Winding up subject to supervision of court, is different from "Winding up by court".
Here the court only supervise the winding up procedure. Resolution for winding up, is passed by members in the general meeting. It is only for some specific reasons, that court may supervise the winding up proceedings. The court may put up some special terms and conditions also.
However, liberty is granted to creditors, contributories or other to apply to court for some relief. (522)
- The court may also appoint liquidators, in addition to already appointed, or remove any such liquidator. The court may also appoint the official liquidator, as a liquidator to fill up the vacancy.
- Liquidator is entitled to do all such things and acts, as he thinks best in the interest of company. He shall enjoy the same powers, as if the company is being wound-up voluntarily.
- The court also may exercise powers to enforce calls made by the liquidators, and such other powers, as if an order has been made for winding up the company altogether by court. (526)
PRIORITY INDISPOSING LIABILITIES [529 A & 530]
When the company is wound up, by any mode, the liabilities shall be discharged in following priority.
- Workman's dues.
- Debts due to secured creditors, in case of insolvency.
- All ---------, taxes, cesses and rates due from the company to the central government or a state govt.
- All wages and salary of any employee due within four months.
- All -------- holiday remuneration becoming payable to any employee.
· All such debts shall be paid in full. If assets are insufficient to meet them, they shall abate in equal proportions.
MONEY RECEIVED BY LIQUIDATOR : (553)
Apart from an official liquidator, every liquidator appointed by company or court to carry on the winding up procedure, shall deposit the money is received by him in a scheduled bank, to the credit of a special banking account opened by him.
WINDING UP (CONTD.)
Apart from a normal company, registered under the companies Act, 1956 there are other companies as well winding up procedure for these companies are bit different from a company registered under companies Act.
These companies are:
UNREGISTERED COMPANIES : (583)
In simple words, an unregistered company, is a company which is not registered or covered under provisions of companies Act. 1956 (582)
- An unregistered company, cannot be wound up voluntarily, or, subject to super vision of court.
- However, the circumstances, in which unregistered company may be wound up, are as follows :
- If the company, is dissolved, or has ceased to carry on business, or is carrying on business only for the purposes of winding up, it's affairs,
- If the company is unable to pay it's debt
- If the court is of opinion, that it is just and equitable, that the company, should be wound up.
- A creditor, contributory, or company itself by filing a petition, or any person authorised by central government may institute winding up proceedings.
- In respect to other aspects, the same provisions and procedure shall follow, as in winding up of registered company.
- A foreign company, carrying on business in India, which has been dissolved, may be wound up, as unregistered company.
FOREIGN COMPANY (584)
A foreign company, is a company which is incorporated outside India, and having a place of business in India.
Winding up of such companies is only limited to the extent of it's assets in India. In respect of assets and business carried outside India, Indian courts has no jurisdiction.
Winding up of a foreign company can only be made through court.
Even if the company had been dissolved or ceased to exist in the country of it's incorporation, winding up order in this country can be made.
Even if a foreign company has been wound up according to foreign law, the courts in India still protect the Indian Creditors. The surplus assets, after paying the creditors, should be distributed among the share holders equally in the same proportion, as the assets ---- to the total issued and paid up capital.
Pendency of a foreign liquidation does not affect the jurisdiction to make winding up order. The Assets can be of any nature and do not take to be in the ownership of the company and can come from any Source [(1944) 2 All.E.R. 556]
As, for persons claiming to be creditors, their presence, itself is sufficient. It is not required to be shown, that company carried on business operations from any place of business in India.
A Govt. company, means a company, in which 51% or more of, shares are held by a govt. company.
Winding up procedure for a government company registered under the companies Act, 1956, is nearly similar to normal winding up procedure.
However, courts, take interest of public into consideration, and priority is given to them, as a govt. company is main function is to provide services to public.