCH QUESTION

The main question arises on the present context is that when the company incurs heavy debt in
this scenario the winding up of the company leads to a basic solution to resolve debt. As the
main question arises here that what are the liabilities and what are the duties of the liquidators of
a company in the winding up process?

As to the fact of this research paper concerns about the fact that how the liquidators acts in the
scenario of winding up process?

RESEARCH OBJECTIVE

The main objective of this research is to find the answer of the aforementioned questions as what
are the duties and liabilities of liquidator under the process of winding up? This question
basically deals with the arising issues of company law that is to be covered. The vast borders of
company law show a prima facie that the concept relating to companies are very wide and going
through the technicality of the concept of winding up as it was stated u/s 275 of the Companies
Act, 2013.

With reference to the second question arises out of the research is that how liquidators act under
the process of winding up? It basically deals with the provisions of Insolvency and Bankruptcy
Code that deals with all the related matters uttering with references to the winding up process
after 2018.

5
ABSTRACT

The research paper mainly focuses that, when a company incurs heavy debt so as to render it
infeasible to carry on the affairs a grave menace surfaces whereby the process of winding up
becomes inevitable and, as such, the matters related to debts, obligations and surplus, if any be
settled. As for the appointment of a liquidator there is no specific provision for an independent or
third party save the official liquidator attached to the High Court. The liquidator is an agent of
the company for the purpose of the winding-up. In this charge of his duties he looks into the
interest of the creditors, contributories and the company during the proceeding of winding -up
the liquidator is an officer of the tribunal but thereby he does not become the representative of
the tribunal, with a status recognised by the statute and powers and functions which are not
identical with those of the court. It is to this end that the liquidator comes to play a pivotal role
therein.

6
INTRODUCTION

In general sense, liquidator is a person who conducts the whole process of liquidation. When a
company is about to wind up it is required to realise the assets of the company and it should be
distributed among the “debenture holders”, “creditors” “shareholders” etc. For this object a
person is appointed who does all the necessary things before the company “cease to exist”. This
person is called Liquidator under Company Law. So liquidator comes into scene in the time of
winding up of a company. The process of winding up can be two types. These are following
below:

1. Compulsory winding up

2. Voluntary winding up.

Official liquidator is appointed in the time of compulsory winding up. The Official liquidator is
the officer of high court. He is appointed from the date of the order of the winding up. He has
certain duties to discharge under the Companies Act and he has to do all the required things in
respect of compulsory winding up of a company according to the instruction of the high court. In
this project I have discussed the role of official liquidator. Firstly, I, have discussed section275
then I have discussed powers and duties of liquidators. Then I discussed removal and
replacement of liquidators under the companies’ act 2013.

7
SECTION 275. OF COMPANIES ACT, 2013-COMPANY LIQUIDATORS AND THEIR

APPOINTMENTS:

Section 275. of Companies Act, 2013 reads as follows- Company Liquidators and their
appointments. — (1) For the purposes of winding up of a company by the Tribunal, the Tribunal
at the time of the passing of the order of winding up, shall appoint an Official Liquidator or a
liquidator from the panel maintained under sub-section (2) as the Company Liquidator. (2) The
provisional liquidator or the Company Liquidator, as the case may be, shall be appointed from a
panel maintained by the Central Government consisting of the names of chartered accountants,
advocates, company secretaries, cost accountants or firms or bodies corporate having such
chartered accountants, advocates, company secretaries, cost accountants and such other
professionals as may be notified by the Central Government or from a firm or a body corporate
of persons having a merger of such professionals as may be prescribed and having at least ten
year experience in company matters. (3) Where a provisional liquidator is appointed by the
Tribunal, the Tribunal may limit and restrict his powers by the order appointing him or it or by a
subsequent order, but otherwise he shall have the same powers as a liquidator. (4) The Central
Government may dismiss the name of any person or firm or body corporate from the panel
maintained under sub-section (2) on the grounds of misconduct, fraud, misfeasance, breach of
duties or professional incompetence: Provided that the Central Government before removing him
or it from the panel shall give him or it a reasonable opportunity of being heard. (5) The terms
and conditions of appointment of a provisional liquidator or Company Liquidator and the fee
payable to him or it shall be specified by the Tribunal on the basis of task required to be
performed, experience, qualification of such liquidator and size of the company. (6) On
appointment as provisional liquidator or Company Liquidator, as the case may be, such
liquidator shall file a declaration within seven days from the date of appointment in the
prescribed form disclosing clash of interest or lack of independence in respect of his
appointment, if any, with the Tribunal and such obligation shall continue throughout the term of
his appointment. (7) While passing a winding up order, the Tribunal may appoint a provisional
liquidator, if any, appointed under clause (c) of sub-section (1) of section 273 1, as the Company
Liquidator for the conduct of the proceedings for the winding up of the company.

1
Section 273 (1) (c) appoint a provisional liquidator of the company till the making of a winding up order

8
APPOINTMENT OF OFFICIAL LIQUIDATOR (SEC. 359)2 

For the purposes of this Act, so far as it relates to the winding up of companies by the Tribunal,
the Central Government may appoint as many Official Liquidators, Joint, Deputy or Assistant
Official Liquidators as it may consider necessary to discharge the functions of the Official
Liquidator. The liquidators so appointed under this section shall be whole-time officers of the
Central Government. The salary and other allowances of the Official Liquidator, Joint Official
Liquidator, Deputy Official Liquidator and Assistant Official Liquidator shall be paid by the
Central Government.

POWERS AND DUTIES OF COMPANY LIQUIDATOR

Powers and duties of Company Liquidator in case of winding up by tribunal (Sec. 290):

1) Subject to directions by the Tribunal, if any, in this respect, 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 mandatory, 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;
2
Section 359 Appointment of Official Liquidator- (1) For the purposes of this Act, so far as it relates to the
winding up of companies by the Tribunal, the Central Government may appoint as many Official Liquidators, Joint,
Deputy or Assistant Official Liquidators as it may consider necessary to discharge the functions of the Official
Liquidator.
(2) The liquidators appointed under sub-section (1) shall be whole-time officers of the Central Government.
(3) The salary and other allowances of the Official Liquidator, Joint Official Liquidator, Deputy Official Liquidator
and Assistant Official Liquidator shall be paid by the Central Government

9
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 across 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; 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;
j) 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;
k) 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;
l) 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
o) to apply to the Tribunal for such orders or directions as may be necessary for the winding
up of the company.

10
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.

POWERS AND DUTIES OF COMPANY LIQUIDATOR IN VOLUNTARY WINDING UP

(SEC. 314):

1. The Company Liquidator shall perform such functions and discharge such duties as may
be determined from time to time by the company or the creditors, as the case may be.
2. The Company Liquidator shall settle the list of contributories, which shall be prima facie
evidence of the liability of the persons named therein to be contributories.
3. The Company Liquidator shall call general meetings of the company for the purpose of
obtaining the sanction of the company by ordinary or special resolution, as the case may
require, or for any other purpose he may consider necessary.
4. The Company Liquidator shall maintain regular and proper books of account in such
form and in such manner as may be prescribed and the members and creditors and any
officer authorised by the Central Government may inspect such books of account.
5. The Company Liquidator shall prepare quarterly statement of accounts in such form and
manner as may be prescribed and file such statement of accounts duly audited within
thirty days from the close of each quarter with the Registrar, failing which the Company
Liquidator shall be punishable with fine which may extend to five thousand rupees for
every day during which the failure continues.
6. The Company Liquidator shall pay the debts of the company and shall adjust the rights of
the contributories among themselves.
7. The Company Liquidator shall observe due care and diligence in the discharge of his
duties.
8. If the Company Liquidator fails to comply with the provisions of this section except sub-
section (5) he shall be punishable with fine which may extend to ten lakh rupees.

11
DUTIES OF THE LIQUIDATOR UNDER THE COMPANIES ACT

LIQUIDATORS IN A WINDING UP BY THE COURT

Various duties are imposed on liquidators by the Companies Act and these may be conveniently
divided into the following categories:

 Duties of notice;
 Duty to keep certain financial and administrative records;
 Duty to hold certain meetings;
 Duty to provide information;
 Duty to examine the conduct of officers of the company;
 Duty to get in and distribute the property of the company.

DUTIES OF NOTICE

The first duty assigned to a liquidator is that of giving notice of his appointment. Section 235(1)
provides that where in a mandatory winding up a person other than the Official Receiver is
appointed Liquidator, such person shall not be capable of acting as liquidator until he has
notified his appointment to the Registrar and given satisfactory security, if any, for the good
performance of his functions. Likewise, in a voluntary winding up the liquidator must, within
fourteen days from his appointment, deliver to the Registrar, for registration, a notice of his
appointment. Moreover; all letters, invoices or orders issued must describe the company as
undergoing liquidation.

DUTY TO KEEP CERTAIN FINANCIAL AND ADMINISTRATIVE RECORDS

The liquidator is obliged to keep proper books of account and administrative records. In terms of
Section 2403 the liquidator in a compulsory winding up must keep proper books in which he is to
record all minutes of proceedings at meetings and in which he is to record all minutes of
proceedings at meetings and in which he is to put down all other matters which may be

3
Section 240 companies Act, 2013- Notwithstanding anything in any other law for the time being in force, the
liability in respect of offences committed under this Act by the officers in default, of the transferor company prior to
its merger, amalgamation or acquisition shall continue after such merger, amalgamation or acquisition.

12
prescribed by the Court or Act. These books may also be examining by any creditor or
contributory subject to the Court’s control. (Section 257).

Ian Fletcher, when examining sections 143(2) of the Insolvency Act which is similar to what the
Act contains, states what the books and records which must be kept are. These are divided into:

Administrative records; and

Financial records.

Moreover, once a person has been appointed liquidator in a compulsory winding up, he is to
notify the Registrar of any bank accounts he shall use whenever he receives or effects payments
in the name and on behalf of the company and he is prohibited from receiving or making any
payments before he has made this notification. The liquidator must deposit amounts received by
him into the account notified to the Registrar and he may not retain for more than ten days any
sum exceeding LM200 or such other amount as he may have been authorized to retain by the
Registrar. In case of default, he shall be liable to pay interest on the excess and to the payment of
any expenses caused by his default. In addition, he shall forfeit a part of his remuneration (which
part shall be established by court) and shall be removed from office.

The liquidator, especially where the company is being wound up by court order, must be very
scrupulous in the upkeep of these accounts. Section 242 requires the liquidator to send to the
Registrar an account of his receipts and payments, at such times as may be prescribed but not
less than twice a year during the tenure of his office. The Registrar may order the auditing of the
account at the company’s expense. When this occurs, the liquidator must furnish the auditor with
all the information the latter may require as well as he must enable the auditor to inspect the
books and accounts kept by the liquidator.

DUTY TO HOLD CERTAIN MEETINGS

Liquidators in a voluntary liquidation must call a General Meeting of the company if the winding
up continues for more than one year and they are also bound to call a General Meeting of the
company at each succeeding period of twelve months or at the first convenient date within three
months form the end of the period of twelve months or within such longer period as the Registrar
13
may permit. During this meeting the liquidator is to lay an account of his acts and dealings and
of the conduct of the liquidation procedure during the preceding twelve months, in which he
must include a summary of receipts and expenditure (s.237/238). Moreover, on the completion of
the winding up process, the voluntary liquidator must call a final meeting of the members and in
a creditor’s winding up, even a meeting of the creditors, and lay before them an account and
explanation of the winding up process (274/284). If such a meeting is not held the liquidator is
liable to a penalty since he has breached his statutory duties. This final Meeting of the
company’s creditors must also be called by the liquidator in a compulsory winding up ‘if it
appears to him that for all practical purposes the winding up is complete.’ (S244(1) of CA and
S146 of English insolvency act)

DUTY OF PROVIDING INFORMATION

This duty is owed to the creditors and contributories, to the Official Receiver and where the
winding up continues for more than one year to the Registrar.

Liquidators are to inform creditors and contributories of the development of the winding up
procedure. This is done by the holding of a number of meetings. We have seen that the liquidator
is bound to hold meetings at the beginning of the liquidation procedure and at the end of this
process. Moreover, in the case of a voluntary winding up, a meeting must be held if the
liquidation takes more than one year to complete. Creditors and contributories may also
requisition meetings. However, this general power is only available in a Compulsory winding up
and may be exercised when the creditors or contributories so resolve or where a request is made
in writing by one tenth in value of the creditors and contributories. (S239(2) CA 168 (2) of
insolvency act).

In a compulsory winding up the liquidator also owes this duty to the Official Receiver. In fact,
Section 235 (1) provides that where a person other than the Official Receiver is appointed
liquidator, the appointee shall give the Official Receiver all the information and access to and
facilities for inspecting the books and documents of the company and all the aid that may be
required so as to enable this officer to perform his duties under the Act.

14
In a compulsory winding up the registrar may require a liquidator to answer any inquiry in
relation to any winding up in which he is involved. Where the winding up takes longer than one
year to complete, liquidators are bound to report on the conduct of the liquidation to the
Registrar (S.322 CA). This report must be written in the form of a statement, sent not later than
thirty days after the expiration of the period of twelve months from the commencement of the
liquidation and thereafter at least every six months until the winding up is completed.

In addition, there may be occasions on which the liquidator will be obliged to give information
on behalf of the company in the course of legal proceedings in which the company may be
involved. The liquidator is under a duty to take all the proper steps to ascertain the correct
answers where he does not have such answers from his own knowledge.

DUTY TO EXAMINE THE CONDUCT OF OFFICERS OF THE COMPANY

The liquidator has a duty to investigate the conduct of the company’s past and present officers
and to consider whether they are guilty of any wrongful conduct in managing the company’s
affairs. The liquidator may obtain all information which he reasonably requires in the course of
winding up and consequently all officers of the company are bound to inform him of any
relevant issues and in case of default they will be committing an offence.

Criminal proceedings may be taken against any officer of the company who in the twelve months
prior to the deemed date of dissolution, had concealed assets or documents or disposed of assets
or otherwise acted in a fraudulent manner. In civil proceedings these officers may be found
responsible to pay back to the company any monies due to the company or even damages. The
law also provides for proceedings in case of wrongful trading by directors and fraudulent trading
by any officer of the company.

DUTY TO RECOVER AND REALIZE THE COMPANY’S ASSETS

The fundamental duty of the liquidator is that of the recovery and realization of the assets and all
his powers are designed to ensure the effective discharge of this duty. The liquidator must recoup
the assets of the company for the benefit of the creditors and ultimately the members, and he
must realize the same so as to effect the best possible distribution.

15
The Companies Act clarifies the steps which the liquidator is to take in order to fulfill this duty.
On his appointment, the liquidator should obtain possession of all books, documents, papers,
money and other property of the company which may be in the hands of any person. (S237).
The liquidator must ensure that the amount of assets available for distribution is the maximum.
Therefore, he must recover any debts which are due to the company. He may also commence and
continue proceedings in the name of the company and may also compromise such proceedings.
Once al the property of the company has been recovered the liquidator must realize the assets of
the company. Where the liquidator effects a realization of the company’s assets by way of a sale,
he may act in the name of the company and execute or sign all the documents which may be necessary.

The next step requires the liquidator to pay the company’s creditors. Section 249 states that in a
compulsory winding up the Court shall cause the assets of the company to be collected and to be
applied in the discharge of the company’s liabilities. In practice, this duty is fulfilled by the
liquidator and not by the court as a result of section 263 which enables the liquidator to perform
these functions.
Above all the liquidator must make sure that payments are made in accordance with the rules of
priority, that payment is only effected when claims have been proved and that no proved claims
are omitted because otherwise he will be personally responsible for non-payment.
Where the assets are insufficient to satisfy the company’s liabilities the liquidator must divide the
proceeds by way of dividend between those creditors who have proved their debts and each
creditor is paid in accordance with his order of priority and in proportion to the amount due to
him.
Finally, in terms of Section 324 the liquidator is obliged to keep the books of the company for a
period of ten years from the date of the striking off of the company’s name from the Registrar.
Undoubtedly the company’s act sets both the powers and the duties of the liquidator and clarifies
the liquidator’s position. Indeed, it renders the office holder accountable towards the company,
creditors and the Court.

Re: Standard Aluminium & Brass Works Ltd case; in this case it was held that, “where a
contributory petition for winding up of a company, the court must from first to last keep a close
eye on two things. The first is the unwillingness of the court to interfere with shareholders in the
management of their own affairs, including the question whether the business shall be continued

16
or not, and the second is that there is, in fact, jurisdiction in an extreme case to wind up a
company at the instance of a contributory, notwithstanding that he is not supported by a majority
of shareholders, if it is just and equitable that the company should be wound up”4

In British Water Gas Syndicate v. Notts Derby Water Gas Co. Ltd 5 it was held that, however
prosperous and solvent a company may be, if the members wish the company to be wound up,
they can do so by passing a special resolution to that effect without giving any reasons and the
statutory right can neither be interfered by the court nor can be taken away by the articles of the
company. The omission to convene a meeting of the creditors, under Sec.500 and subsequent
holding of thereof will not affect the date of commencement of winding up

REMOVAL AND REPLACEMENT OF LIQUIDATOR

1. The Tribunal may, on a reasonable cause being shown and for reasons to be recorded in
writing, remove the provisional liquidator or the Company Liquidator, as the case
May be, as liquidator of the company on any of the following grounds, namely: —
a. Misconduct;
b. Fraud or misfeasance;
c. Professional incompetence or failure to exercise due care and diligence in
performance of the powers and functions;
d. Inability to act as provisional liquidator or as the case may be, Company
Liquidator;
e. Conflict of interest or lack of independence during the term of his appointment
that would justify discard.
2. In the event of death, resignation or removal of the provisional liquidator or as the case
may be, Company Liquidator, the Tribunal may transfer the work assigned to him or it to
another Company Liquidator for reasons to be recorded in writing.
3. Where the Tribunal is of the opinion that any liquidator is responsible for causing any
loss or damage to the company due to fraud or misfeasance or failure to exercise due care
and diligence in the performance of his or its powers and functions, the Tribunal may

4
AIR 1925 Bom321; (1925) 27 BOMLR 574.
5
WN 204 (1889).

17
 recover or cause to be recovered such loss or damage from the liquidator and pass such
other orders as it may think fit.
4. The Tribunal shall, before passing any order under this section, provide a reasonable
opportunity of being heard to the provisional liquidator or, as the case may be, Company
Liquidator.

CUSTODY OF COMPANY'S PROPERTIES

1. Where a winding up order has been made or where a provisional liquidator has been
appointed, the Company Liquidator or the provisional liquidator, as the case may be,
shall, on the order of the Tribunal, forthwith take into his or its custody or control all the
property, effects and actionable claims to which the company is or appears to be entitled
to and take such steps and measures, as may be necessary, to protect and preserve the
properties of the company.

2. Notwithstanding anything contained in sub-section (1), all the property and effects of the
company shall be deemed to be in the custody of the Tribunal from the date of the order
for the winding up of the company.

3. On an application by the Company Liquidator or otherwise, the Tribunal may, at any time
after the making of a winding up order, require any contributory for the time being on the
list of contributories, and any trustee, receiver, banker, agent, officer or other employee
of the company, to pay, deliver, surrender or transfer forthwith, or within such time as the
Tribunal directs, to the Company Liquidator, any money, property or books and papers in
his custody or under his control to which the company is or appears to be entitled.

DISSOLUTION OF COMPANY BY TRIBUNAL. —

1. when the affairs of a company have been completely wound up, the Company Liquidator
shall make an application to the Tribunal for dissolution of such company.
2. The Tribunal shall on an application filed by the Company Liquidator under sub-section
(1) or when the Tribunal is of the opinion that it is just and reasonable in the
circumstances of the case that an order for the dissolution of the company should be

18
 made, make an order that the company be dissolved from the date of the order, and the
company shall be dissolved accordingly.
3. A copy of the order shall, within thirty days from the date thereof, be forwarded by the
Company Liquidator to the Registrar who shall record in the register relating to the
company a minute of the dissolution of the company.
4. If the Company Liquidator makes a defact in forwarding a copy of the order within the
period specified in sub-section (3), the Company Liquidator shall be punishable with fine
which may extend to five thousand rupees for every day during which the default
continues.

19
CONCLUSION

The liquidator can apply to the Court for the release of the duties once the followings have been
accomplished:

 all the assets of the company have been realized (i.e. all assets have been sold and
converted to cash);
 investigations related to the winding-up proceedings are completed; and
 a final dividend (if any) has been paid to the creditors to settle the debts

The liquidator will send notices, together with a summary of the relevant receipts and payments
in the liquidation, to the creditors and contributories of the company of the intention to apply to
the Court for release from the duties as liquidator. At this point, any creditor or contributory has
21 days from the date of the notice to raise objection to the intended release of the liquidator.

After obtaining the order for release from the court, the liquidator will file a “Certificate of
Release of Liquidator” with the Registrar of Companies. The company shall be dissolved two
years after the filing of the “Certificate of Release of Liquidator”.

20
REFERENCE

 Abbott, Andrew, The System of Professions, University of Chicago Press, 1988, url: http:
//www.press.uchicago.edu/ucp/books/book/chicago/S/bo5965590.html (visited on 02/03/2020).
 Burman, Anirudh and Shubho Roy, “Building an Institution of Insolvency Practitioners in
India”, in: IGIDR Working Paper WP-2015-033 (2015), issn: 1556-5068, doi: 10.2139/ssrn.
2725800, url: http://www.ifrogs.org/PDF/WP-2015-033.pdf (visited on 02/03/2020).
 Committee, Bankruptcy Law Reforms, The report of the Bankruptcy Law Reforms Committee
Volume I: Rationale and Design, India, Nov. 4, 2015, url: http://ibbi.gov.in/
BLRCReportVol1_04112015.pdf (visited on 02/03/2020).
 India, Insolvency and Bankruptcy Code, 2016, May 28, 2016, url: http://www.indiacode.
nic.in/acts-in-pdf/2016/201631.pdf (visited on 03/03/2020).
 Insolvency and Bankruptcy Board of India, Insolvency and Bankruptcy Board of India
(Insolvency Professional Agencies) Regulations, 2016, 2016, url: http://ibbi.gov.in/webadmin/
pdf/legalframwork/2017/Jul/IPA%20REGULATIONS_professional_agencies.pdf (visited on
03/03/2020).
 Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, 2016,
url:http://ibbi.gov.in/webadmin/pdf/legalframwork/2018/Apr/word%20copy%20Updated
%20upto%2001.04.2018%20IP%20REGULATIONS_20180411%2016:15:54.pdf (Visited on
03/03/2020).

21