If a contributory is adjudged insolvent, either before or after he has been placed on the list of contributories,-
(a) His assignees in insolvency shall represent him for all the purposes of the winding up, and shall be contributories accordingly, and may be called on to admit to proof against the estate of the insolvent, or otherwise to allow to be paid out of his assets in due course of law, any money due from the insolvent in respect of his liability to contribute to the assets of the company; and
(b) There may be proved against the estate of the insolvent the estimated value of his liability to future calls as well as calls already made.
If a body corporate which is a contributory is ordered to be wound up, either before or after it has been placed on the list of contributories,-
(a) The liquidator of the body corporate shall represent it for all the purposes of the winding up of the company and shall be a contributory accordingly, and may be called on to admit to proof against the assets of the body corporate, or otherwise to allow to be paid out of its assets in due course of law, any money due from the body corporate in respect of its liability to contribute to the assets of the company; and
(b) There may be proved against the assets of the body corporate the estimated value of its liability to future calls as well as calls already made.
441E - Power to call for information
The Central Government or Tribunal may require any company to furnish for the purposes of rehabilitation or revival or protection of assets of sick industrial companies, such statistical and other information in such form and within such period as may be prescribed.
441F - Penalty for non-payment of cess
(1) If any cess payable by a company under section 441A is not paid in accordance with the provisions of that section, it shall be deemed to be in arrears and the same shall be recovered by the Tribunal in such manner as may be prescribed.
(2) The Tribunal may, after such inquiry as it deems fit, impose on the company, which is in arrears under sub-section (1), a penalty not exceeding ten times the amount in arrears:- Provided that before imposing such penalty, such company shall be given a reasonable opportunity of being heard, and if, after such hearing, the Tribunal is satisfied that the default was for any good and sufficient reason, no penalty shall be imposed under this sub-section.
441G - Refund of fund in certain cases
(1) Where the fund has been applied by the Tribunal for any of the purposes specified in clauses (a) to (d) of section 441D, such amount of fund shall be recovered from the company after its revival or rehabilitation or out of sale proceeds of its assets after discharging the statutory liabilities and payment of dues to creditors.
(2) The amount referred to in sub-section (7) shall be recovered in the manner as the Tribunal may direct.]
[Repealed by the Companies (Second Amendment) Act, 2002, Section 59.]
(1) On hearing a winding up petition, the Tribunal may-
(a) Dismiss it, with or without costs; or
(b) Adjourn the hearing conditionally or unconditionally; or
(c) Make any interim order that it thinks fit; or
(d) Make an order for winding up the company with or without costs, or any other order that it thinks fit:-
Provided that the Tribunal shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.
(2) Where the 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 that other remedy.
(3) Where the petition is presented on the ground of default in delivering the statutory report to the Registrar, or in holding the statutory meeting, the Tribunal may-
(a) Instead of making a winding up order, direct that the statutory report shall be delivered or that a meeting shall be held; and
(b) Order the costs to be paid by any persons who, in the opinion of the Tribunal, are responsible for the default.]
Where the Tribunal makes an order for the winding up of the company, the Tribunal, shall within a period not exceeding two weeks from the date of passing of the order, cause intimation thereof to be sent to the Official Liquidator and the Registrar.
(1) On the making of a winding up order, it shall be the duty of the petitioner in the winding up proceedings and of the company to file with the Registrar a certified copy of the order, within1*[thirty days] from the date of the making of the order.
If default is made in complying with the foregoing provision, the petitioner, or as the case may require, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to2*[one thousand rupees] for each day during which the default continues.
3*[(1A) In computing the period of1*[thirty days] from the date of the making of a winding up order under sub-section (1) the time requisite for obtaining a certified copy of the order shall be excluded.]
(2) On the filing of a certified copy of the winding up order, the Registrar shall make a minute thereof in his books relating to the company, and shall notify in the Official Gazette that such an order has been made.
(3) Such order shall be deemed to be notice of discharge to the officers and employees of the company, except when the business of the company is continued.
(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the 1*[Tribunal] and subject to such terms as the 1*[Tribunal] may impose.
2*[(2) 3*[Tribunal] shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of-
(a) Any suit or proceeding by or against the company;
(b) Any claim made by or against the company (including claims by or against any of its branches in India);
(c) Any application made under section 391 by or in respect of the company;
(d) Any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or rise in course of the winding up of the company; whether such suit or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960).]
5*[(4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.]
446A -6* Responsibility of directors and officers to submit to Tribunal audited books and accounts
The directors and other officers of every company shall ensure that books of account of the company are completed and audited up to date of winding up order made by the Tribunal and submitted to it at the cost of the company, failing which such directors and officers shall be liable for punishment for a term not exceeding one year and fine for an amount not exceeding one lakh rupees.
An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if it has been made on the joint petition, of a creditor and of a contributory.
(1) For the purposes of this Act, so far as it relates to the winding up of a company by the Tribunal, there shall be an Official Liquidator who-
(a) May be appointed from a pane l of professional firms of chartered accountants, advocates, company secretaries, costs and works accountants or firms having a combination of these professions, which the Central Government shall constitute for the Tribunal; or
(b) May be a body corporate consisting of such professionals as may be approved by the Central Government from time to time; or
(c) May be a whole-time or a part-time officer appointed by the Central Government:- Provided that, before appointing the Official Liquidator, the Tribunal may give due regard to the views or opinion of the secured creditors and workmen.
(2) The terms and conditions for the appointment of the Official Liquidator and the remuneration payable to him shall be-
(a) Approved by the Tribunal for those appointed under clauses (a) and (b) of sub-section (1), subject to a maximum remuneration of five per cent, of the value of debt recovered and realisation of sale of assets;
(b) Approved by the Central Government for those appointed under clause (c) of sub-section ( 1 ) in accordance with the rules made by it in this behalf.
(3) Where the Official Liquidator is an officer appointed by the Central Government under clause (c) of sub-section (1), the Central Government may also appoint, if considered necessary, one or more Deputy Official Liquidators or Assistant Official Liquidators to assist the Official Liquidator in the discharge of his functions, and the terms and conditions for the appointment of such Official Liquidators and the remuneration payable to them shall also be in accordance with the rules made by the Central Government.
(4) All references to the "Official Liquidator" in this Act shall be construed as reference to the Official Liquidator specified in sub-section (1), or to the Deputy Official Liquidator or Assistant Official Liquidator referred to in sub-section (3), as the case may be.
(5) The amount of the remuneration payable shall-
(a) Form part of the winding up order made by the Tribunal;
(b) Be treated as first charge on the realisation of the assets and be paid to the Official Liquidator or to the Central Government, as the case may be.
(6) The Official Liquidator shall conduct proceedings in the winding up of a company and perform such duties in reference thereto as the Tribunal may specify in this behalf: Provided that the Tribunal may -
(a) Transfer the work assigned from one Official Liquidator to another Official Liquidator for the reasons to be recorded in writing;
(b) Remove the Official Liquidator on sufficient cause being shown;
(c) Proceed against the Official Liquidator for professional misconduct.]
On a winding up order being made in respect of a company, the Official Liquidator shall, by virtue of his office, become the liquidator of the company.
(1) At any time after the presentation of a winding up petition and before the making of a winding up order, the1[Tribunal] may appoint the Official Liquidator to be liquidator provisionally.
(2) Before appointing a provisional Liquidator, the 1*[Tribunal] shall give notice to the company and give a reasonable opportunity to it to make its representations, if any, unless, for special reasons to be recorded in writing, the1*[Tribunal] thinks fit to dispense with such notice.
(3) Where a provisional liquidator is appointed by the1*[Tribunal], the1*[Tribunal] may limit and restrict his powers by the order appointing him or by a subsequent order, but otherwise he shall have the same powers as a liquidator.
(4) The Official Liquidator shall cease to hold office as provisional liquidator, and shall become the liquidator, of the company, on a winding up order being made.
This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Persons accessing this site are encouraged to seek independent counsel for advice in India abroad regarding their individual legal, civil criminal issues or consult one of the experts online.