After the failure of the insolvency resolution process or the choice of the Committee of creditors, the liquidation process begins. After the process is initiated, the liquidator takes the reins of the process and begins forging ahead with the liquidation procedure.
What kinds of rights does the liquidator exercise through this procedure? This is going to be the focus of our blog:
Liquidator: Powers and Duties
You should know one thing; the powers that are mentioned in the following are subjective to NCLT. That means that there is a code of conduct behind these powers and duties and the adjudicating authority can strip away some of them or grant some new ones based on the needs of the liquidation process. These powers are as follows
- The liquidator can verify the claims of all the creditors.
- The liquidator has the power to take control of all the assets and properties of the corporate debtor. However, what assets and properties he controls are based upon the needs of liquidation and the preliminary reports.
- He has the right to evaluate the properties and assets of the corporate debtor as directed by the adjudicating authority.
- The liquidator has the rights to protect and preserve the properties and assets in the way that he considers fit.
- The liquidator has the right to sell the properties of the corporate debtor to only the individuals who are eligible to be a resolution applicant.
- A liquidator can accept, draw, and endorse any instrument worth negotiating. These include bills of exchange, hundi, or promissory note on the behalf of the corporate debtor. The way to exercise this proper would be pretty much the same as if the debtor was himself conducting business.
- The liquidator has the right to use his official name to :
- take out a letter of administration to any deceased contributory
- Perform other acts necessary to obtain the payment of any money due or payable from the contributory.
- The liquidator can ask for assistance from any professional or appoint anyone to discharge his obligations, responsibilities, and duties.
- He has a responsibility to invite and settle the claims of the creditors and claimants and distribute the proceeds gathered from selling the assets of the corporate debtor among them.
- To institute or defend any prosecution, suit or any other legal proceedings whether they are civil or criminal, in the name and on the behalf of corporate debtors.
- A liquidator has the responsibility to properly investigate the financial affairs of the corporate debtor to scan for undervalued or preferential transactions.
- The liquidator has to perform the following tasks necessary for the liquidation of assets, distribution of its proceedings and discharging his duties:
- Take all the actions
- Take all the steps
- Execute the steps
- Verify on paper, deed, receipt document, petition, application, affidavit, instrument or bond or instrument or for such purpose to use the common seal.
- The liquidator has to update the adjudicating authority about the liquidation process in a timely way.
These are the powers and responsibilities that a liquidator has to exercise throughout the liquidation process.