Section 292- Exercise and Control of Company Liquidator’s Powers
Updated: Oct 13, 2022
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To understand this Section, let us just understand a few terms and their definitions as per The Companies Act, 2013.
Who is a Contributory?
A contributory is a person who is liable and responsible to contribute to the assets of a company when it is in the winding up stage. A contributory may be a member or shareholder of a company. The use of the word ‘contributory’ arises only during the period of winding up of a company.
According to Section 428 of The Companies Act, 1958, it defines the term ‘contributory’,
“The term" contributory" means every person liable to contribute to the assets of a company in the event of its being wound up, and includes the holder of any shares which are fully paid up; and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.”
Unless the court allocates the list of contributories for settlement, the company liquidator prepares the list of contributories. In case the name of the shareholder falls in the list of contributories then, he becomes liable to pay only such amount which has so far not been called and paid by him on the shares held by them. To save himself from paying the amount, he has to prove that his name has been wrongly included in the list of contributories.
According to Section 292 of The Companies Act, 2013,
(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.
As per the provisions of this Act, the Company Liquidator has to, in the administration of the assets of the company and the distribution which goes around 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.
The directions given by creditors or contributories at any general meeting will be overruled by the directions given by the advisory committee in case of conflict.
The Company Liquidator can summon the meetings of the creditors and contributories in order to ascertain their wishes whenever he thinks fit and also the meetings should be summoned at such times, as the creditors or contributories, 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 whatever case may be.
If any person who is not satisfied with any act or decision by the Company Liquidator can 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 proper and just in the circumstance.