Sections 347 and 348 of the Companies Act, 2013: Disposal of Books and Papers and Pending Liquidations
Sections 347 and 348 form part of the winding-up provisions of the Companies Act, 2013. Section 347 deals with the disposal and preservation of the books and papers of a company after its affairs have been completely wound up. Section 348 requires continuing information about a liquidation that remains pending beyond one year.
Section 347 - Disposal of books and papers of company
Meaning: Section 347 regulates what may happen to the company's books and papers, and those of the Company Liquidator, once the company's affairs have been completely wound up and the company is about to be dissolved. It also addresses responsibility for records after five years and empowers the Central Government to make preservation rules.
Sub-section (1): When the affairs of a company have been completely wound up and it is about to be dissolved, the books and papers of the company and those of the Company Liquidator may be disposed of in the manner directed by the Tribunal.
Sub-section (2): After five years from dissolution, responsibility does not devolve on the company, the Company Liquidator or the person entrusted with custody merely because a book or paper is not forthcoming to a person claiming an interest in it.
Sub-section (3): The Central Government may make rules preventing destruction of the books and papers for an appropriate period, permitting representations by creditors or contributories, and providing an appeal to the Tribunal against a Central Government order on the matter.
Sub-section (4): Contravention of a rule or order under sub-section (3) is punishable with fine which may extend to Rs. 50,000.
Important amendments affecting Section 347
Section 347(1) was substituted with effect from 15 November 2016 following the Insolvency and Bankruptcy Code, 2016 changes to the Companies Act winding-up framework. The Companies (Amendment) Act, 2020 subsequently omitted the imprisonment component from sub-section (4), with effect from 21 December 2020.
Section 348 - Information as to pending liquidations
Meaning: Section 348 creates a reporting and transparency mechanism where winding up is not concluded within one year. It requires periodic information concerning the proceedings and position of the liquidation and provides access to that information for creditors and contributories.
Sub-section (1): If winding up is not concluded within one year after commencement, the Company Liquidator, unless wholly or partly exempted by the Central Government, must within two months after that year and thereafter at intervals of not more than one year, or any shorter prescribed interval, file with the Tribunal the prescribed audited statement concerning the proceedings in and position of the liquidation. The statutory proviso dispenses with that audit where Section 294 applies.
Sub-section (2): A copy of the statement filed with the Tribunal must simultaneously be filed with the Registrar and kept with the company's other records.
Sub-section (3): For a Government company in liquidation, the Company Liquidator must also forward the statement to the Central Government, the relevant State Government, or both, depending on their membership in the company.
Sub-section (4): A person stating in writing that he is a creditor or contributory may, at reasonable times and on payment of the prescribed fee, inspect the statement and obtain a copy or extract.
Sub-section (5): The Act contains a penal consequence for a person who fraudulently represents himself as a creditor or contributory for this purpose.
Sub-section (6): Where a Company Liquidator who is an insolvency professional registered under the Insolvency and Bankruptcy Code, 2016 defaults in complying with Section 348, the default is deemed to be a contravention of that Code and the rules and regulations made under it for proceedings under Chapter VI of Part IV.
Important amendments affecting Section 348
Sub-section (1) was substituted as part of the changes brought into force on 15 November 2016. Section 348(6) was substituted by the Companies (Amendment) Act, 2020 with effect from 21 December 2020, and the former sub-section (7) was omitted from the same date.
Practical distinction between Sections 347 and 348
Section 347 operates at the closing stage of winding up and focuses on the custody, preservation and eventual disposal of books and papers. Section 348 operates while a liquidation remains pending and focuses on periodic reporting, filing, inspection and accountability.
Official legal resources
For the authoritative consolidated statutory text and subsequent amendments, readers should verify the provisions through the official India Code and Ministry of Corporate Affairs resources, particularly where the provision is being relied upon for a filing, proceeding or legal opinion.