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CS Professional · Compliance Management, Audit and Due Diligence · Due Diligence

A Company Liquidator appointed for Ganga Steels Ltd completes his work but failed to exercise due care and diligence, causing the company a loss. Under section 276(3), what may the Tribunal do?

The Tribunal may recover the loss or damage from the liquidator and pass such other orders as it thinks fit. Section 276(3) applies where loss arises from fraud, misfeasance or failure to exercise due care and diligence, so removal alone is not the only consequence.

  1. AOnly remove him from office with no further consequence
  2. BRecover or cause to be recovered the loss from the liquidator and pass other orders it thinks fitCorrect
  3. CRefer the matter to the Central Government without any order
  4. DDirect the company's shareholders to bear the loss

Explanation

Section 276(3) lets the Tribunal recover the loss or damage from the liquidator where it is caused by fraud, misfeasance or failure to exercise due care and diligence, and pass other orders. Removal under 276(1) is a separate power, so option one is incomplete.

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