Section 292 of Companies Act, 2013 – Exercise and control of Company Liquidator’s powers

  • Updated Till : December 03, 2022

SECTION 292. EXERCISE AND CONTROL OF COMPANY LIQUIDATOR’S POWERS

[Effective from 15th December, 2016]

(1) Subject to the provisions of this Act, the Company Liquidator shall, in the administration of the assets of the company and the distribution thereof among its creditors, have regard to any directions which may be given by the resolution of the creditors or contributories at any general meeting or by the advisory committee.

(2) Any directions given by the creditors or contributories at any general meeting shall, in case of conflict, be deemed to override any directions given by the advisory committee.

(3) The Company Liquidator—

(a)   may summon meetings of the creditors or contributories, whenever he thinks fit, for the purpose of ascertaining their wishes; and

(b)   shall summon such meetings at such times, as the creditors or contributories, as the case may be, may, by resolution, direct, or whenever requested in writing to do so by not less than one-tenth in value of the creditors or contributories, as the case may be.

(4) Any person aggrieved by any act or decision of the Company Liquidator may apply to the Tribunal, and the Tribunal may confirm, reverse or modify the act or decision complained of and make such further order as it thinks just and proper in the circumstances.

Applicable Rules

Companies (Winding Up) Rules, 2020

[Effective from 1st April, 2020]

MEETINGS OF CREDITORS AND CONTRIBUTORIES

Rule 44. Application of rules to meetings.—Subject to any directions given by the Tribunal, rules as hereinafter set out shall apply to meetings of creditors and contributories as may be convened in pursuance of sub-section (3) of section 287 and sub-section (3) of section 292.

Rule 45. Notice of meeting.—(1) The Company Liquidator shall summon meetings of creditors and contributories by giving not less than fourteen days’ notice by sending individually to every creditor of the company a notice of the meeting of creditors, and to every contributory of the company a notice of the meeting of contributories, by sending notice by registered post or speed post or by electronic means so as to reach such person in not less than fourteen days before the date fixed for the meeting:

Provided that where the number of creditors or contributories, as the case may be, exceeds five hundred, the Company Liquidator shall also give a fourteen days’ notice of the time and place appointed for the meeting by advertisement in one daily newspaper in the English language and one daily newspaper in the principal regional language circulating in the State or Union territory concerned.

(2) The notice to each creditor shall be sent to the address given in his proof as referred to in rule 101 or, if he has not so proved, to the address given in the statement of affairs, or, to the address given in the books of the company, or to such other address as may be known to the person summoning the meeting, and the notice to each contributory shall be sent to the address mentioned in the books of the company as the address of such contributory or to such other address as may be known to the person summoning the meeting.

(3) The notices shall be in Forms WIN 25 to 29 as may be applicable.

Rule 46. Place and time of meeting.—Every meeting shall be held at such place and time as the Company Liquidator considers convenient for the majority of the creditors or contributories or both and different times or places or both may, if thought fit, be appointed for the meeting of the creditors or contributories or both.

Rule 47. Notice of first or other meeting to officers of company.—(1) The Company Liquidator shall also give, to each of the officers of the company, who in his opinion ought to attend the first or any other meeting of creditors or contributories, fourteen days’ notice in Form WIN 30 of the time and place appointed for such meeting and the notice may either be delivered by hand or sent by registered post or speed post or by electronic means as may be convenient, and it shall be the duty of every officer who receives notice of such meeting to attend if so required by the Company Liquidator, and if any such officer fails to attend, the Liquidator may report such failure to the Tribunal and the Tribunal may issue such directions to such person as it thinks fit.

(2) The Company Liquidator, if he thinks fit, may instead of requiring any of the officers of the company to attend the meeting as aforesaid, require such officer to answer any interrogatories or to furnish in writing any information that he may require for purposes of such meeting, and if such officer fails to answer the interrogatories or furnish such information, the liquidator shall report such failure to the Tribunal and the Tribunal may issue such directions to such officer as it may think fit.

Rule 48. Proof of notice.—An affidavit by any person who sent the notice, that such notice has been duly sent, shall be sufficient evidence of the notice having been sent to the person to whom the same was addressed and the affidavit shall be filed in the Tribunal in Form WIN 31.

Rule 49. Costs of meeting.—The cost of convening and conducting the meeting of the creditors or contributories shall be met out of the assets of the company.

Rule 50. Chairman of meeting.—The Company Liquidator or some person nominated by him shall be the Chairman of the meeting and the nomination shall be in Form WIN 32.

Rule 51. Resolution at creditors’ meeting.—At a meeting of creditors, a resolution shall be deemed to be passed, when a majority in value of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution and in a winding up by the Tribunal, the value of a creditor, shall, for the purposes of a first meeting of the creditors meeting held under section 287, be deemed to be the value as shown in the books of the company, or the amount mentioned in his proof as referred to rule 101, whichever is less and for the purposes of any other meeting, the value for which the creditor has proved his debt or claim.

Rule 52. Resolution of contributories’ meeting.—At a meeting of the contributories, a resolution shall be deemed to be passed when a majority in value of the contributories present personally or by proxy and voting on the resolution have voted in favour of the resolution and the value of the contributories shall be determined according to the number of votes to which each contributory is entitled as a member of the company under the provisions of the Act, or the articles of the company, as the case may be.

Rule 53. Copies of resolution to be filed.—The Company Liquidator shall file in the Tribunal a copy certified by him of every resolution passed at a meeting of the creditors or contributories and the Registry shall keep in each case a file of such resolution.

Rule 54. Non-receipt of notice by creditor or contributory.—Where a meeting of creditors or contributories is summoned by notice, the proceedings and resolution at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding that some creditors or contributories may not have received the notice sent to them.

Rule 55. Adjournments.—The chairman of the meeting may, with the consent of the creditors or contributories present in the meeting, as the case may be , adjourn it from time to time, but the adjourned meeting shall be held at the same place as the original meeting unless in the resolution for adjournment another place is specified or unless the Tribunal otherwise orders.

 

Rule 56. Quorum.—A meeting may not act for any purpose except for adjournment thereof unless there are present or represented thereat in the case of a creditors’ meeting at least three creditors entitled to vote or in the case of a meeting of contributories at least three contributories or all the creditors entitled to vote or all the contributories if the number of creditors entitled to vote or the number of contributories, as the case may be does not exceed three.

Rule 57. Procedure in absence of quorum.—If, within half an hour from the time appointed for the meeting, a quorum of creditors or contributories, as the case may be, is not present or represented, the meeting shall be adjourned to the same day in the following week at the same time and place and if at such adjourned meeting, the quorum is not present, at least two creditors or contributories present in person shall form the quorum and may transact the business for which the meeting was convened: Provided that if at the adjourned meeting also two creditors or contributories, as the case may be, are not present, the chairman of the meeting shall submit his report to the Tribunal for such directions as the Tribunal may deem fit.

Rule 58. When creditor can vote.—In the case of a meeting of creditors held under section 287 or of any adjournment thereof, a person shall not be entitled to vote as a creditor unless he has duly lodged with the Company Liquidator not later than the time mentioned for that purpose in the notice convening the meeting, a proof of the debt which he claims to be due to him from the company and in the case of other meeting of creditors, a person shall not be entitled to vote as a creditor unless he has lodged with the Company Liquidator a proof of the debt which he claims to be due to him from the company and such proof has been admitted wholly or in part before the date on which the meeting is held:

Provided that this rule and rules 59 to 62 shall not apply to a meeting of creditors held prior to the meeting of creditors under section 287:

Provided further that this rules shall not apply to any creditors or class of creditors who by virtue of these rules or any directions given thereunder are not required to prove their debts.

Rule 59. Case in which creditors may not vote.—A creditor shall not vote in respect of any unliquidated or contingent debt or any debt, value of which is not ascertained, nor shall a creditor vote in respect of any debt secured by a current bill of exchange or promissory note held by him unless he is willing to treat liability to him thereon of every person who is liable thereon antecedently to the company, and against whom no order of adjudication has been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for purposes of dividend, to deduct it from his proof mentioned above.

Rule 60. When secured creditor can vote.—For the purposes of voting at a meeting, in a winding up by the Tribunal, a secured creditor shall, unless he surrenders his security, state in his aforesaid proof, the particulars of his security, the date when it was given and the value at which it is assessed by a registered valuer, and shall be entitled to vote only in respect of the balance due to him, if any, after deducting the value of his security.

Rule 61. Effect of voting by a secured creditor.—If a secured creditor votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Tribunal, on an application by such creditor, is satisfied that the omission to value the security was due to inadvertence.

Rule 62. Procedure when secured creditor votes without surrendering security.—The liquidator may within fifteen days from the date of the meeting at which a secured creditor voted on the basis of his valuation of the security, require him to give up the security for the benefit of the creditors generally on payment of the value so estimated by him, and may, if necessary, apply to the Tribunal for an order to compel such creditor to give up the security:

Provided that the Tribunal may, for good cause shown, permit the said creditor to correct his valuation before being required to give up the security, upon such terms as to costs as the Tribunal may consider just.

Rule 63. Admission or rejection of proof for purposes of voting.—The chairman of the meeting shall have power to admit or reject a proof for the purposes of voting, but his decision shall be subject to appeal to the Tribunal, and if he is in doubt whether a proof shall be admitted or rejected, he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained.

(1) The chairman of the meeting shall cause minutes of the proceedings at the meeting to be drawn up and fairly entered in the Minute Book within 30 days and the minutes shall be signed by him or by the chairman of the next meeting.

(2) A list of creditors and contributories present at every meeting shall be made and kept in Form WIN 33.

Rule 65. Report to Tribunal.—The Company Liquidator shall, within seven days of the conclusion of the meeting, report the result thereof to the Tribunal in Form No. WIN 34.

PROXIES IN RELATION TO MEETINGS OF CREDITORS AND CONTRIBUTORIES

Rule 66. Voting by proxies.—A creditor or contributory may vote either in person or by proxy, and where a person is authorised in the manner provided by section 113 to represent a body corporate at any meeting of creditors or contributories, such person shall produce to the Company Liquidator or and chairman of the meeting, as the case may be, a copy of the resolution so authorising him and such copy must be certified to be a true copy by a director, manager, secretary or other officer of the company duly authorised in that behalf, who shall certify that he is so authorised.

Rule 67. Form of proxies.—A creditor or contributory may give a general proxy or a special proxy to any person, and a general proxy shall be in Form WIN 35 and a special proxy in Form WIN 36.

Rule 68. Proxies to Company Liquidator or chairman of meeting.—A creditor or contributory in a winding up by the Tribunal may appoint the Company Liquidator or if there is no such liquidator, the chairman of the meeting, to act as his general or special proxy.

Rule 69. Use of proxies by deputy.—Where a Company Liquidator who holds any proxies cannot attend the meeting for which they are given, he may in writing depute some person under his official control to use the proxies on his behalf and in such manner as he may direct.

Rule 70. Forms to be sent with notice.—Forms of proxies shall be sent to the creditors and contributories with the notice summoning the meeting and no name shall be inserted or printed in the form before it is sent.

Rule 71. Proxies to be lodged.—A proxy shall be lodged not later than 48 hours before the meeting at which it is to be used, with the Company Liquidator in a winding up by the Tribunal.

Rule 72. Holder of proxy not to vote on matter in which he is financially interested.—No person acting either under a general or special proxy, shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer in a position to receive any remuneration out of the assets of the company otherwise than as a creditor ratably with the other creditors of the company.

Rule 73. Minor not to be appointed proxy.—No person shall be appointed as a general or special proxy who is a minor.

Rule 74. Filling in proxy where creditor or contributory is blind or incapable.—The proxy of a creditor or a contributory who is blind or incapable of writing may be accepted if such creditor or contributory has attached his signature or mark thereto in the presence of a witness who shall add to his signature his description and address:

Provided that all insertions in the proxy shall be in the handwriting of the witness and such witness shall have certified at the foot of the proxy that all such insertions have been made by him at the request and in the presence of the creditor or contributory before he attached his signature or mark.

Rule 75. Proxy of person not acquainted with English.—The proxy of a creditor or contributory who does not know English may be accepted if it is executed in the manner provided in rule 74 and the witness certifies that it was explained to the creditor or contributory in the language known to him, and gives the creditor’s or contributory’s name in English below the signature.

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