Section 347 Companies Act: Disposal of books and papers of company

Section 347 of Companies Act: Corporate Governance & Statutory Compliance

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

1. When the affairs of a company have been completely wound up and it is about to be dissolved, its books and papers and those of the Company Liquidator may be disposed of as follows:—

a. in the case of winding up by the Tribunal, in such manner as the Tribunal directs; and

b. in the case of voluntary winding up, in such manner as the company by special resolution with the prior approval of the creditors direct.

2. After the expiry of five years from the dissolution of the company, no responsibility shall devolve on the company, the Company Liquidator, or any person to whom the custody of the books and papers has been entrusted, by reason of any book or paper not being forthcoming to any person claiming to be interested therein.

3. The Central Government may, by rules,

a. prevent for such period as it thinks proper the destruction of the books and papers of a company which has been wound up and of its Company Liquidator; and

b. enable any creditor or contributory of the company to make representations to the Central Government in respect of the matters specified in clause (a ) and to appeal to the Tribunal from any order which may be made by the Central Government in the matter.

4. If any person acts in contravention of any rule framed or an order made under sub-section (3 ), he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees, or with both.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 347

Section 347 of the Companies Act, 2013 governs the disposal of books and papers of a company upon complete winding up and dissolution, granting absolute statutory immunity to the company and liquidator against missing records after five years.

Disposal Mechanism: In winding up by the Tribunal, records are disposed of as directed by the Tribunal; in voluntary winding up, according to a special resolution with prior creditor sanction.
Five-Year Statutory Immunity Bar: After five years from the date of dissolution, no responsibility rests on the company, liquidators, or custodians if any book or paper is missing or cannot be produced.
Central Government Preventive Powers: The Central Government may make rules or issue directions preventing premature record destruction or granting inspection rights upon representation by interested parties.

Key Landmark Precedents:

Re: South Eastern of Portugal Railway Co., (1869) 21 LT 220: Held that directions for record destruction must ensure that books are preserved until all potential claims and accounting queries are conclusively finalized.
Official Liquidator v. B.K. Sengupta, (1975) 45 Comp Cas 175 (Cal): Affirmed that the statutory five-year protection shields the Official Liquidator from post-dissolution summonses and damages claims regarding untraceable company records.
V.K. Ranganathan v. Official Liquidator, (2002) 109 Comp Cas 842 (Mad): Held that after the statutory period post-dissolution, neither the liquidator nor storage custodians can be held in contempt or negligence for non-production of company archives.

Courtroom Practice & Strategic Litigation Guidance:

When concluding a liquidation, include a specific prayer in the final dissolution application under Section 302/347 requesting directions for physical shredding or digital archiving of company books. Ensure all tax and regulatory appeals have abated before executing destruction, maintaining a certified destruction inventory.

Section 347: Disposal of books and papers of company

Section 347 of Companies Act: Corporate Governance & Statutory Compliance

Legal Commentary & Landmark Judgments: Section 347