Page 337 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes
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Caution The petition on the ground of default in delivering the statutory report or holding
the statutory meeting cannot be presented before the expiration of 14 days after the last
day on which the statutory meeting ought to have been held. In any case, the Registrar
cannot present the petition unless sanctioned by the Central Government.
The Central Government shall not grant the permission to the registrar unless the company
has been given the opportunity of making its representation against the petition of the
registrar for winding up.
5. Central government petition (s.243): The Central Government may petition for winding
up where it appears from the report of inspectors appointed to investigate the affairs of a
company under s.237 that, the business of the company has been conducted for fraudulent
or unlawful purposes. The Government may authorise any person to act on its behalf for
the purpose. [s.439 (1) (b)].
6. Official liquidator’s petition (s.440): An official liquidator may present a petition for
winding up by the court where a company is being wound up voluntarily. The court,
however, shall not make a winding up order unless it is satisfied that, the voluntary
winding up cannot be continued with due regard to the interest of the creditors or
contributories or both.

7. Company’s workers union Petition: Section 439 does not give a right to workers or their
union, as such, to file a petition for winding up. However, if a winding up petition is
properly filed by those who are entitled to do so under s. 439, the workers may appear and
be heard in support of or in opposition to the winding up petition [National Textiles
Workers Union V. R. P. Ramakrishnan (1983)53 Comp Cas 184].
Commencement of winding up (s.441): The winding up of a company by the court shall be
deemed to commence at the time of the presentation of the petition for the winding up. If no
order for winding up is made and the winding up petition is dismissed, the date of presentation
of the winding up petition has no relevance. As such, until winding up order is made, the
company will have to comply with the requirements of the Companies Act, as are required if the
company was not wound up. Also the words ‘shall be deemed to commence’ indicate that
although the winding up of a company does not in fact commence at the time of the presentation
of the petition, it nevertheless shall be taken to commence from that time if and when the
winding up order is made. However, where before the presentation of a petition for the winding
up of a company by the court, a resolution has been passed by the company for voluntary
winding up, the winding up of the company is deemed to have commenced at the time of the
passing of the resolution.
Arrangement when binding on company and creditors (s. 517): During the liquidation
proceedings, a company can enter into a scheme of arrangement with its creditors. The scheme
will be binding on the company and its creditors provided:
(a) It has been approved by a special resolution of the company, and
(b) Agreed to by three-fourths in number and value of the creditors.
Any creditor or contributory may, however, within three weeks from the completion of the
arrangement, appeal to the court. The court may amend, vary, confirm or set aside the
arrangement.

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