{"id":5888,"date":"2020-04-01T16:31:52","date_gmt":"2020-04-01T11:01:52","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5888"},"modified":"2022-12-01T10:52:30","modified_gmt":"2022-12-01T05:22:30","slug":"offences-by-officers-of-companies-in-liquidation","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/","title":{"rendered":"Offences by Officers of Companies in Liquidation: A Complete Checklist"},"content":{"rendered":"\n<p class=\"has-drop-cap\"><strong><em>Under\nCompanies Act, 2013, Companies go for Liquidation, when the business of Company\ncomes to an end, and the assets of the Company are distributed among the\npersons having a claim over the Company. <\/em><\/strong>In Liquidation, the property of the Company is administered for the\nbenefit of creditors and members of the Company. Certain Officers are appointed\nby the Company Liquidator to manage and administer the Liquidation process of the\nCompanies. <\/p>\n\n\n\n<p>The\nOfficers of Companies in Liquidation are entitled to provide true facts and information\nto the Company Liquidator or to any other authorities about the Company. <strong><em>The\nOfficers if does not follow the prescribed rules, and Offences by Officers of\nCompanies in Liquidation are committed, then the Officers are entitled to\nPunishment under Section 336 of the Companies Act, 2013.<\/em><\/strong> In this\narticle, we will discuss the different Offences by Officers of Companies in\nLiquidation.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/#What_is_Liquidation\" >What is Liquidation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/#What_are_the_different_Offences_by_Officers_of_Companies_in_Liquidation\" >What are the different Offences by Officers of\nCompanies in Liquidation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/#What_is_the_Punishment_for_the_Offences_by_Officers_of_Companies_in_Liquidation\" >What is the Punishment for the Offences by Officers of\nCompanies in Liquidation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/#What_is_the_Punishment_to_the_person_who_receives_the_property_of_the_Company\" >What is the Punishment to the person who receives the\nproperty of the Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/offences-by-officers-of-companies-in-liquidation\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Liquidation\"><\/span>What is Liquidation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Liquidation is defined as a process of bringing the business of the Company to an end. The assets of the Company in Liquidation are distributed among the person having a claim on the Company. When a Company has no realistic prospect of a going concern or the Company is insolvent then as a consequence Liquidation occurs in the Company. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"621\" height=\"447\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image.png\" alt=\"Types of Liquidation\" class=\"wp-image-5889\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image.png 621w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-300x216.png 300w\" sizes=\"(max-width: 621px) 100vw, 621px\" \/><\/figure>\n\n\n\n<p><strong><em>The\nLiquidation can be of two types: Compulsory or Voluntary.<\/em><\/strong> <strong><em>The Compulsory Liquidation occurs when the\nCompany is unable to pay the dues.<\/em><\/strong> The Compulsory Liquidation is\ngenerally forced by the creditors of the Company. <strong><em>Voluntary Liquidation\noccurs when the Company has no realistic prospects to remain going concerned.<\/em><\/strong>\nThe entity itself forces the Voluntary Liquidation through its Board of Directors.\n<\/p>\n\n\n\n<p>For\nthe process of Liquidation to be speedy and efficient, a Company Liquidator is\nappointed. The Company Liquidator appoints certain Officers under him to\nadminister and complete the process of Liquidation in the Company. <\/p>\n\n\n\n<p>The appointed Officers of Company in Liquidation, should not do any act to conceal and falsify the true facts and information related to the Company and no Offences by Officers of Companies in Liquidation should be committed by them as well. The Offences by Officers of Companies in Liquidation are punishable under the <strong>Companies Act, 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup><strong><em>.<\/em><\/strong><em><strong> Section 336 of the Companies Act, 2013<\/strong>,<\/em> provides for the Offences by Officers of Companies in Liquidation. The provisions for punishments for the Offences by Officers of Companies in Liquidation is also provided under <strong><em>Section 336 of the Companies Act, 2013.\u00a0 \u00a0<\/em><\/strong>\u00a0\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_different_Offences_by_Officers_of_Companies_in_Liquidation\"><\/span>What are the different Offences by Officers of\nCompanies in Liquidation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Company when goes for Liquidation either Voluntarily or by Tribunal or is subsequently ordered by Tribunal to be wound up or passes a resolution for wound up, the Offences by Officers of Companies in Liquidation are punishable under the Companies Act, 2013. <strong><em>The Offences by Officers of Companies in Liquidation are provided under Section 336 of the Companies Act, 2013. The different Offences by Officers of Companies in Liquidation are as follows:<\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"694\" height=\"528\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-1.png\" alt=\"different Offences by Officers of Companies in Liquidation\" class=\"wp-image-5890\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-1.png 694w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-1-300x228.png 300w\" sizes=\"(max-width: 694px) 100vw, 694px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Non-Disclosure of Property of Company<\/h3>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation, <strong><em>in his best belief and knowledge, does not truly\nand fully do the disclosure of the property<\/em><\/strong>, movable or immovable, of\nthe Company, to the Company Liquidator.<\/li><li>The Officer of\nCompany in Liquidation does not disclose how and to whom Company disclosed\nproperty of Company, and for what consideration property was disposed of to\nperson. The Officer is also entitled to disclose that when the property of the\nCompany was disposed of. The property of Company does not include that property\nwhich was disposed of in the ordinary course of business of Company.&nbsp; <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">No Delivery of Property of Company<\/h3>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation does not deliver the property of the Company to the Company\nLiquidator. <strong><em>The property includes such property which was in custody and\ncontrol of Officer, and the Officer is required to deliver the property by<\/em><\/strong>\n<strong><em>law.<\/em><\/strong> Sometimes, the Company Liquidator can also direct the\nCompany Liquidator to deliver the property to him.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">No Delivery of Books and Papers of Company<\/h3>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation does not deliver the books and papers of the Company to\nthe Company Liquidator. <strong><em>The books and papers of the Company should be\ncustody and control of the Officer and which the law requires the Officer to\ndeliver it to the Company Liquidator.<\/em><\/strong> The Company Liquidator can also\ndirect the Officer to deliver the books and papers to him. &nbsp;<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Concealment and Falsification of Property or Affairs of\nCompany &nbsp;<\/h3>\n\n\n\n<p><strong><em>The\nOfficer of Company in Liquidation, within 12 months immediately before the\ncommencement of the winding-up or any time after that:<\/em><\/strong><\/p>\n\n\n\n<ul><li><strong><em>Do\nconcealment<\/em><\/strong> of any part of\nthe property of Company to the value of <strong><em>1000 Rupees or more,<\/em><\/strong><\/li><li><strong><em>Do\nconcealment<\/em><\/strong> of any debt due\nfrom or to the Company,<\/li><li><strong><em>Do\nfraudulent<\/em><\/strong> removal of any\npart of the property of the Company of the value of <strong><em>1000 Rupees or more<\/em><\/strong>,<\/li><li><strong><em>Do\ndestruction, concealment, falsification or mutilation<\/em><\/strong> of any books or papers of the property of the\nCompany. The books and papers should be related to the property or affairs of\nthe Company and should affect the property or affairs of the Company. <\/li><li><strong><em>Do\nconcealment, falsification, mutilation and destruction<\/em><\/strong> as a privy of any books or papers of the property of\nthe Company. The books and papers should be related to the property or affairs\nof the Company and should affect the property and affairs of the Company.<\/li><li><strong><em>Do\nalteration or makes any omission, or fraudulently parts with<\/em><\/strong>, any books and papers of the Company. The books and\npapers should be related to the property and affairs of the Company and should\naffect the property and affairs of the Company. <\/li><li><strong><em>Do\nalteration, omissions, or fraudulently parts with<\/em><\/strong> as privy to any books and papers of the Company. The\nbooks and papers should be related to the property and affairs of the Company\nand should affect the property and affairs of the Company.<\/li><li><strong><em>Obtains or\ncredits <\/em><\/strong>any property on\nor on behalf of the Company by false representation or by other fraud. The\nproperty obtained or credited by the Officer is not for Company, and the\nCompany does not pay for the property.<\/li><li><strong><em>Obtains or\ncredits <\/em><\/strong>any property for\nor on behalf of Company by falsely pretending that Company is carrying on\nbusiness. The Company does not pay for the property.<\/li><li><strong><em>Do\npledging, pawning or disposition <\/em><\/strong>of\nany property of Company which is obtained on credit and has not been paid for\nby Company. If the pledging, pawning or disposition id sone in the ordinary\ncourse of business of the Company, then it is considered as an offence.&nbsp; <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Material Omission in Statements of Company<\/h3>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation, <strong><em>do any material omission<\/em><\/strong> <strong><em>in the\nstatements<\/em><\/strong> of the Company. The statements in which the omission is made\nshould be related to the affairs of the Company.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">False Debt not Informed of Company<\/h3>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation does not inform the Company Liquidator of <strong><em>any\nFalse debt proved<\/em><\/strong> by a person under winding up of the Company. The\nOfficer knowingly and believingly of the False Debt does not inform the Company\nLiquidator for the 1-month period.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Prevents Production of Books, Papers and Accounts of\nCompany<\/h3>\n\n\n\n<ul><li>After\ncommencement of winding up of Company, Officer of Company in Liquidation <strong><em>prevents\nthe production<\/em><\/strong> of any books and papers of Company. The books and papers\nshould be related to the property and affairs of the Company and should affect\nthe property and affairs of the Company. <\/li><li>After\ncommencement of winding up of Company, or in any meeting of creditors, Officer\nof Company in Liquidation <strong><em>attempts to account for part of property with\nfictitious loses or expenses.<\/em><\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">False Representation or Fraud to Creditors of Company<\/h3>\n\n\n\n<ul><li><strong><em>To obtain any consent of creditors of Company<\/em><\/strong>, the Officer of Company in Liquidation does <strong><em>false representation or fraud to an agreement.<\/em><\/strong> The agreement should be related to the affairs of the Company or the winding-up of the Company.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/winding-up-of-a-company-by-tribunal\/\">Commencement of Winding Up of a Company by Tribunal under Companies Act 2013<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Punishment_for_the_Offences_by_Officers_of_Companies_in_Liquidation\"><\/span>What is the Punishment for the Offences by Officers of\nCompanies in Liquidation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Under the Companies Act 2013, the Punishment for the Offences by Officers of Companies in Liquidation is provided under Section 336 of the Act. The Punishment for the Offences by Officers of Companies in Liquidation is as follows:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"576\" height=\"336\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-2.png\" alt=\"Punishment for the Offences by Officers of Companies in Liquidation\" class=\"wp-image-5892\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-2.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-2-300x175.png 300w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<ul><li>The Officer of\nCompany in Liquidation shall be punished with imprisonment which should not be\nless than <strong><em>3 years and which can be extended to 5 years<\/em><\/strong>, and<\/li><\/ul>\n\n\n\n<ul><li> The Officer of Company in Liquidation shall be punished with a fine which should be less than <strong><em>1 lakh Rupees and which can be extended 3 lakh Rupees.<\/em><\/strong><\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> The accused Officer of Company in Liquidation if proves that\nhe\/she had no intent to defraud or conceal the true affairs of the Company or to defeat the law, will result into a good defence for him\/her.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Punishment_to_the_person_who_receives_the_property_of_the_Company\"><\/span>What is the Punishment to the person who receives the\nproperty of the Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>&nbsp;<strong><em>Under the Companies Act, 2013, if any\nperson who receives any property which is pawned, pledged or disposed of by the\nofficers of Companies which amount to an offence, then such person should be\ngiven Punishment according to the rules prescribed under the Section 336(2) of\nthe Act. The Punishment to the person receiving property from the Officers of\nCompanies who committed an offence is as follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The person\nshould be punished with imprisonment which should not be less than <strong><em>3 years\nand can be extended to 5 years, and<\/em><\/strong><\/li><li>The person\nshould be punished with a fine should not be <strong><em>3 lakh Rupees and can be\nextended to 5 lakh Rupees. &nbsp;&nbsp;&nbsp;<\/em><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Companies Act, 2013, provides for the Liquidation of Company in case the Company fails to carry on its business.<\/em><\/strong> The Company Liquidator appoint certain officers for the completion of the process of Liquidation of the Company. The Officers of Companies in Liquidation should abide by the directions of the Company Liquidator and should work according to the prescribed rules. If the Officers of Companies in Liquidation does not follow the prescribed rules and commit an offence will be punished under the Companies Act, 2013. <strong><em>The Offences by Officers of Companies in Liquidation are mentioned under Section 336 of the Companies Act, 2013.<\/em><\/strong> The Punishment for Offences by Officers of Companies in Liquidation is provided under <strong><em>Section 336 of Companies Act, 2013<\/em><\/strong>, and the Officers are strictly punishable for any offence they commit. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/powers-and-duties-of-company-liquidator-in-voluntary-winding-up\/\">\nPowers and Duties of Liquidator in Voluntary Winding Up A Complete Checklist\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under Companies Act, 2013, Companies go for Liquidation, when the business of Company comes to an end, and the assets of the Company are distributed among the persons having a claim over the Company. In Liquidation, the property of the Company is administered for the benefit of creditors and members of the Company. Certain Officers [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":5894,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[385],"tags":[447],"acf":{"service_id":"70"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":8199,"readingTime":6,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5888"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5888"}],"version-history":[{"count":18,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5888\/revisions"}],"predecessor-version":[{"id":51054,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5888\/revisions\/51054"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/5894"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}