Section 343: Company Liquidator To Exercise Certain Powers Subject To Sanction
Updated: May 9
Liquidator is a person appointed to wind up the affairs of a company or firm.
In other words, a liquidator is a person or entity that liquidates something generally assets. When assets are cash or other equivalents. It generally means assets of a company are sold by the liquidator and the resulting fund are used to pay off the company's debt.
Powers of the Company Liquidator:
The company liquidator shall take into custody of all the property or claims to which he appears to be entitled. The powers of the official liquidator can broadly ne classified into three broad heads as follows:
Powers which the company liquidator can exercise with the sanction of tribunal.
Powers which he can exercise without such sanctions.
Powers which he can exercise with he leave of the tribunal in case of onerous contracts.
Provisions under Section 343 of Companies Act, 2013: Company Liquidator To Exercise Certain Powers Subject To Sanction
The Company Liquidator may, with the sanction of the Tribunal, when the company is being wound up by the Tribunal:-
(a) pay any class of creditors in full;
(b) make any compromise or arrangement with creditors or persons claiming to be creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, against the company, or whereby the company may be rendered liable.
2. Notwithstanding anything contained in sub-section (1), in the case of a winding up by the Tribunal, the Central Government may make rules to provide that the Company Liquidator may, under such circumstances, if any, and subjects to such conditions, restrictions and limitations, if any, as may be prescribed, exercise any of the powers referred to in sub clause (ii) or sub- clause (iii) of clause (b) of sub-section (1) without the sanction of the Tribunal.
3. Any creditor or contributory may apply in the manner prescribed to the Tribunal with respect to any exercise or proposal exercise of powers by the Company Liquidator under this section, and the Tribunal shall after giving a reasonable opportunity to such applicant and the Company Liquidator, pass such orders as it may think fit.
Powers exercisable with the sanctions of the Tribunal by the Company Liquidator are as follows:
To institute or defend any suit, prosecution or other legal proceeding in the name on behalf of the company.
To tell the immovable or movable property and actionable claims of the company by public auction or private contract.
To raise on the security of the assets of the company any money requisite.
To do all such things as may be necessary for winding up the affairs of the company and distributing its assets.
To appoint an advocate, attorney or pleader to assist him in performance of his duties.