Power of Liquidator under Insolvency and Bankruptcy Code

Introduction

Insolvency Resolution Process have two outcome. 

1. Resolution Plan
2. No Resolution Plan

In case parties involved in resolution proceedings not arrive at agreeable resolution plan, companies asset will be liquidated and realized amount will be distributed.

This whole liquidation process is covered under section 33 to 54.

The person who carries this process is liquidator. He could be Resolution Professional who was involved in earlier insolvency resolution proceedings or other person who is appointed under Section 34.

This person is conferred with great deal of power. Those powers are enumerated in Section 35 of the IBC.

Powers of Liquidator under section 35

1. to verify claims of all the creditors and consolidate them.
2. to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor
3. to evaluate the assets and property of the corporate debtor in the manner and prepare a report;
4. to take such measures to protect and preserve the assets and properties of the corporate debtor;
5. to carry on the business of the corporate debtor for its beneficial liquidation;
6. to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels, though transfer are subjected to section 52 and further the liquidator shall not sell the immovable and movable property or actionable claims to any person who is not eligible to be a resolution applicant.
7. to draw, accept, make and endorse any negotiable instruments on behalf of the corporate debtor, with the same effect as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business;
8. to take out, in his official name, letter of administration to any deceased contributory and to do in his official name any other act necessary for obtaining payment of any money due and payable from a contributory or his estate which cannot be ordinarily done in the name of  the corporate debtor, and in all such cases, the money due and payable shall, for the purpose of enabling the liquidator to take out the letter of administration or recover the money, be deemed to be due to the liquidator himself;
9. to obtain any professional assistance, in the discharge of his duties, obligations and responsibilities;
10. to invite and settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this Code;
11. to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of on behalf of the corporate debtor;
12. to investigate the financial affairs of the corporate debtor to determine undervalued or preferential transactions;
13. to take all such actions, steps, or to sign, execute and verify any paper, deed, receipt document, application, petition, affidavit, bond or instrument and for such purpose to use the common seal, if any, as may be necessary for liquidation, distribution of assets and in discharge of his duties and obligations and functions as liquidator;
14. to apply to the Adjudicating Authority for such orders or directions as may be necessary and to report the progress of the liquidation process in a manner as may be specified by the Board; and
15. to perform such other functions as may be specified by the Board.

 Generally, power of Boards and other high ranking official of companies will be transferred to Liquidator.

Conclusion.

Once the liquidation of company begins as per Insolvency and Bankruptcy code, liquidator will acquire tons of power to discharge his duties. The foremost duty of liquidator is to get maximum amount by selling the asset and make creditors happy.

Legalfundaa 

IBC Bare Act without Rules/Notification