Winding-ill'

s:noe a ~0I::!Dcm- is
an <:lT'h ·fi .
end b-v a process
.. •
~ 1.1. ci
al legal person
· · . o fl its life shall be
ander the Cam ~w . In the words of ' brought to an
pa.rues &ct, c P almer, "A compa
Cp· or bY re m t n y incorporated
. . · o Y a l from th anno be put to an end
the life of a. ·
e register as exce pt by w·md.mg
com11•any can a defunct com -
iIJlllecramation also b e exting pany. Howev
,and reconstru uished u n d e r er,
ction. the scheme o
f
_
As p er se c tio n M E A N IN G
2 (94A), Wind
or li q u id a ti o n ing-Up mean
under the Inso s winding-up
lv under this Act
il)plicable.. en cy and Bank
ruptcy Code
2016, as
Vimding-1.;p m
ay b e defined as
is ,ended a nd it the process by w
s property is ad hich the life of
members . In the ministered for th a company
words o f 'Pen e benefit of its cr
nington' W in editors and
the pro cess b ~ g -U p or liq
y which: uidation is
{a) the: manag
ement of a com
pany's affairs is
hands, taken out of its
directors
(b ) its assets a
re realised by
(c) its debts an a liquidator,
d liabilities are d
ischarged out of
and the proceeds of re
alisation,
(d) any surplu
s of assets rem . . is returned
ammg to its members
shareholders. or
Thu s, the pro . . U inv
cess of Wm dm olves realisatio
PIJ ment of liabil. .es and dis ~- ~ f n of asset
iti trtbution o su \us if any, amongst ths,
tn emben of th rp ' e
e company.
 Corporate L
17.2 aw8

WINDING-UP V. DISSOLUTION
The tenn Winding-Up and dissolution is normally used interchangeably, but
there is a subtle difference between th e two terms:
l. Winding-Up is a process and dissolu_tion is _its end result. In other
words, Winding-Up precedes disso~ution. This means that Winding.
Up is the prior stage and dissolution, the subsequent one.
2. On the commencement of Winding-Up, the corporate status and powers
of the company continue. It is on dissolution that the name of the
company is struck off the Register of Companies, and it ceases to
exist.
3. The company is not dissolved immediately on the commencement of
Winding-Up proceedings. Certain legal formalities have to be complied
with for the dissolution of the company. For example, in the case of
Winding-Up by the 'Tribunal ', when the affairs of the company are
compl etely wound-up. the official liquidator makes an application to
the 'Tribunal ' on that behalf. The company stands dissolved from the
date of the 'Tribun al's order.

THE INSOLV ENC Y AN D BANKRUPTCY CODE, 2016

AN OVERVIEW
The Insolvency and Bankruptcy Code, 2016 is the bankruptcy law
of India which seeks to consolidate the existing framework by creating
a single law for insol vency and bankruptcy. The Code became functional
from 1st December, 2016. This code focuses on a creditor-driven
insolvency process and is a paradigm shift from the existing regime
of Debtor-in-Possession to Creditor-in-Control.
Some of the notable amendments of the Insolvency and Bankruptcy
Code~ (Second Amendment) 2018 were -
(a) It provided that home buyers should be treated as financial
creditors owing to the unique nature of financing in real estate projects
and the treatment of home buyers by the Hon 'ble Supreme Court in
ongoing cases. Notably, classification as financial creditors would enable
home buyers to participate equitably in the insolvency resolution process
under the Code. However, it will be upto the Committee of Creditors
[COC] to give home buyers the status of secured or unsecured
creditors.
(b) It provided that the voting percentage in the Committee of
Creditors [COC] to approve a resolution plan was to be reduced
to a minimum of 66% from 75% earlier.
~
I

•,,c,-Up 11.17
Jf1fl dlr•,::,

MODES OF WINDI NG-UP

WJtb (be insolvenc~ and Bankruptcy Code, 2016, becoming limclionJI. Section
o(O now proVIdes for only one mode of winding-up-namely by
27
tribunal. If the company ,vants to be wound up Voluntarilv•. it will
tbe . •· . ·
bSfe
to follow the provmons of Chapter V of the lnsolvenc
~ .v and
iu-uptcy Code, 2016.
pan
Winding-Up
I
t
Compulsory
Winding-Up
•
Voluntary
Liquidation
u/s 271 of u/s 59 of InsolYency
Companies Act, and Bankruptcy
2013. Code. 2016.

WINDING-UP BY THE TRIBUNAL

Circumstances Under which Company may be Wound-up by Tribunal.

As per Section 271, the Tribunal can order the Winding-Up of a company,
also called Compulsory Winding-Up on receiving a petition made to
it under Section 272, under the following circumstances:
(a) By special resolution , the company has resolved to be wound up by
the Tribunal;
(b) The company has acted against the interest of the sonreignty
and integrity of India, the security of the State, friendly relations
with foreign States, public order, decency or morality;
lc) On an application made by the Registrar or any other person
authorized by the Central Government by notification under this Act
the Tribunal is of the opinion that:
(i) The affairs of the company have been conducted in a fraudulent
manner; or
(ii) The company was formed for fraudulent and unlawful
purpose; or
(iii) The persons concerned in the formation or management of its
affairs have been guilty of fraud, misfeasance or miscondu ct
in connection therewith and that it is proper that the company be
wound up;
(d) The company has made a default in filing with the Registrar its
financial statements or annual returns for immediate preceding
five consecutive fmancial years; or
17.18 Corporate /,aws

(e) The Tri lrnnnl is of the opinion lhal it i~ Just and c,1ultahlc that the
company should he wound up.
Note : Inability f-o ))R)' debts Is no lon ~cr a ~round on which a company
cnn be wound Ufl compulsorily by fla c TdbunaJ. This ground is now dc,j lt
with under the Insolvency and Bankruptcy CocJc, 2016, and has been already
discussed under the heading Insolvency Resolution Process.
As per Section 27l(c)~ f:hc lrlbunnl may nlso order for the Windjng -
Up of the company if it is of the opinion that it is .iust and equitable
that the company should be wound. While exercising its powers under
this clause. the Tribunal shall give due weightage to the jnterest of the
company, its employees, its creditors and shareholders, and the interest of
the general publi~. The n·ibunal's powers are discretionary. The Tribunal
may refuse to make an order of Winding-Up, if it is of the opinion
that some other remedy is available to the petitioners and that they
are acting unreasonably in seeking to have the company wound-up
instead of pursuing that other remedy.
On the basis of previous judicial decisions, following are a few
examples of just and equitable on the basis of which the Tribunal
may order the Winding-Up :
1. Deadlock in Management : Where the Board of Directors is divided
into two dissenting groups, it becomes impossible to take any decisions
in such a company. Therefore it becomes dffficult to manage such a
company. The only way to resolve this deadlock is to wind-up the
company by the Tribunal, as happened n the case (Re) Yenidje
Tobacco. Co. Ltd. (1916). The facts o the case are:
A and B, who traded separately as cigar tte manufacturers agreed to
amalgamate their business and formed private limited company of
which they were the only share holder and the only directors. They
had equal voting rights. The articles p ovided that disputes would be
decided through arbitration. A disput arose which was submitted to
arbitration, but one of them refused t accept the award. Both became
so hostile that none of them spoke t each other, except through the
secretary. Thus, there was a comple d~adlock and the Court ordered
the company to be wound up. ·. ·
It should be noted that a company .pwever cannot be wound-up if the
only difficulty is th·e difference in ✓iew
1
~f the.majority directorate and
those representing the minority. · ' ·

2. Loss of Substratu·m : A company's·substratum is the purpose or the

main object which. it was formed ·to achieve. If the company has
· abandoned all of its main objects and.not merely some of them, or if
 17.19
P
,~, J;,,g-U Ot achie
.
ve any of .
.
tts main ob1e
'
.
· cts, ·Its substratum ,s gone and
1·t ca
nn the Tnbunal .
. be wound-up by
Wl 11 (Re) German
d by the following case:
This point can be explaine .
pate Coffee Co. (1882)
1ed fo~ the purpose of manufacturing
coffee
A compan y wa s fom ent
de r a pa ten t wh ich wa s to be granted by the Governm
frol11 dates un On a petition of
Ge nn an y. Th e Ge rm an patent was never granted.
of mpany had
ho l~e r it ~a s hel _d tha t the substratum of the co
a share it was
it wa s im po ssi ble to ca rry on the object for which
failed and
efo re, it wa s jus t an d eq uitable that the company be
fonned. The.r
wound-up.
et Electric
the ca se of A Ra m ac handran v. Narasaraop
In ng ekctricity
rat ion Lt d., the co mp an y's main business of supplyi
Corpo eived
cu lar are a wa s tak en ov er by the state. The company rec
in a parti sits,
fro m the Sta te Go ve rnm ent which, it put in fixed depo
compensat ion es.
sin ess for 17 ye ars , alt ho ug h it had a long list of objectiv
and did no bu -Up
t the co mp an y ha d los t its substratum and Winding
It was held tha
was ordered. the
(R e) Ka ith al an d Ge ne ral Mills Co. Ltd. (1951),
In the case have
tha t the su bs tra tum of the company is deemed to
Court he ld
disappeared when
the company is gone; or
(a) the subject matter of ; or
t for wh ich it wa s inc orp orated is substantially failed
(b) the ob jec
any except
it is im po ssi ble to ca rry on the business of the comp
(c) that the
there is no reasonable hope
at a loss which means that
can be attained; or
object of trading at a profit bilities.
ex ist ing or pro ba ble ass ets are insufficient to meet the lia
(d) the
tha t if the bu sin ess of the company can be carried
It is to be noted up.
a los s, it is jus t an d eq uit ab le for the Tribunal to wind it
on only at rs that
re ap pre he ns ion on the part of the some shareholde
But a me loss instead of
will be frittered away and
the assets of the company
ld as no groun&.
gain will result, has been he lders ~ave
ion of M ino rit y : W here the majo~ t/ _sha~eh_o
3. Oppr ess
pre ssi ve po lic y tow ard s the mmonty, 1t 1s sufficient
adopted an op able
the W ind ing -U p_ the co mpany un~br j~st and equit
ground for case: Loch v.
ou nd s-T his po int can be illustrated by the followmg
gr
24)
John Blackwood Ltd. (19 the minority
s cas e the co mp an y wa s wound up on the petition of ed
In thi
wh en dir ec tor s wh o he ld majority of the shares, refus
shareholders
 17.20
Corporate Laws
to call annual general meeting, or to submit acco
unts to the petitioners
or to have auditors appointed, or to give the petit
ioner any infonnatio~
about the com pany 's affairs, with a view to coer
cing the petitioners
into selling their shares to them, at an unde r
value.
4. Illeg ality of Objects and Fra ud : If a
com pany is incorporated
with an illeg al obje ct or if its obje cts beco me
illegal because of a
chan ge in the law, the Tribunal will orde r the com
pany to be wound-
up on the grou nd that it is just and equitable
.
Similarly, if a company is promoted to perpetrat
e a fraud, the Tribunal
shall orde r its Winding-Up. Thus, a Winding-Up
order shall be made
if a company has been conceived and brought
forth in fraud or for
illegal purposes. It is not sufficient that there is
fraud in the prospectus
or in the manner of conducting the company's
business. It must be
shown that the original objective of creating the com
pany was fraudulent
or illegal.
In the case of Universal Mutual Aid a11d Poo
r Houses Association
v. A.D. Thippa Naidu, the Madras High Cou rt
observed : where
the main obje ct of a company is the cond uct
of a lottery, the mere
fact that som e of its objects wen~ philanthropi
c, will not prevent the
com pany from bein g wound up, as bein g one
formed for an illegal
purpose.
5. Bub ble Com pan y : When the co mpany is
a bubb le i.e. it never had
any real business or owned any property, it will
be wou nd up by the
Tribunal. Such companies are also called 'fly-
by-night' companies.
PET ITI ON FOR \\1IND I NG- UP [SE CTI
ON 272]
An application to the Tribunal' for Winding
-Up is called a petition. As
per section 272(1), petition for the Winding
-Up of the company by
the Tribunal can be presented by any of the
following:
(a) by the company;or
(b) by any contributory or contributories; or
(c) by all or any of the parties specified
in (a), and (b), whether
together 9r separately; or
(d) the Registrar; or
(e) by any person authorised by the Central
Government in this
behalf; or
(f) in a case of a company acting against the
sovereignty, integrity and
security of the country etc. as per Section 27l(
b), by the Central
Government or the State Government.
The Min istr y of Cor por ate Affa irs bro ugh
t into force the
 ,,,,~♦ t 'f'
~•"' naoh•~ (Wlndfn~I-1 Ip) Huit t 20W ,., 1 f • " "'" . ] rtJn , ,.
( o"'dit
•
,, n1k ~ e flr t on- ,~ot \\' lttrll ng •,111 ,,
~c
I i ,omr,~n, .,,~u ,r~
m:lv ~
l'l nerd in Form WI N ·1 m ht rn wr, 1 ;f th l •<'
I
,rr~r ,r
! u-ipUcetc and ,·rrlfl<'d h~, ,rn 11ff1cl,n II 1·,a,I" f,t th, fl ' ,,,,r,n
I'"
'" tij ioncr~. And m CA Qr the pc111mn 1q c< nh ,I h'f :. ~,cl y
<rr;pn r:Ht
(,( .m<i
r" ti • Dircct0r. Sccrctnt V (l l nn, nllll'r rmlhon,ul 1rw·• f(<,n thrr(
i,, ll
· -I aflidavit ~hall br In Form WI N .l
~lll 1

•t'on In th r Com pa ny
) prtl I ·
ulion rr~r,lve
(• n,cn,brrs, of 3 c0mp311y may. by passing a special rc11ol
1'kC hun,:11 In \I>< 1-,
," affairs of the company should be wound-up by the Tn
.. 011 to the Tribunal for Windmg-lJp
tb8 1thethe company w1·11 tI1en pet1t1
'case. .
sectio n 272(4 ) reqm res cv~ryh company to file a Statement of Affain
'th the Tribunal along wit the petition for
Winding-Up. Not ooJy ,,
1
" company required to file a statemen
t of affairs if it is intending
opposing it. This
tbtfile petition for Winding-Up, but also when it is
toeans that the moment a petition is filed by any body
against the company
wi th
:Venif frivolous, the company will have to file its statement of affairs
the Tribunal.
by any person
Sectio n 274(1) provides that where a petition has been filed
other than the company, and the Tribunal is satisfied that
there is a prima-
t the company
facie case for making the Winding-Up order, it shall direc
to file_its objections along with a Statement of
Affairs with it, within
30 days of such Order. The Tribunal may allow a further
period of 30 da)s
the Statement
under special circumstances. A company which fails to file
se the petition~
of affairs with the Tribunal, forfeits the rights to oppo
shable "ith
ud directors and every ·officer in default shall be puni
imprisonment upto 6 months, or fine ranging from
t 25000 to f 5
further providec'
lalilis or both, under section 274(4). Section 274(5)
Court by chc
that a complaint in this behalf may be filed before the Special
other person
Registrar, provisional liquidator, company liquidator or any
authorised by the Tribunal.
As per Companies (Winding-Up) Rules, 2020 on
III April 2020, the
should ht> in
Statement of Affairs required to be filed by the company
prior to tht-
Form WIN 4 and containing information upto 30 days
b) an afndan h,
date of filing the petition, in duplicate, duly vcriflcd
1

WIN ~.
of concurrence of the statement of affairs in Form
(b) Petition by Contributory jSccfion 272(2)1
lownrds tlw
A contributory is defined as any perso n liable to contribull!
t1 r of
company in the event of its being wound-up. Tiu• hold
rass111lyets of'da shares is also a contributory for thl! purposes of a
pai -up
l 7.22

prtition not bcco usc hr Is lh1 hlc to rontrlhutc hut hH AUse he haf! the
right to share ln thr surplUN If nny In a Wh1dlng-Up.
1

It is to be notrd that it wi ll be requ isite thul the shares in rcsrcct of whi ch

he is a contributory were m·lgl nnlly nlloff cd fo him, or have been held
b~ him and n~gistered in his name fo r of least 6 months du ring the
1

18 months preceding the Wi nding-Up, or hnvc devolved upon him

through thr death of a formc,· holder.
It is to be noted that a contributory whose calls is in arrears, may not
be permitted to present a Winding-Up petition unless he pays the
calls or satisfies the lribunal that he is willing to pay it.
(c) Petition by all or any of the Persons Specified in clauses [aj and rb]
A joint petition for Winding-Up the company may be presented by the
company, and the contributories.
(d) Petition by the Registrar [Section 272(3)]
A Registrar can petition to the Tribunal for the Winding-Up of a company
only with the prior approval of the Central Government. The Central
Government shall give its approval only after hearing the representation
made by the company.
A Registrar may petition on all grounds except those specified in
clause [a] of this subsection i.e. on the ground of passing a special
resolution by the company.
(e) Petition by any Person Authorised by Central Government
The Central Government may authorise a person to present a petition
on its behalf under section 272, if from the reports of the inspectors
appointed to investigate the affairs of a company, it appears that the business
of the company has been conducted for fraudulent or unlawful purpose.

(f) Petition by Central or State Government

If the company has acted against the sovereignty, integrity or security of
India or the State, or against public order, decency or morality, the Central
Government or the State Government can petition to the Tribunal for the
Winding-Up of the Company.
I

ADMISSION OF PETITION
As per Companies (Winding-Up) Rules, 2020, upon filing of the petition,
it shall be posted before the Tribunal for admission of the petition and for
fixing a date for its hearing, and for appropriate directions as to the
advertisement of the notice to be published and the persons to whom copies
of the petition are to be served. Where the petition has been filed by a
 -11 u,UP
f~/1 dI o fin ,
tb er than the company., the Tn.6una 1 . . -
oo O . n lhin! '< s fi•
pets qjven to the company and give an .
Olay , tf
oPJ )onuruty o" 0 .' '~direct D<Atct
to ~e Ci directions as to the advenisem 11ng h~<tt'd, hd ore
111vlo~ Jl shall . be . advertised in F onn ent of the peiitio~ll. eTb · en 0ti
UJ"h . -
~ ·tto
for hea rtn . .,, in 6, 1 ce of the
petl the date fixed 001 C<c, .

g, In anv da" - s than 14 ~,......_

fore guage widely circ . • ilv new i1rll: :in • UA.Y '.')
~ed "ernacular• lan ulat d ·. -il",_ .e-r tn Enr rlri.b
o h ffi e m the St . ~ ,
' ·torY in wh1c the registered o ce of the aite or TI nion
terrt .
company is situa1ied.
rioD 272(5) pro es that a copy of eve n
VId .. ,
sec t l b • Pet itio n mad
al mus a so e filed. with th e n,egistrar
n e to the:
fr1'bun . • and the Reg im- ar shall
brnit bis VIews to the Tnbunal within 60 davs of th
stl · e receipt or such
petition.
poWER OF TRIBUNAL o~ RE
. (SEcnO'.'i 2~~IPr or PETITio?-i
•
ft.S per Sect10n 273(1 ), the Tri bu na 1 on receipt of ..
tion for
-
. a peti
Winding-Up ma de und er section 272 ma, pass am· 0 f th -
· . e foihming
orders nam ely:
with out cos ts·, or
(a) dismiss it, with or
er that it thtn~ '•-~ tiIt; or
(b) mak e any interim ord
r of th .
(c) appoint a Provisional Liquidato th
c com pany ll e making of
t1
a Winding -Up ord er; or
the compan .\' \\1l. h or \\l.th OU [ CO Sl5 "
(d) mak e an order for \Vinding-Cp ·
or
(c) any other that it th inks fit.
made within 90 dan of the
The order by the Tribunal should be ·
bunal.
presentation of the petition to the Tri
er as per Sedion 273 (l)(c), to
Where the Tribunal has made an ord
shall before making such an
appoint a Provisional Liquidator it
y *in Form "Th 7 and giw
appointment, give notice to the compan
y to make its representation .
reas onabl e opp ort uni ty to the compan
appointed by the Tribunal,
Provisional Liquidator is a Liqu ida tor
ding-up of a company v.rith the
after the lodging of a petition for the win
determines the petition. The
Tribuna l, but before the Tribunal hears and
safeguard the assets of the
Provisional Liquidator is appointed to
pending the hearing of the
company and maint.ain the status quo
Pttition. He is appoin ted from amongst
the in insolvency professionals
kruptcy Code, 2016, unless
registered under the Jnsoh·ency and Ban
..\pril 2020.
• " " J'leT Companies (Windmg-L"p)
Rules. 2010 which came into force on l"
 17.24 ( 'orporate Laws

the Official L1quidator is a1)pointcd a~ Provi~ional Liquidato

r. The Order
appointing the Provisional 1Jquidator is mad e *In Form
WIN 8.
Again, the Tribunal slu\11 not refuse to mak e a Wlndlng. . Up
order on the
ground that the ~sscts or the compnny have hccn mort gaged for
an amount
equal to or in excess of those assets, or that the comp any has
no assets.
Also where a petition has been made on the ground that
it is just an
equitable that the company be wound up, the T ribun al may'
refuse to make
an order where it feel s that the petitioners arc act1n g unrea
sonably and
asking for the Winding-Up of the company, instead of seeki
ng some other
remedy.

FILING OF STATEMENT OF AFFAlRS

As per Section 274, where a petition for-winding up is
filed before
the Tribunal by any person other tban the company,
the Tribunal
shall, if satisfied that a prima faci~ case for winding up of the
company is
made out, order · the comp~_n f to file its objections
along with a
statement of its affairs, within 30 days of the order. How
ever, in a
situation of contingency' or special circumstances, the Trib
unal may
allow a further period of 30 days to the company in whic
h to file its
statement of affairs.
A company which fails to file its statement of affairs shall
forfeit the right
to oppose the petition, and directors and officers of
the company
responsible for such non-compliance shal l be puni
shab le with
- imprisonment upto 6 months, or with fine ranging from
25,000 to 5
lakhs, or with both.
Section 273(3) further provides that the directors and officer of
the company
within 30 days of the winding up order, must submit
the books of
account of the company, duly completed and audited to the
liquidator.
LIQUIDATOR
Once the petition for Winding-Up is admitted, the assets of
the company
have to be realised and distributed amongst the debenture hold
ers. creditors
and the shareholders. For this purpose an agent known as
the liquidator
is appointed.
In the case of Winding-Up by the Tribunal, the 1)·ibunal
at the time
of the passing of the order of winding up, shall appoint
an Official
Liquidator or a liquidator from the panel maintained unde
r Section
275 (2) as the Company Liquidator. As per Section 275(
7), while
p~ssi~g a Winding-Up order, the Tribunal may appoint the
Provisional
L1qmdator as the Company Liquidator.
 ,['l' ,
-~i1,r1F
-I section 275 (2). (he f rn,hlona l u,,ul<lafi,r ,,, fh, ( ffmµanv
~< ,,er
r, tor, '" . · , ,, fhn.- , n,wn
ds the case ma,. , hall he ar,poi ntcd t,\ 'l
, ' r,,,m
nly
~iq'''d:, thC insolre nc~ profrrnonal, regh tercd under the ln l<Jlve
rr,tr.<l
,r1ofl ~rtJ(ruPtcy Cod~. 2016 . Wh~r c a pro\ rwmal l1qu1dat<,r ' :Jf'P'1
,rd 8rribonal. the Tnbun~I may l11n,t and restrict his p<,we " Ir; th'!
,,r,kr

,· t11e . him. but otherwise he shall have the ~me powen

a\ a hquJd::tttJr
b· ·nung · (\\'indi og- UP) Rules, 202-0 , where an ordtr
,rrt11 the compames
per t f · · I I' idator
~s tbe appointmebn Ro ~rtrovmonf ah '~~i~ator or Company Liqu
O t e 1~CLT shalJ , wH hin a period not
(or been 01ade, t e egis ar
ation
bas ban 7 days from the date of passrng of the order, stnd intim
9. by
1110;/colllPany liquidator or provisional liquidator inform Wl.\"
m~.m.s
co . tered post of by speed post or by couner service or by electronic
5
reg1 aJso to the Registrar of Companies.
,od e appointment as p rovm . . I 1·1qrud .
ona ator or Company Liquidato r,
o.ntbliquidator is· reqm·red to fil e Wit· h the Tnbu· nal a declaration in
sue~ WIN 10 disclosing conflict of interest or bck of independence,
tfOIIP • tm
,itbin 7 days of appo~ ent.
intment -
ction 275 further provides that the terms and conditions of appo
Se well as remuneration of the Provisional Liquidator and
Company
~ uidator shall. be .specified by the Tribunai on the basis of task to be
L1q . f
performed, quahficat10ns, size o the company, etc.
or more
Section 291 allows a Company Liquidator to appoint one
ts, or
Chartered Accountants, Company Secretaries, Cost Accountan
s, with
Legal Practioners to assist him in the performance of his dutie
the permission of the Tribunal.
nal and
The Company Liquidator must act as per the order of the Tribu
Tribunal.
complete liquidation process within the time frame set out by the
mittee.
The Company Liquidator is assisted by a Winding-Up Com
The Tribunal may also appoint an Advisory Commi~ee.
Tribunal
The Company Liquidator is required to submit a report to the
within 60 days of bis appointment.
CONSEQUENCES OF WINDING-UP ORDER
WL~ 11,
Once the Winding-Up order is made by the Tribunal in *Form
and to
it shall be sent to the company liquidator in *Form WIN 12
tised
the Registrar in *Form WIN 13. The winding-up order shall be adver
in a
in *Form WIN 14, within 14 days of the order, by the petitioner
having
E~glish language newspaper and a vernacular language newspaper
wide circulation.
;--
force on I 51 April, 2020.
As per Companies (Winding-Up) Rules, 2020 which came into
17.26 Corporate Laws

Its various consequences are ns follows:

Section 277 provides thnt:
1. Where the Tribunal makes an order for appointment of Provisional
Liquidator/Company Liquidator for the Winding-Up of a company, it
shall, within a period not exceeding seven days from the date
of passing of the order, cause intimation to be sent to the
Company Liquidator or Provisional Liquidator and the Registrar.
2. On the receipt of the copy of order of appointment of Provisional
Liquidator or Winding-Up order, the Registrar shall make a note in
his records relating to the company, and notify it in the Official
Gazette. In the case of a listed company, the Registrar shall
intimate about such appointment or order, as the case may be, to the
stock exchange or exchanges where the securities of the company
are listed, as well.
3. The Winding-Up order shall be deemed to be a notice of discharge
to the officers, employees and workmen of the company, except
when the business of the company is continued for beneficial realization
of assets.
4. All the powers of the BOD are now vested in the Company
Liquidator and the promoters, directors, officers and employees must
extend full co-operation to him, otherwise each will be liable to
imprisonment upto 6 months or fine upto t 50,000 or both.
5. Once a Winding-Up Order has been made, the Company Liquidator
shall, forthwith take into his custody/control all the properties
and effects, actionable claims and the books and papers of the
Company.
6. As per Section 281(1) the Company Liquidator must submit a
report *in Form WIN 16 to the Tribunal within 60 day's of
receiving details about the company's assets, capital, debts, due,
list of contributories and their due etc.
7. Within three weeks from the date of passing of Winding-Up order,
the Company Liquidator shall make an application to the Tribunal for
constitution of a Winding-Up Committee to assist and monitor
the progress of liquidation proceedings by the Company
Liquidator. The Winding-Up Committee shall comprise of the
following persons namely:

• As per Companies (Winding-Up) Rules, 2020 which came into force on 15' April, 2020:
 17 r,

hed to th e Tr'h .
~ ·r.> - ~c i:a J Liqaid. i lor attac , una1:
t' l v v •
C·redrtor,, •a d
l , oroiatt of Seic uffed. ,
tb - •
na
I
o
o, m rn ate d by the Tribun ~. 1
.\ profrssto . . '
tel . e convener of the meetin gJ
~.c ud ator ~b all be _th
. fbt (om~an?· Lr 1c b .sb11J .UJhf aod monitor
co rn_ rnm e:e ~-h
~· of tbe \~ Ul~mg-l p uidation
u1 danoo pror ne di ng s rn foJJowing ar eu of liq
tbt fiq
-tion,,.~ aameh.-:
full'-
-:} raking o,·1er assets:
l- ent of affairs:
lb)E'-aminarion of the statem
mpany
ry of p::-o~~ -. casb or any other assets of the co
(d Reron?
therefrom;
including benefits deriwd
an y;
and accounts of the comp
(01R ~i e" of audit reports
(e) _Sale of assets; ;
creditors and contributories
(fl Finali za tion of list of
of claims;
1g) Compromise: ab
andomnrnt and settlement
s, if any; and
(b) Pa~ment of dividend
e to time.
y oth er fim cti o~ as the Tnbunal may direct from tim
fi) An a report
ny Li qu id at or sh all pl ace before the Tribunal
9. The Compa ee on a
th e m in ut es of th e meetings of the committ
along with ng,
, du ly signe d by the . me mbers present in the meeti
monthly basis any is
io n til l the fin al rep ort for dissolution of the comp
for considerat
na1.
submitted before the Tnbu report for
an y Li qu ida tor sh all prepare the draft final
10. Th e Comp ee.
an d ap pr o,
1
aJ of the Winding-Up Committ
consideration Committee
al re po rt S-O ap pr ov ed by the Winding-Up
11. The fin e Tribunal,
su bm itt e
. d by th e Co mpany Liquidator to th
shall be pany.
of a di sso lu tio n or de r in respect of the com
for passing p of a company
on 27 8 pr ov ide s tha t the order for Wmding-U of
12. Secti cre ditors and all the contributories
vo ur of all the
shall operat.e in fa petition.
been made on their joint
the company as if it had has been
27 9 pr ov id es th at wh en a Winding-Up order
13. Section it
isi on al Li qu id at or ha s been appointed, no su
Passed or a Prov be commenced, or if pend
ing
pr oc ee di ng sh all
or other legal against
te of th e or de r, sh all be proceeded with, by or
on the da ibunal and
m pa ny ex ce pt wi th th e permission of the Tr y
the co
ter m s as th e Tr ibunal may impose. An
subject to such g permission under this
section
to the Tr ibu na l see kin
application
 17.28 Corporate I
,f..t VvJf

sh~ll be *in Form WIN 16 and s~all . be dispo~ed off by the

Tnbunal within 60 days. Again, nothmg in this ~ect10n HhaH appl
to proceedings pending in aJJpeaJ before the Supreme Court ,,~
High Court.

ADVISORY COMMlT TEE

As per Section 287, the Tribunal may at the time of. making a Wind; ng.
1

Up Order or any time later, direct that an Ad v1sory Comrnitte.t h

appointed to advice the Company Liquidator and to report to thE:
Tribunal on such matters as the Tribunal may direct. E:

Members hip
The Advisory Committee shall not consist of more t?an 12 members, Who
are creditors and contributories, or persons h~ldmg powers of attorney
from creditors or contributories, in such proportion as may be agreed 00
by at the meeting of creditors and contributories.
Meetings of Creditors and Contributories to Determine Membership
The Company Liquidator shall convene a meeting of creditors and
contributories as ascertained from the books and documents of the company!
within 30 days from the date of order of Winding-Up, for enabling the
Tribunal to determine the membership of the Advisory Committee. He
shall summon meetings of creditors and contributories by giving not
. _. . . 1 less than 14 days notice sent individually, by registered post or speed
post or by electronic means. Within 7 days of holding of the metting
of the creditors and contributories, the Company Liquidator shall report
the result of the meeting to the Tribunal *in Form WIN 23. But where
they fail to determine the proportion, the Tribunal will determine how
many will be from contributories and how many from creditors.

Meetings of Advisory Committee

As per Companies (Winding-UP) Rules, 2020-
1. The advisory committee shall meet at such times as it may, from
time to time as appointed. The Company Liquidator or one-third
of the total number of members, may also call a meeting of that
committee as and when they think necessary.
2. The quorum for a meeting of the advisory committee shall be one-
third of the total number of the members, or two, whichever is
higher.
3. The advisory committee may act by a majority of its members
II
• As per Companies (Winding-Up) Rules, 2020 which came into force on I ApriJ, 2020.
 ;,,C' UP . 17.29
11~1 nt at a meetmg, but shall not act 1
1 P,ese ·ber of the advisory con •. un css a quorum is •
present.
Jllelfl . u111ttec may resl . b
. A,.
\1'11!1·ng signed by bun and . delivered to tiie Company gn Liquidator
.Y notice in
4 e ber of the advisory committee i di . ·
111 111
5. Jf_ aotllPoUllds or arranges with his er:;,( udged as an Insolvent,
ot c consecutive meetings of the said co I ors, or Is absent from
~ve b h . mrmttee without the leav
f tbose mem ers w o, together with himself . e
oor contributories, as the case may be his offic'e rehprellsebnt the creditors
. ' s a ecome vacant.
A flletllber of the advisory committee may b
6. tbe directions_ of the Tribun~l, at a meet:n;e:;::::ii:::ti~t ~:
re resents
. creditors,
. or at a.meetmg of contributones· I'f he represents
P
onlflbutones, •
by an ordmary resolution of wh'1ch seven day's
•
notice bas been given, stating the object of the meetings.
C

, JllpaDY Liquidator and Members of Advisory Committee Dealin

C~ b CofllPany's Assets g
\\1ltmpanY Liquidator nor any member of the advisory committee shall either
C
d'~ectlY or indirectly, become purchaser of any part of the company's 'assets
;cept by leave of the Tribunal. '
~dvisorY Committee not to Make Profit
No member of the advisory committee shall, except under the order of the
Tribunal, directly or indirectly, be entitled to derive any profit from any
transaction arising out of the winding up or to receive out of the assets, any
payment for services rendered by him in connection with the administration
· of the assets.
Right to Inspect Accounts of Liquidator
The Advisory Committee shall have right to inspect the books of accounts
and other documents, assets and properties of the company under liquidation,
at a reasonable time.
DISSOLUTION OF THE COMPANY UNDER
COMPULSORY WINDING-UP
Sedion 302 provides that when the affairs of a company have been
completely wound up, the Company Liquidator shall make an
application to the Tribunal for dissolution of such company. The
Tribunal shall on such an application or when it is of the opinion that it is
Just and reasonable to order the dissolution of a company, shall make an
order for the company to be dissolved, and the company will stand
dissolved from the date of such order. The Tribunal shall file the
order within 30 days of the date of the order with the Registrar. The
17.30

Company Liquidator shall nlso be directed hy f:hc TrihunuJ to forw

th e copy of the· order
. to the. Rcgistn1r
. . ".l'I,c I',cgrnlrar
. shall then r.ccor
Urd
0
the same in the register relating to the company.
COMPULSORY WINDING UP IJY NCL'J' AS Pim COMPANH:s
(WINDING UP) RULES, 2020
• Petition by Applicant in Form WIN-I or WIN-2 in Triplicutc.
• Petition to be accompanied by an Affiidavit in Form WIN-3.
• Statement of Affairs lo be filed in Fonn WIN-4 in duplicate.
• Statement of Affairs to be accompanied by an Affiidavit in Form WIN-5.
• Advertisement of petition in English and Vernacular Newspaper, 14 days before
bearing of petition, in Fonn WIN-6.
, Notice to the c~mpany that NCLT wants to appoint Provisional Liquidator so that
company can make representation, in Fonn WIN-7.
• , Appointment of Provisional Liquidator made by the NCLT's order in Form WIN-&.
, .Information sent to Provisional Liquidator or Company Liquidator for appointment
by NCLT, within 7 days of the order, in Form WIN-9.
• Provisional Liquidator/Company Liquidator to file Declaration of Independence or
disclose conflict of interest in Form WIN- IO. ·
NCLT makes Wmding Up order in Form WIN-I 1.
• NCLT sends Winding Up order to Company Liquidator in Form WIN-12.
• NCLT sends Winding Up order to ROC in Form WIN-13.
• Winding UP order advertised in Form WIN-14.
• Company Liquidator submits Final Report to NCLT for dissolution within 60 days of
receiving all details of company's assets, debts, contributories etc. in Form WIN-16.

VOLUNTARY LIQUIDATION OF CORPORATE PERSONS

Chapter V of The Insolvency and Bankruptcy Code, 2016 deals with
voluntary liquidation of companies. Section 59(1) of the Insolvency
and Bankruptcy Code, 2016 states that a corporate person who intends
to liquidate itself voluntarily and meets the conditions and procedural
requirements as prescribed by the Insolvency and Bankruptcy Board of
India (IBBI or Board) may initiate voluntary liquidation procedure
under the provisions of Chapter V.
Section 59 (3) of the Insolvency and Bankruptcy Code, 2016 provides
that the following conditions must·be met by any corporate entity who wants
to initiate Voluntary Liquidation proceedings, namely:-
(a) It has not committeed any default.
The term "Default" under Insolvency and Bankruptcy Code,
2016, means non-payment of debt when whole or any part of
17.30 Co,poratc 1
, l/lV,\•

Company Liquidator shall nlso be dfrcctcd by the Tribunal to fotw

1
the copy of the order to th~ lteglstrnr. The Registrar Nhall then rcc::~
the same in the register relat111g lo the company.
COMPULSORY WINDING UP BY NCLT AS PER COMPANU~S ·---
(WINDING UP) RULES, 2020
• Petition by Applicant in Form WlN-1 or WIN-2 in Triplicate.
• Petition to be accompanied by a11 Affiidovit in Form WJN-3.
• Statement of Affairs to be filed in Fonn WIN-4 in duplicate.
• Statement of Affairs to be accompanied by an Affiidavit in Form WIN-5.
• Advertisement of petition in English and Vernacular Newspaper, 14 days before
hearing of petition, in Form WIN-6.
• Notice to the c~mpany that NCLT wants to appoint Provisional Liquidator 80 that
company can make representation, in Form WIN-7.
Appointment of Provisional Liquidator made by the NCLT's order in Form WIN.g_
• .Information sent to Provisional Liquidator or Company Liquidator for appointment
by NCLT, within 7 days of the order, in Form WIN-9.
• Provisional Liquidator/Company Liquidator to file Declaration of Independence or
disclose conflict of interest in Form WIN-IO. ·
NCLT makes Winding Up order in Fonn WIN-11.
• NCLT sends Winding Up order to Company Liquidator in Fonn WIN- I2.
• NCLT sends Winding Up order to ROC in Form WIN-I 3.
• Winding UP order advertised in Form WIN-14.
• Company Liquidator submits Final Report to NCLT for dissolution within 60 days of
receiving all details of company's assets, debts, contributories etc. in Form WIN- I6.

VOLUNTARY LIQUIDATION OF CORPORATE PERSONS

Chapter V of The Insolvency and Bankruptcy Code, 2016 deals with
voluntary liquidation of companies. Section 59(1) of the Insolvency
and Bankruptcy Code, 2016 states that a corporate person who intends
to liquidate itself voluntarily and meets the conditions and procedural
requirements as prescribed by the Insolvency and Bankruptcy Board of
India (IBBI or Board) may initiate voluntary liquidation procedure
under the provisions of Chapter V.
Section 59 (3) of the Insolvency and Bankruptcy Code, 2016 provides
that the following conditions must ·be met by any corporate entity who wants
to initiate Voluntary Liquidation proceedings, namely:-
(a) It has not committeed any default.
The term "Default" under Insolvency and Bankruptcy Code,
2016, means non-payment of debt when whole or any part of
 17..1 1

•
hns hcconic rn
L

im cnt of th e om.ounldofl de bt 1 c 1111< 1p11y110/c , 1,'4 not'

in~ l1l r.
,nnid by t11c co11,01n c c )lo
1
rw ·- Soln ncy) from nrn,lorll .Y
of th e
sr at.ion (D rr ln rn tio n of
;\ dt'Cl
com pn ny _ vc rlf lt'd h,y nn nffldnvU,~tntlng that :-
(~) dirrrto rs of thr
m ad e n ful l mq uir y int o the nm,iru, of th o co. mptiny and
tht'Y hnvc , . .d : ·.
l1') · ru1 op 11110 11
,, ·bt
lhu l either the co,nn, ,c'in y h'd.~ no uc
the y hn ve tm m e
. .11 b bl pa y its dc bl.~in fo ll from the pro ceed
s
o1~ that it wt e n _e to
lunlary liquidation; an d
ot assets to be sold m the vo
any per8on ;
(ii) the co mpany is no
t being liquidated to defra ud
llowing
cla ra tion sh al l be nccornpnnied with the fo
fb e de
(d documents, namely:- s
statements and record ~f bu sines
(i) Audited financial 'or for th e
for the previous 2 years
operations of the company er ; · ,
riod since its i~cor poration, whichever is lat
pe
ation of the assets of the
company, if any
A repo rt of the vaJu
· (ii)
luer;
prepared by a registered va
Directors there
ithin 4 we ek s of a de cJaration passed by the
(d) W
shall be :-
ion
Contributories' Resolut rs of the
sp ec ial re so lut ion of the contributories (membe
(i) a y to be
eting requiring the compan
company) in a general me lvency
and appointing inso
liquidated voluntarily
liquidator; or
professional to act _as the mpany) in
re so lut ion of co nt rib ut ories (members of the co
(ii) a uidated
ng the company to be liq
a general meeting requiri ion ,
ily as a re su lt of ex piry of the period of its durat
voluntar of any
an y, fix ed by its ar tic les or on the occur'rence
if that the
ich the articles provide
event in respect ·of wh ing
y sh all be dis so lve d, as the case may be, and appoint
compan
l to act as the liquidator:
an insolvency professiona red
th at thi s sp ec ial or or dinary resolution is refer
Please note y means a
Co nt rib ut or ies ' Re sol ution. Again, Contributor ble
to as a LL P and any other person lia
co mp an y, pa rtn er of
member of a the event
ibu te tow ard s the ass ets of the corporate person in
to contr
of its liquidation .
Creditors Approval creditors
if the co mp an y ow es any debt to any person, all
Ho wever,
hir ds in va lue of the debt of the company sh
representing tw o-t r special or
e the co nt rib ut or ies ' resolution passed (whethe
approv
17.32 Corporate Laws

ordinary as the case may be) within 7 days of such resolution. 1

The company shall notify the Registrar of Companies and the IBB1
about the resolution to liquidate the company within 7 days of such
resolution or the subsequent appl'oval by the credit~s, as the case may be.
Liquidation Commence1nent Date
Subj~ct to approval of the creditors, the voluntary liquidation proceedings
in respect of a company shall be deemed to have commenced from
the date of passing of the resolution, whether ordinary or special, as
the case may be. On and from the Liquidation Date, the corporate
person shall cease to carry on its business except as far as required
for the beneficial winding up of business.
Public Announcement by the Liquidator and Collation of Claims
The Liquidator shall make a public announcement in Form A of
Schedule I within 5 days from his appointment, calling upon operational
creditors, financial creditors, workmen, employees and any other stakeholders
of the corporate person to submit their claims within 30 days of the
liquidation commencement date. The announcement shall be published
in one English and one regional language newspaper, on the website
of the corporate person and on the website designed by the Board
(IBBI) for this purpose.
Then the liquidator shall prepare Preliminary Report about the capital
structure, estimates of assets and liabilities, proposed plan of action etc., and
submit the same to the corporate person within 45 days of the
Contributories' Resolution.
The liquidator is required to verify the daims within 30 days of the last date
of the receipt of claims. The liquidator may accept the claim or reject the
claim and prepare list of stakeholders on the basis of claims admitted
within 45 days from the last date of receipt of claims.
Primary Functions of the Liquidator
• To value, sell, recover and realize all assets of monies due to such
corporate persons in time bound manner.
• Opening bank account followed by the words "in voluntary
liquidation" in a scheduled bank, for the purpose of receiving all
moneys due to the corporate person.
• Distribution of proceeds to the stakeholders within 6 months of
receipts of the proceeds.
• To preserve a physical or electronic copy of the reports, registers
and books of account for at least 8 years after dissolution of the
corporate person, either with himself or an information utility.
 17.33
. ~UP
Nli''"'''g i' t
of Liquidation
I

,,.1011
I C•· l
11 pl all en de av or to complete tl1e II<Iulcution proce.~s of the
Cl•' uid ator sh
person within '12 mO11 tli s from th c I' ui·d8 t,Jon
.
f /lC1,q ,q
or at c nt date. In case liquidation IJrocc ,, co , . _.
nc ss nt mu es for more than
cor'P nccr ·d· . . · t
•c.1l s a u~ report m
't· .
. .cat,n g
• ,11111e •
s11all pr es en t an ·u111u d,
,o 111011'h1· S' •the • hq u1 ,1to1 l
, .-

I2 .• ,5 in 1Jquidc1 t10n.
progics
·ss oJution. . " I ha ve been comp1ete1y woun up
.d
f)I 1e co rpor at e pe rson ·
/) th e a1fa trs of t 1· . n shall be made by the
oncv mdate ~, a1~ ap pl ica tio
and its asse ts fully tq ssol ution along with a Fina
l Report
N C ~T _fo r its di
liquidator to th~ co un ts, sta tements demonstrating detai
ls
d hq m da ~e d ac
consisting of au ited an ne r of sa le, and statements that all
debt
an d the n- m
f the disposed assets ov ision s has been made incase of
any
d suf fic ie nt pr
ias been discharged an io n. Pu rsu ant to this application, by
the
nd ing litig at
adverse outcome of a pe ion and the entity
the NC LT sh all pass an order for dissolut
liquidator, e date of NCLT's orde
r.
dissolved from th
shall stand date
of di ssolut ion shall within 14 ·days from the
A copy of an order e Registrar of Companies with
which
ar de d to th
of such order, be forw
registered.
the corporate person is
RPORATE PERSON
VOLU NT AR Y LIQUIDATION OF A CO
STEPS FOR
UNDER IBC-2016
able
t the company will be
bmission of declaration to ROC, stating tha aration
Step I
Su raud any person [Decl
t being liquidated to def
to pay its due and is no
of Solvencyj. n (Contributories '
of spec ial res olu tion/ordinary resolutio
Passing uidation and
Step II ap pro vin g the pro posal of Voluntary Liq
Resolution) for declaration of solvenc
y.
intme nt of liqud ator, within 4 weeks of
appo ors
213rd majority credit
ate perso n ow es debts , approval of
If a corp or Contributor '
ies
req uired to be taken within 7 days of
would also be
Resolution. ims of all stakeholders,
un cem en t by Liquidator inviting cla
Publi c an no ll as on website
Step III his ap point me nt, in newspaper as we
within 5 da ys of e within 30 da ys
ask ing them to submit the sam
nd
of corporate person a
idatio n Commencement Date.
of the Liqu t the Contributories
'
ation to the RO C and the JBBI abou
Intim
Step IV days of its passing.
Resolution , wi thin 7 rt abo ut the capital structure, •
estimates
fp 1 J"m inary Repo
. re
.
etc ., and submi ssion. of,
Step V Preparation o . b'l 't' proposed plan of. act10n ntn
.
bu ton es
, of Co
of assets an d 1ia ies te person withm 45 days
11
ra
the same to a corpo
Resolution.
 17.34 ( 'nr/"Jl'Ofp I ow,

Strp YI Vcrlflcn11on of Clnlms wllhln 30 dny11 from fh e fo 11 1 1l11fe ror rerript

of clnlms nnrl Prcf>nntflon of ll11t of Sf nkcholtlcn1, within 4~ day11 1rr,rn
the last date of receipt of cluims.
Stl'p VII Opening of II bani< nccounf In the nnrne of the corporate pen,,n
followed b)' the words "in volunt11ry llc1uh.latlon", in a sched uled bank,
for receipt of all moneys due lo the corponile persons.
Step Vlll Sale of assets, recovery of moneys due lo the corporate persons,
realisation of uncalled capital or unpaid capital contribu tion.
Step IX Distribution of Proceeds from realisation within 6 months of receipt
to stakeholders and preserving physical or electronic copies of records,
registered and books of account for next 8 years.
Step X Submission of final report by the liquidatior to the corporate person
ROC and the IBBI and application to NCLT for dissolution. '
Step XI S~bmission of NCLT order of (Jissolution with ROC within 14 days
of receipt of Dissolution Order of NCLT.

TEST QUESTIONS ~~~~~~

I. (a) Explain 'Advisory Committee' which is constituted in case of Compulsory

Winding up.
(b) Explain winding up of a company on 'just and equitable' grounds.
[Delhi B.Com. (Hons.) Sem. II, CBCS 2018]
2. What is meant by inability to pay debts? Can a company be wound up on
this ground?
[Delhi B.Com. (Hons.) Sem. II, CBCS 2017]
3. Explain the grounds of compulsory winding up of a company.
[Delhi B.Com. (Hons.) 2017]
4. Write a note on compulsory winding up of a company?
[Delhi B.Com. (Hons.) Sem. II, CBCS 2016]
·5. Discuss the grounds and consequences of voluntary winding up of a
company.
[Delhi B.Com. (Hons.) Sem. II, CBCS 2016]
6. (a) When would it be just and equitable for a tribunal to wind up a
company? Discuss.
'(b) What are the grounds for voluntary winding up of a company?
[Delhi B.Com (Hons.) Sem. II, 2015]
7. (a) State the grounds and consequences of Voluntary Winding up.

(b) ~a~ is meant by 'Declaration of Solvency' in relation to voluntary

wm<lmg of a company? Explain. · ·

[Delhi B.Com (Hons.) Sem. ID, 2014]

r
iiJiPfUP l'/YI
~ . a short note on 'declaration of Hui vcncy' will1 ru l'
,/lflte ,
g. . ding-VP of a company. lllcll 11 ' crc11cu 111 c111n1111IN<1ry
win ' I l.~om (111111! ) N If 2
r1, t are the grounds for 'voluntarily w · , • 'cm, , ,01 21
9. ~ ,a llll1lll~•l i 11• 0· I' 11 wmpuny'I
•

1 llh,lhl ll.Com (llonH.) ZOJIJ

~ PRACTICAL PROBLEMH ~~~~~

· (a) siate the circumstances

compulsorily by the NCLT.under which a company
, may he wound up
1 - mg up o· a company'/
Who can file a petition in the NCLT for wi'nd ' f
(b) Delbi B.Com. (Hom,.) Scm. U, CBC8 20191
i There are only two members of a company, they are also the directors of the
colllPaDY· Both of them are not on speaking terms. Can the company be
wound-UP on this ground? Give reasons.
(Delhi B.Com. (Hons.) Sem. II, CBCS 2017]
[flint : Yes the company can be wound-up on the ground of just and
equitable by the Tribunal. Refer to (Re) Yenidge Tobacco Co.]
3. A creditor of a company applied for Winding-Up of the company for its
inability to pay its claims, after proper demand had been made by him. And
on the lapse of three weeks from the date of such demand, it was proved
to the satisfaction of the Tribunal that company was commercially solvent.

Discuss.
[Hint: The Tribunal can order the Winding-Up of the company on the
ground of inability to pay debts.]