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Sections 343 and 344 of Companies Act 2013: Company Liquidator Powers and Statement of Liquidation

Sections 343 and 344 of the Companies Act, 2013 deal with important requirements during winding up. Section 343 regulates specified powers of a Company Liquidator and the sanction of the National Company Law Tribunal, while Section 344 requires specified company documents to state that the company is being wound up.

Law text reviewed against the current India Code text available in September 2026.

At a glance: Section 343 permits the Company Liquidator, subject to the statutory requirements, to pay a class of creditors in full and to enter into specified compromises or arrangements. Section 344 requires invoices, orders for goods and business letters bearing the company name to disclose that the company is being wound up and prescribes a monetary penalty for wilful non-compliance.
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Section 343 - Company Liquidator to exercise certain powers subject to sanction

Meaning: Section 343 identifies specified powers that a Company Liquidator may exercise in a winding up by the Tribunal. The provision principally concerns payment of a class of creditors in full and compromises or arrangements concerning claims, calls, debts and liabilities. It also preserves a mechanism for a creditor or contributory to approach the Tribunal regarding the exercise or proposed exercise of these powers.

Section 343(1)

The Company Liquidator may, with the sanction of the Tribunal, when the company is being wound up by the Tribunal:

(i) pay any class of creditors in full;

(ii) make any compromise or arrangement with creditors or persons claiming to be creditors, including persons having or alleging a present or future, certain or contingent claim against the company, or a claim by which the company may be rendered liable; or

(iii) compromise any call or liability to call, debt, liability capable of resulting in a debt, or any present or future, certain or contingent claim, including claims sounding only in damages, between the company and a contributory, alleged contributory, debtor or other person apprehending liability to the company. The power extends to questions relating to or affecting the assets, liabilities or winding up of the company and includes taking security and giving a complete discharge in respect of the relevant call, debt, liability or claim.

Section 343(2)

Notwithstanding sub-section (1), in a winding up by the Tribunal, the Central Government may make rules permitting the Company Liquidator, in prescribed circumstances and subject to prescribed conditions, restrictions and limitations, to exercise the specified compromise powers without the sanction of the Tribunal.

Section 343(3)

A creditor or contributory may apply in the prescribed manner to the Tribunal concerning an exercise or proposed exercise of powers by the Company Liquidator under Section 343. After giving a reasonable opportunity to the applicant and the Company Liquidator, the Tribunal may pass such order as it thinks fit.

Legislative note: Sub-section (1) of Section 343 was substituted through Section 255 and the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016, with effect from 15 November 2016, as recorded in the current official Companies Act text.

Section 344 - Statement that company is in liquidation

Meaning: Section 344 is a disclosure provision. When a company is being wound up, specified business documents on which the company name appears must make it clear that the company is being wound up.

Section 344(1)

Where a company is being wound up, whether by the Tribunal or voluntarily, every invoice, order for goods or business letter issued by or on behalf of the company, a Company Liquidator, or a receiver or manager of the property of the company, if the company name appears on that document, must contain a statement that the company is being wound up.

Section 344(2) - Penalty for non-compliance

If sub-section (1) is contravened, the company and every officer of the company, Company Liquidator, receiver or manager who wilfully authorises or permits the non-compliance is punishable with a fine of not less than Rs. 50,000 and up to Rs. 3,00,000.

Meaning and practical effect of Sections 343 and 344

  • Tribunal supervision: Section 343 places the specified liquidation decisions within a framework of Tribunal sanction and statutory safeguards.
  • Compromise powers: The Company Liquidator can deal with creditor claims, calls, debts and related liabilities in the manner permitted by the section.
  • Creditor and contributory protection: Section 343(3) gives creditors and contributories a statutory route to seek Tribunal scrutiny of the exercise or proposed exercise of the liquidator's powers.
  • Public disclosure: Section 344 requires relevant commercial documents to disclose the winding-up status of the company.
  • Penalty: Wilful authorisation or permission of non-compliance with Section 344(1) attracts the monetary fine prescribed by Section 344(2).

Official legal source

For the authoritative statutory text and later amendments, refer to the Companies Act, 2013 on India Code. India Code is the Government of India legislative database.

This article is intended as a plain-language guide to the statutory provisions. For a proceeding or transaction, the current Act, applicable rules, notifications and judicial orders should be checked.