Modes of Winding - Up (Section 270)
Modes of Winding - Up (Section 270)
Modes of Winding - Up (Section 270)
1. by the Tribunal; or
2. Voluntary.
A company may be wound up by the Tribunal on a petition filed under Section 272 of
the Act.
a) If the company has to pay the sum within twenty – one days after the receipt of
demand or to provide adequate security or re – structure or compound the debt to the
reasonable satisfaction of the creditor. The demand may be served:
i. A creditor by assignment or otherwise,
c) If it is proved to the satisfaction of the Tribunal that the company is unable to pay
its debt, and the Tribunal has taken into account the contingent and prospective
liabilities of the company while determining this.
a) The company;
d) All or any of the person in above clauses (a), (b) and (c) together;
e) The Registrar;
g) In case the company has acted against the interests of the sovereignty and
integrity of India, its security of the State, friendly relations with foreign States, public
order, decency or morality , by the Central Government or State Government.
iii. The company have no surplus assets left for distribution among
shareholders.
ii. have been held by him and registered in his name for at least six months
during the eighteen months immediately before commencement of the winding up, or
The Registrar shall not be entitle to present a petition for winding up on the grounds
specified in clauses (b), (d) or (g) of sub – section of Section 271. the Registrar shall
not present a petition on the ground that the company is unable to pay its debts unless
it appears to him either from the financial condition of the company as disclosed in its
balance sheet or from the report of an inspector appointed under section 210 that the
company is unable to pay its debts. The Registrar shall obtain the previous sanction of
the Central Government to the presentation of a petition. The Central Government
shall not accord its sanction unless the company has been given a reasonable
opportunity of making representations.
A petition presented by the company for winding up before the Tribunal shall be
admitted only if accompanied by a statement of affairs in such form and in such
manner as may be prescribed.
A copy of the petition made under this section shall also be filed with the Registrar
and the Registrar shall, without prejudice to any other provisions, submit his views to
the Tribunal within sixty days of receipt of such petition.
POWERS OF TRIBUNAL (SECTION 273):
The Tribunal, on receipt of a petition for winding up, may pass any of the following
orders, namely—
The Tribunal shall make the order within ninety days from the date of presentation of
the petition.
Before appointing a provisional liquidator, the Tribunal shall give notice to the
company and afford a reasonable opportunity to it to make its representations.
However, for special reasons to be recorded in writing, the Tribunal may dispense
with such notice.
The Tribunal shall not refuse to make a winding up order on the ground only that the
assets of the company have been mortgaged for an amount equal to or in excess of
those assets, or that the company has no assets.
Where a petition is presented on the ground that it is just and equitable that the
company should be wound up, 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 the other remedy.
Where a petition for winding up is filed before the Tribunal by any person other than
the company, the Tribunal shall, if satisfied that a prima facie case for winding up of
the company is made out, by an order direct the company to file its objections along
with a statement of its affairs within thirty days of the order.
The Tribunal may allow a further period of thirty days in a situation of contingency or
special circumstances.
The Tribunal may direct the petitioner to deposit such security for costs as it may
consider reasonable as a precondition to issue directions to the company.
A company, which fails to file the statement of affairs, shall forfeit the right to oppose
the petition and such directors and officers of the company as found responsible for
such non-compliance, shall be liable for punishment.
The directors and other officers of the company, in respect of which an order for
winding up is passed by the Tribunal, shall submit at the cost of the company, the
books of account of the company completed and audited up to the date of the order to
liquidator within a period of thirty days of such order.
If any director or officer of the company contravenes the provisions of this section,
the director or the officer of the company who is in default shall be punishable with
imprisonment for a term which may extend to six months or with fine which shall not
be less than twenty-five thousand rupees but which may extend to five lakh rupees, or
with both. The complaint may be filed in this behalf before the Special Court by
Registrar, provisional liquidator, Company Liquidator or any person authorised by the
Tribunal.