The Appointment
The official liquidator is appointed by the Central Government and attached to the NCLT. On a winding-up order, the official liquidator becomes the liquidator of the company unless the NCLT appoints a different liquidator. The official liquidator acts under the supervision of the NCLT and is subject to the Tribunal’s directions.
The Powers
The liquidator’s powers include: taking possession of the company’s assets; instituting and defending legal proceedings on behalf of the company; selling the company’s property; investigating the company’s affairs; summoning officers and employees for examination; and reporting to the NCLT on the company’s affairs. The liquidator may also apply to the NCLT for directions on any matter.
The Investigative Role
The liquidator must investigate the company’s affairs and report on the causes of the winding up. The report may lead to a public examination of officers under Section 300, to prosecution, or to misfeasance proceedings under Section 340. The liquidator’s investigation is not limited to the company’s books; it may extend to the conduct of directors and promoters.
The Supervision
The liquidator’s exercise of powers is subject to the NCLT’s supervision. A creditor or contributory may apply to the NCLT challenging the liquidator’s action or seeking directions. The liquidator’s remuneration is fixed by the NCLT.
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