The Companies Act, 1956
439. Provisions as to applications for winding up.
(1) An application to the 1[Tribunal] for the winding up of a company shall be by petition presented, subject to the provisions of this section,
(a)by the company; or
(b)by any creditor or creditors, including any contingent or prospective creditor or creditors; or
(c)by any contributory or contributories; or
(d)by all or any of the parties specified in clauses (a), (b) and (c), whether together or separately; or
(e)by the Registrar; or
(f)in a case falling under section 243, by any person authorised by the Central Government in that behalf.
2[(g)in a case falling under clause (h) of section 433, by the Central Government or a State Government.]
(2) A secured creditor, the holder of any debentures (including debenture stock), whether or not any trustee or trustees have been appointed in respect of such and other like debentures, and the trustee for the holders of debentures, shall be deemed to be creditors within the meaning of clause (b) of sub-section (1).
(3) A contributory shall be entitled to present a petition for winding up a company, notwithstanding that he may be the holder of fully paid-up shares, or that the company may have no assets at all or may have no surplus assets left for distribution among the share-holders after the satisfaction of its liabilities.
(4) A contributory shall not be entitled to present a petition for winding up a company unless
(a)either the number of members is reduced, in the case of a public company, below seven, and, in the case of a private company, below two; or
(b)the shares in respect of which he is a contributory, or some of them, either were originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months immediately before the commencement of the winding up, or have devolved on him through the death of a former holder.
(5) Except in the case where he is authorised in pursuance of clause (f) of sub-section (1), the Registrar shall be entitled to present a petition for winding up a company only on the grounds specified in 3[clauses (b), (c), (d), (e) 4[, (f) and (g)] of section 433:
Provided that the Registrar shall not present a petition on the ground specified in clause (e) aforesaid, unless it appears to him either from the financial condition of the company as disclosed in its balance-sheet or from the report of 5[a special auditor appointed under section 233A or an inspector] appointed under section 235 or 237, that the company is unable to pay its debts:
Provided further that the Registrar shall obtain the previous sanction of the Central Government to the presentation of the petition on any of the grounds aforesaid.
(6) The Central Government shall not accord its sanction in pursuance of the foregoing proviso, unless the company has first been afforded an opportunity of making its representations, if any.
(7) A petition for winding up a company on the ground specified in clause (b) of section 433 shall not be presented
(a)except by the Registrar or by a contributory; or
(b)before the expiration of fourteen days after the last day on which the statutory meeting referred to in clause (b) aforesaid ought to have been held.
(8) Before a petition for winding up a company presented by a contingent or prospective creditor is admitted, the leave of the 6[Tribunal] shall be obtained for the admission of the petition and such leave shall not be granted
(a)unless, in the opinion of the 6[Tribunal], there is a prima facie case for winding up the company; and
(b)until such security for costs has been given as the 6[Tribunal] thinks reasonable.
comments
(i) The right to apply for winding up of a company being a creature of statute, none other than those on whom the right to present a winding up petition is conferred by the statute can make an application for winding up of a company; National Textiles Workers’ Union v. P.R. Ramakrishnan, 1983 (53) Comp. Cas. 184: 1983 (1) Com LJ (SC) 1: AIR 1983 SC 759.
(ii) No statutory right is conferred on the workers to present a petition for winding up of a company, they therefore cannot prefer a winding up petition against a company; National Textiles Workers’ Union v. P.R. Ramakrishnan, 1983 (53) Comp. Cas. 184: 1983 (1) Com LJ (SC) 1: AIR 1983 SC 75.
(iii) A winding up order will not be made on a creditor’s petition if it would not benefit him or the company’s creditors generally; Madhu Sudan Gordhandas & Co. v. Madhu Woollen Industries Pvt. Ltd., 1972 (42) Comp. Cas. 125: AIR 1971 SC 2600.
(iv) A Court Receiver is a creditor within the meaning of section 439 (1) (b) of the Indian Companies Act and therefore, is competent to maintain the petition for winding up of the company; Harinagar Sugar Mills Co. Ltd. v. M.W. Pradhan (now G.V. Dalvi) Court Receiver, High Court, Bombay, 1966 (36) Comp. Cas. 426: 1966 (2) Com LJ 17: AIR 1966 SC 1707.
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1. Subs. by Act 11 of 2003, sec. 54, for “Court”.
2. Subs. by Act 11 of 2003, sec. 54.
3. Subs. by Act 65 of 1960, sec. 162, for “clauses (b), (c) and (e)” (w.e.f. 28-12-1960).
4. Subs. by Act 11 of 2003, sec. 54, for “and (f)”.
5. Subs. by Act 65 of 1960, sec. 162, for “an inspector” (w.e.f. 28-12-1960).
6. Subs. by Act 11 of 2003, sec. 54, for “Court”.
