Sections 287 and 288 of Companies Act 2013: Advisory Committee and Periodical Reports to Tribunal

Sections 287 and 288 of the Companies Act, 2013 form part of the statutory framework governing winding up by the Tribunal. Section 287 deals with an advisory committee that may assist the Company Liquidator and report to the Tribunal. Section 288 requires the Company Liquidator to submit periodical reports on the progress of winding up.

Current rules: The Companies (Winding Up) Rules, 2020 apply to winding up under the Companies Act, 2013. For Section 287, the Rules contain detailed provisions concerning meetings, constitution and functioning of the advisory committee. For Section 288, Rule 76 requires the quarterly progress report to be made to the Tribunal in Form WIN 37.

Section 287 - Advisory Committee

Meaning: An advisory committee is a committee constituted in a Tribunal-supervised winding up to advise the Company Liquidator and report to the Tribunal on matters directed by the Tribunal. It provides a formal mechanism through which creditors, contributories and other persons selected by the Tribunal may participate in oversight of the winding-up process.

Key requirements of Section 287

1. Tribunal's power to constitute the committee: While passing a winding-up order, the Tribunal may direct constitution of an advisory committee to advise the Company Liquidator and report on matters specified by the Tribunal.

2. Maximum membership: The committee may have not more than twelve members. Its membership may include creditors, contributories and other persons in the proportion directed by the Tribunal having regard to the circumstances of the company under liquidation.

3. Meeting within thirty days: The Company Liquidator must convene a meeting of creditors and contributories, identified from the company's books and documents, within thirty days from the winding-up order so that the Tribunal can determine who may be members of the advisory committee.

4. Inspection rights: The advisory committee has the right, at a reasonable time, to inspect the books of account and other documents, assets and properties of the company under liquidation.

5. Procedure: Convening of meetings, procedure at meetings and conduct of the committee's business are governed by the prescribed rules.

6. Chairperson: Meetings of the advisory committee are chaired by the Company Liquidator.

Companies (Winding Up) Rules, 2020 relevant to Section 287

Rule 36 addresses the meeting of creditors and contributories contemplated by Section 287(3). Rule 37 requires the Company Liquidator to report the result of that meeting to the Tribunal as soon as possible and not later than seven days after the meeting, using Form WIN 23. The Rules also regulate the constitution, meetings and conduct of the advisory committee.

Section 288 - Submission of Periodical Reports to Tribunal

Meaning: Section 288 creates a continuing reporting obligation during winding up. It enables the Tribunal to supervise progress by requiring the Company Liquidator to submit periodical reports, including a report at the end of every quarter.

Key requirements of Section 288

1. Periodical and quarterly reporting: The Company Liquidator must make periodical reports to the Tribunal and, in every case, submit a report at the end of each quarter concerning the progress of winding up in the prescribed form and manner.

2. Review of Tribunal orders: On an application made by the Company Liquidator, the Tribunal may review orders made by it and make such modifications as it considers fit.

Rule 76 and Form WIN 37

Rule 76 of the Companies (Winding Up) Rules, 2020 prescribes the practical reporting requirement under Section 288(1). The Company Liquidator is required to make quarterly reports to the Tribunal in Form WIN 37 regarding the progress of winding up.

How Sections 287 and 288 Work Together

Section 287 supports participation and oversight through an advisory committee, while Section 288 provides continuing judicial supervision through periodic reporting. Together, the provisions help the Tribunal monitor the Company Liquidator's administration of a company in winding up, the progress achieved and matters requiring further directions or modification of earlier orders.

Important Compliance Points

  • The advisory committee is constituted when directed by the Tribunal in connection with a winding-up order.
  • The committee cannot exceed twelve members under Section 287(2).
  • The meeting of creditors and contributories under Section 287(3) is to be convened within thirty days from the winding-up order.
  • The Company Liquidator reports the result of the relevant meeting under Rule 37 in Form WIN 23.
  • Quarterly progress reporting under Section 288(1) read with Rule 76 is made in Form WIN 37.
  • The Tribunal retains power under Section 288(2), on the Company Liquidator's application, to review and modify its orders as it thinks fit.

Official Legal Resources

For the authoritative statutory text and current subordinate legislation, users should verify the latest version of the Companies Act, 2013 and the Companies (Winding Up) Rules, 2020 through official Government sources. Amendments, notifications and procedural requirements should be checked before relying on any provision in a pending matter.

Disclaimer: This article is for general legal information. It does not constitute legal advice. Statutory provisions, rules, notifications and Tribunal directions should be verified for the facts and date relevant to a particular proceeding.