Sections 361 and 362 of Companies Act 2013: Summary Procedure for Liquidation, Sale of Assets and Recovery of Debts

Sections 361 and 362 of the Companies Act, 2013 form part of the statutory framework for a summary procedure for liquidation. Section 361 sets out when the Central Government may order summary liquidation and the principal duties of the Official Liquidator. Section 362 deals with expeditious disposal of assets and recovery of money due to the company.

Section 361 - Summary procedure for liquidation

Section 361 provides a simplified statutory route for winding up certain eligible companies under Chapter XX of the Companies Act, 2013. The procedure is administered through the Central Government and the Official Liquidator, subject to the conditions in the Act and the applicable winding-up rules.

Eligibility under Section 361(1)

For the Central Government to order winding up by the summary procedure, the company must satisfy the statutory conditions in Section 361(1):

• the book value of its assets must not exceed Rs. 1 crore; and
• it must belong to a class or classes of companies prescribed for this purpose.

Prescribed classes under Rule 190

Rule 190(2) of the Companies (Winding Up) Rules, 2020 prescribes the relevant classes on the basis of the latest audited balance sheet. In addition to the Section 361 asset-value condition, the company must fall within the prescribed framework.

Appointment and functions of Official Liquidator

Where the Central Government makes an order under Section 361(1), Section 361(2) requires appointment of the Official Liquidator as liquidator of the company. Under Section 361(3), the Official Liquidator must promptly take custody or control of the assets, effects and actionable claims to which the company is, or appears to be, entitled.

Report within 30 days and fraud inquiry

Under Section 361(4), the Official Liquidator must submit a report to the Central Government within 30 days of appointment, in the prescribed manner and form. The report includes the Official Liquidator's opinion on whether fraud has been committed in the promotion, formation or management of the company's affairs.

If the Central Government is satisfied on receiving the report that fraud has been committed by promoters, directors or another officer, Section 361(5) permits it to direct further investigation. After considering that investigation report, Section 361(6) permits the Central Government to direct whether winding up should proceed under Part I of Chapter XX or under the summary procedure.

Section 362 - Sale of assets and recovery of debts due to company

Section 362 governs the realisation of the company's assets and recovery of amounts payable to it during the summary liquidation process.

Disposal of assets within 60 days

Section 362(1) requires the Official Liquidator to expeditiously dispose of all movable and immovable assets within 60 days of appointment. Rule 190(5) further links asset disposal to the procedure in Rules 165 to 167 of the Companies (Winding Up) Rules, 2020, with the modifications applicable to summary liquidation.

Notice to debtors and contributories

Under Section 362(2), within 30 days of appointment the Official Liquidator must serve notice on debtors of the company or contributories, as applicable, requiring them to deposit the amount payable to the company within 30 days.

Failure to deposit amount

If a debtor does not deposit the amount demanded under Section 362(2), Section 362(3) allows the Official Liquidator to apply to the Central Government, which may pass such orders as it thinks fit.

Deposit of money recovered

Section 362(4) requires money recovered by the Official Liquidator under the section to be deposited in accordance with Section 349. Rule 190(6) provides that the money referred to in Section 349 is to be paid into the public account of India in the Reserve Bank of India not later than the next working day of the Bank.

Practical sequence under Sections 361 and 362

In broad terms, the statutory sequence is: eligibility for summary liquidation; Central Government order; appointment of the Official Liquidator; immediate custody or control of company assets and claims; report within 30 days; further fraud investigation where directed; sale of assets; recovery of debts and contributory amounts; and deposit of recovered money in accordance with Section 349 and the applicable Rules.

Difference between summary liquidation and voluntary liquidation

Sections 361 and 362 concern summary liquidation under the Companies Act, 2013. They should not be confused with voluntary liquidation of a corporate person under Section 59 of the Insolvency and Bankruptcy Code, 2016. The appropriate route depends on the statutory basis and circumstances of the company.

Official legal resources

For the latest consolidated statutory text and regulatory material, refer to the official India Code portal and the Ministry of Corporate Affairs portal. Before relying on the provisions for a transaction or proceeding, check the latest Act, Rules, notifications and applicable orders.

Legal position reviewed: 17 September 2026. This page is a general legal information resource and does not replace advice on the facts of a particular case.