Information as to Pending Liquidations: S. 348

Information as to pending liquidations is the statutory answer to a liquidation that does not end. Section 348 of the Companies Act, 2013 requires the Company Liquidator to file an audited statement with the Tribunal once a winding up passes its first year, to keep filing at least yearly after that, and to copy the Registrar each time. This page reads the section as printed, including a cross reference the 2016 substitution left pointing at nothing.

What is information as to pending liquidations, and when is it due?

A filing triggered by elapsed time. Section 348(1), as substituted, requires that If the winding up of a company is not concluded within one year after its commencement, the Company Liquidator shall, unless exempted wholly or in part by the Central Government, file within two months of the expiry of such year and thereafter until the winding up is concluded, at intervals of not more than one year or at such shorter intervals, if any, as may be prescribed, a statement with respect to the proceedings in, and position of, the liquidation, with the Tribunal.

This is not the liquidator's first report. Where the Tribunal has made a winding up order or appointed a Company Liquidator, section 281(1) requires a report to the Tribunal within sixty days from the order, covered in the Company Liquidator's report. Section 348 is the recurring filing that follows when the liquidation outlives its first year.

Four clocks are in that sentence. The trigger is one year from commencement. The first filing is due within two months of that year expiring. The recurring interval is not more than one year. And the prescribed interval may be shorter, never longer.

The statement's form and contents are left to rules: it is filed in such form containing such particulars as may be prescribed. What the section does fix is the audit.

Who audits the statement, and when is audit excused?

A person qualified to audit the company, unless section 294 applies. Section 348(1) requires the statement to be duly audited, by a person qualified to act as auditor of the company, and its proviso states: Provided that no such audit as is referred to in this sub-section shall be necessary where the provisions of section 294 apply.

That is the only audit carve out in this group of sections. It matters because the audit, not the filing, is the expensive half of the obligation for a small estate.

Who receives the statement?

The Tribunal, the Registrar, and in one case a Government. Section 348(2) states that When the statement is filed with the Tribunal under clause (a) of sub-section (1), a copy shall simultaneously be filed with the Registrar and shall be kept by him along with the other records of the company.

Note the cross reference. Sub-section (2) points at clause (a) of sub-section (1), but sub-section (1), as substituted by Act 31 of 2016, section 255 and the Eleventh Schedule with effect from 15 November 2016, has no clauses: it is a single continuous sub-section with a proviso. The pointer survived the substitution of the thing it pointed at, the same pattern that leaves the panel reference in section 275(1) aimed at a sub-section that maintains no panel.

Section 348(3) adds the Government limb for a Government company in liquidation, and it splits three ways: a copy goes (a) to the Central Government, if that Government is a member of the Government company; (b) to any State Government, if that Government is a member of the Government company; or (c) to the Central Government and any State Government, if both the Governments are members of the Government company.

Who can read it, and what happens to a false claim?

Any creditor or contributory, on a fee. Section 348(4) entitles Any person stating himself in writing to be a creditor or contributory of the company, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement and to receive a copy or an extract.

The statement of status is what unlocks it, which is why sub-section (5) polices that statement rather than the inspection. A person fraudulently stating himself to be a creditor or contributory under sub-section (4) is deemed to be guilty of an offence under section 182 of the Indian Penal Code (45 of 1860), and is punishable on the application of the Company Liquidator. The liquidator is the named applicant, so the enforcement route runs through the office the statement came from.

This is a wider access right than the one in section 346, which admits creditors and contributories to the company's own books only in accordance with prescribed rules, covered in inspecting company books in a winding up.

What did 2020 change in section 348?

Sub-section (6) was replaced and sub-section (7) was removed. The consolidation prints sub-section (6) in square brackets, recording that it was Subs. by Act 29 of 2020, s. 50, for sub-section (6) (w.e.f. 21-12-2020), and prints a row of asterisks where sub-section (7) stood, recording that it was Sub-section (7) omitted by Act 29 of 2020, s. 50 (w.e.f. 21-12-2020).

Substituted sub-section (6) redirects the default. Where a Company Liquidator who is an insolvency professional registered under the Insolvency and Bankrupt Code, 2016 (31 of 2016) is in default in complying with this section, that default shall be deemed to be a contravention of the provisions of the said Code, and the rules and regulations made thereunder for the purpose of proceedings under chapter VI of Part IV of that Code. The Code is printed as Insolvency and Bankrupt Code, 2016 in the India Code consolidation read for this page, without the "cy" the Code's own short title carries, and it is quoted here as printed.

So a defaulting liquidator who is an insolvency professional is answerable under the Code rather than under the Companies Act penalty that section 348 would otherwise carry. That is the same appointee pool section 275(2) draws from, and the sums the same office must keep moving are governed by the duty to deposit monies into a scheduled bank. Information as to pending liquidations is the filing that makes a slow winding up visible to everyone entitled to look.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.