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Section 349: Official Liquidator to make payments into public account of India

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 2013
Section 348 All 470 Sections of Companies Act Section 350
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 349

Section 349 of the Companies Act, 2013 mandates that every Official Liquidator must pay all monies received in their official capacity into the Public Account of India in the Reserve Bank of India.

  • Mandatory RBI Public Account Deposit: Prescribes that every Official Liquidator must deposit all funds realized from company assets directly into the Public Account of India maintained with the Reserve Bank of India.
  • Procedural Timelines and Accounting: Deposits must be made at prescribed times and in the prescribed manner, ensuring full public financial accountability.
  • Separation of Liquidation Funds: Ensures that public liquidation funds are protected from private insolvency or commercial banking crises by placing them under central treasury custody.
Key Landmark Precedents:
  • Official Liquidator v. Reserve Bank of India, (1989) 65 Comp Cas 285 (Bom): Held that the statutory mandate requiring deposits into the Public Account of India secures public transparency and immunizes liquidation proceeds from commercial banking hazards.
  • Escorts Ltd. v. Official Liquidator, (2003) 117 Comp Cas 212 (Del): Affirmed that funds deposited by the Official Liquidator under statutory directions into the Reserve Bank are held in statutory trust for the lawful beneficiaries of the liquidation.
  • Ramlal v. Official Liquidator, AIR 1974 All 291: Held that the Official Liquidator is a statutory officer bound by rigid public accounting norms, and any deviation in depositing funds outside the Reserve Bank violates fundamental statutory duty.
Courtroom Practice & Strategic Litigation Guidance:

When seeking interim disbursement or dividend payment from an Official Liquidator, ensure that the application includes a formal prayer directing the Reserve Bank of India or Pay and Accounts Officer to release funds from the Public Account of India pursuant to Tribunal sanction.

Section 348 All 470 Sections of Companies Act Section 350