Sections 349 and 350 of the Companies Act 2013: Liquidator Bank Deposits
Sections 349 and 350 regulate how money received during company liquidation is to be handled. Section 349 deals with money received by an Official Liquidator, while Section 350 governs deposits made by a Company Liquidator and the consequences of retaining excess cash beyond the permitted period.
Law reviewed against the current text of the Companies Act, 2013 and the Companies (Winding Up) Rules, 2020. Updated: 17 September 2026.
Section 349 - Official Liquidator to make payments into Public Account of India
Meaning: Section 349 requires every Official Liquidator to pay money received by him in that capacity into the Public Account of India in the Reserve Bank of India, in the prescribed manner and at the prescribed times.
What Section 349 requires
The provision creates a statutory safeguard for money received by an Official Liquidator. Such receipts are not to be treated as private funds. They must be dealt with through the prescribed public-account mechanism.
Official Liquidator: In the winding-up framework of the Companies Act, the expression refers to an Official Liquidator appointed under the Act for functions assigned to that office. Section 349 specifically addresses money received by the Official Liquidator while acting in that official capacity.
Section 350 - Company Liquidator to deposit monies into scheduled bank
Meaning: Section 350 requires every Company Liquidator to deposit money received in that capacity in a scheduled bank, to the credit of a special bank account opened for the purpose, in the prescribed manner and at the prescribed times.
The Tribunal may permit the account to be opened in another bank specified by it if the Tribunal considers that course advantageous for the creditors, contributories or the company.
Retention of money for more than ten days
Under Section 350(2), if a Company Liquidator retains for more than ten days a sum exceeding Rs. 5,000, or another amount which the Tribunal has authorised him to retain, he must satisfactorily explain that retention to the Tribunal.
If the retention is not satisfactorily explained, the statutory consequences include:
- interest at 12 percent per annum on the excess amount retained, together with such penalty as the Tribunal may determine;
- liability for expenses caused by the default; and
- disallowance of all or part of the liquidator's remuneration, or removal from office, as the Tribunal considers just and proper.
Difference between Sections 349 and 350
Section 349: applies to an Official Liquidator and directs payment of liquidation receipts into the Public Account of India in the Reserve Bank of India.
Section 350: applies to a Company Liquidator and requires liquidation receipts to be placed in a special bank account in a scheduled bank, subject to the Tribunal's power stated in the proviso.
Practical compliance points
- Liquidation money must remain segregated and be handled only through the account mechanism required by law.
- A Company Liquidator should avoid retaining cash beyond the statutory limit and period unless authorised by the Tribunal.
- Records of receipts, deposits and any Tribunal authorisation should be maintained as part of the winding-up record.
- Sections 349 to 351 should be read with the applicable Companies (Winding Up) Rules, 2020 and any relevant order of the National Company Law Tribunal.
Official legal sources
For the latest authoritative text and procedural rules, refer to the official Government sources below:
Frequently asked questions
What is Section 349 of the Companies Act, 2013?
It requires an Official Liquidator to pay money received as Official Liquidator into the Public Account of India in the Reserve Bank of India in the prescribed manner and at the prescribed times.
What is Section 350 of the Companies Act, 2013?
It requires a Company Liquidator to deposit money received in that capacity into a special account in a scheduled bank, subject to the statutory proviso and the requirements governing retention of money.
Can a Company Liquidator keep more than Rs. 5,000 for over ten days?
Section 350(2) permits a different amount where the Tribunal authorises it on the liquidator's application. Otherwise, unexplained retention beyond the statutory threshold and period can attract interest, penalty, expenses, reduction of remuneration or removal from office.