Section 361: Summary procedure for liquidation
This section is for outlining a summary procedure for liquidating certain companies with assets not exceeding one crore rupees.
The section, clause by clause
What the section says
In plain terms
(1)Where the company to be wound up under this Chapter, —
The Central Government can order a company to be wound up using a summary procedure if the company has assets worth no more than one crore rupees and belongs to a prescribed class of companies.
(1)(i)has assets of book value not exceeding one crore rupees; and
(1)(ii)belongs to such class or classes of companies as may be prescribed, the Central Government may order it to be wound up by summary procedure provided under this Part.
(2)Where an order under sub-section (1) is made, the Central Government shall appoint the Official Liquidator as the liquidator of the company.
When the Central Government orders a summary procedure, it must appoint the Official Liquidator as the company's liquidator.
(3)The Official Liquidator shall forthwith take into his custody or control all assets, effects and actionable claims to which the company is or appears to be entitled.
The Official Liquidator must immediately take control of all the company's assets and claims.
(4)The Official Liquidator shall, within thirty days of his appointment, submit a report to the Central Government in such manner and form, as may be prescribed, including a report whether in his opinion, any fraud has been committed in promotion, formation or management of the affairs of the company or not.
The Official Liquidator has 30 days to submit a report to the Central Government, including whether they think any fraud was involved in the company's promotion, formation, or management.
(5)On receipt of the report under sub-section (4), if the Central Government is satisfied that any fraud has been committed by the promoters, directors or any other officer of the company, it may direct further investigation into the affairs of the company and that a report shall be submitted within such time as may be specified.
If the Central Government thinks fraud was committed, it can order a further investigation and require a report within a specified time.
(6)After considering the investigation report under sub-section (5), the Central Government may order that winding up may be proceeded under Part I of this Chapter or under the provision of this Part.
After reviewing the investigation report, the Central Government can decide whether to proceed with winding up the company under a different part of the law.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.