Companies Act Section 292

Companies Act Section 292: Exercise and Control

Section 292 of the Companies Act outlines the framework within which the Company Liquidator must exercise and manage their powers during the winding-up process of a company. It emphasizes the need for adherence to directions from creditors, contributories, or advisory bodies and allows room for recourse and redress by affected parties. The provision ensures a transparent, balanced, and participatory approach to liquidation. The section is elaborated as follows:

1. Guiding Directions in Administration and Distribution

In carrying out the duties assigned under the Companies Act, the Company Liquidator is entrusted with the administration of the company’s assets and the fair distribution of those assets among its creditors. However, in the performance of these tasks, the Liquidator is required to consider and comply with any directions issued through resolutions passed by the creditors or contributories during their general meetings. Additionally, the advisory committee, if constituted, may also provide directions that the Liquidator should take into account. These directions are intended to provide guidance and oversight, ensuring that the winding-up process is conducted in a manner that reflects the collective interests of those involved.

2. Resolution Hierarchy in the Event of Conflicting Directions

In the event that there arises a conflict between the directions given by the advisory committee and those provided by the creditors or contributories in a general meeting, a clear hierarchy is established. In such cases, the directions passed by resolution in the general meeting of creditors or contributories will take precedence and shall be considered to override any instructions issued by the advisory committee. This ensures that the majority interest, as expressed in a collective forum, holds primacy over advisory recommendations.

3. Convening of Meetings for Consultation

To facilitate regular consultation and ensure that the stakeholders' views are heard, the Company Liquidator is empowered to call meetings of the creditors or contributories whenever they deem it necessary. These meetings may be held to ascertain the wishes of these stakeholders in matters relating to the winding-up process.

Moreover, the Liquidator is obligated to summon such meetings if directed by a resolution of the creditors or contributories. Additionally, if a written request is received from not less than one-tenth in value of the creditors or contributories, the Liquidator must convene a meeting accordingly. This ensures participatory governance in the liquidation process, giving voice to minority interests when sufficient concern is demonstrated.

4. Redress Against Actions or Decisions of the Company Liquidator

In case any creditor, contributory, or other interested person feels aggrieved by an act or decision of the Company Liquidator, they have the right to seek redress by applying to the Tribunal. Upon reviewing such an application, the Tribunal is empowered to confirm, reverse, or modify the decision or action under challenge. Furthermore, the Tribunal may issue any additional order that it considers just and equitable under the circumstances. This safeguard ensures that the Liquidator remains accountable and that affected parties have access to a fair adjudication process.