Liquidator

Introduction
In general, the Official Liquidator is appointed by the court or
regulatory authority to oversee the winding up of a company's
affairs, ensuring that the company's assets are properly distributed
to creditors and shareholders in accordance with the law. The Official
Liquidator plays a key role in managing the company's assets, settling
its liabilities, and distributing the remaining funds to stakeholders.
Relevant provision
Section 315 and 316 of the companies act, 2017
Appointment of official liquidator
Section 315
Sub-section (1)
For the purpose of the winding up of companies by the Court, the
Commission shall maintain a panel of persons from whom the Court
shall appoint a provisional manager or official liquidator of a
company ordered to be wound up.
Sub-section (2)
Not to be appointed official liquidator of more than three
companies
A person shall not be appointed as provisional manager or official
liquidator of more than three companies at one point of time.
Sub-section (3)
Composition of expert panel
The panel for the purpose of sub-section (1) shall consist of persons
having at least ten years experience in the field of accounting,
finance or law and as may be specified by the Commission such other
persons, having at least ten years professional experience.
Sub-section (4)
provisional manager is appointed by the Court
Where a provisional manager is appointed by the Court, the Court
may limit and restrict his powers by the order appointing him or by a
subsequent order, but otherwise he shall have the same powers as a
liquidator.
Sub-section (5)
Declaration of Conflict of Interest and Lack of Independence by
Appointed Liquidator
On appointment as provisional manager or official liquidator, as the
case may be, such liquidator shall file a declaration within seven days
from the date of appointment in the specified form disclosing
conflict of interest or lack of independence in respect of his
appointment, if any, with the Court and such obligation shall
continue throughout the term of his appointment.
Sub-section (6)
Appointment of Provisional Manager as Official Liquidator for
Winding Up Proceedings
While passing a winding up order, the Court may appoint a
provisional manager, if any, under clause (c) of sub-section (1) of
section 308, as the official liquidator for the conduct of the
proceedings for the winding up of the company.
Sub-section (7)
Appointment of more than one official liquidator
If more persons than one are appointed to the office of official
liquidator, the Court shall declare whether any act by this Act
required or authorised to be done by the official liquidator is to be
done by all or any one or more of such persons: Provided that in case
of any dispute or any varying stance amongst the liquidators, the
matter shall be referred to the Court for an appropriate order in
chambers in the presence of the parties concerned.
Sub-section (8)
Determination of Security for Official Liquidator upon Appointment
The Court may determine whether any, and what, security is to be
given by any official liquidator on his appointment.
Sub-section (9)
Exceptional Appointment of Official Liquidator Based on Creditor
Application
Notwithstanding anything contained in sub-section (1), the Court
may, on the application of creditors to whom amounts not less than
sixty percent of the issued share-capital of the company being
wound up are due, after notice to the registrar, appoint a person
whose name does not appear on the panel maintained for the
purpose, to be the official liquidator.
Sub-section (10)
Resignation or Quitting of Office by Official Liquidator
An official liquidator shall not resign or quit his office before
conclusion of the liquidation proceedings except for reasons of
personal disability to the satisfaction of the Court.
Sub-section (11)
casual vacancy in the office of an official liquidator
Any casual vacancy in the office of an official liquidator occurred due
to his death, removal or resignation, shall be filled up by the Court by
the appointment of another person from the panel maintained
under sub-section (1): Provided that in case of resignation, the
outgoing official liquidator shall, unless the Court directs otherwise,
continue to act until the person appointed in his place takes charge.
Removal of Name from Panel on Grounds of Misconduct
Sub-section (12)
The Commission may of its own, remove the name of any person
from the panel maintained under sub-section (1) on the grounds of
misconduct, fraud, misfeasance, breach of duties or professional
incompetence:
Provided that the Commission before removing him from the panel
shall give him a reasonable opportunity of being heard.
Sub-section (13)
Code of Conduct and Professional Requirements for Individuals on
Official Liquidator Panel
The person appointed on the panel under this section shall be
subject to such code of conduct and comply with the requirement of
any professional accreditation programs as may be specified by the
Commission.
Removal of official liquidator
Section 316
Sub-section (1)
The Court may, on a reasonable cause being shown including but not
limited to lack of independence or lack of impartiality, remove the
provisional manager or the official liquidator, as the case may be, on
any of the following grounds, namely:
 (a) Misconduct:
This refers to any wrongful or improper conduct by the
liquidator, such as dishonesty, negligence, or abuse of power.
 (b) Fraud or misfeasance:
This refers to more serious acts of wrongdoing by the
liquidator, such as theft, embezzlement, or willful destruction
of the company's assets.
 (c) Professional incompetence or failure to exercise due care
and diligence in performance of the powers and functions:
This refers to the liquidator's failure to meet the standards of
competence and care that are expected of a liquidator. This
could include failing to properly investigate the company's
affairs, failing to take reasonable steps to protect the
company's assets, or failing to comply with the law.
 (d) Inability to act as provisional manager or official liquidator,
as the case may be:
This refers to the liquidator's physical or mental inability to
carry out the duties of the office. This could include illness,
disability, or conflict of interest.
 (e) Conflict of interest during the term of his appointment that
will justify removal:
This refers to any situation where the liquidator's personal
interests conflict with their duties as liquidator. This could
include having a financial interest in the company, or being
related to a party to the winding up.
Sub-section (2)
Court's Authority to Recover Loss or Damage from Liquidator
Due to Fraud, Misfeasance, or Negligence
Where the Court 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 powers and functions, the
Court may recover or cause to be recovered such loss or
damage from the provisional manager or official liquidator, as
the case may be, and pass such other orders as it may think fit.
Mian Muhammad Akbar Khan v. Official Liquidator, 1978
SCMR 90: This case held that the official liquidator has the
power to investigate the affairs of the company even after the
winding up order has been made.

Conclusion
The position of an Official Liquidator holds paramount
importance in the process of winding up or liquidating a
company. the Official Liquidator is a pivotal figure entrusted
with the responsibility of ensuring a smooth and transparent
transition during the winding up of a company. The role of an
Official Liquidator demands expertise, experience, and a
steadfast commitment to the principles of fairness and justice.