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

The Tribunal finds that a Company Liquidator of Vikram Metals Ltd failed to exercise due care and diligence in performing his functions, and the company suffered loss due to that failure. Under the Companies Act, 2013, 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, but only after giving him a reasonable opportunity of being heard, as provided in section 276(3) and (4).

  1. AOnly issue a warning without recording reasons
  2. BRecover the loss from the liquidator and pass other orders, after giving him a reasonable opportunity of being heardCorrect
  3. COrder recovery of the loss from the company's directors only
  4. DRemove him without any hearing since failure is established

Explanation

Section 276(3) lets the Tribunal recover loss caused by failure to exercise due care and diligence from the liquidator and pass other orders. Section 276(4) requires a reasonable opportunity of being heard before any order, so removal without hearing is wrong.

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