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Winding up by the
Tribunal
A D I T YA ( 1 4 0 1 0 3 0 0 8 ) | A R I H A N T ( 1 4 0 1 0 2 0 2 8 ) | AT I F ( 1 4 0 1 0 3 1 0 2 ) | S H R E YA N S ( 1 4 0 1 0 2 1 2 3 ) | YO J A N A ( 1 4 0 1 0 2 1 4 4 )

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What is NCLT?
National Company Law Tribunal is a Quasi Judicial body in
India that governs the companies in India.
It is established under Companies Act, 2013 and has
succeeded the Company Law Board.
Some of the important power of the courts like power to
sanction reduction of capital, power to approve schemes of
arrangement and Winding of Company will be taken up by
the tirbunal.
Tribunal will also carry out the totally new function of
restructuring of and other functions related to the sick
company.

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What is Winding Up?

Winding up of a company is the process whereby its life is ended and its property
administered for the benefit of its creditors and members. An administrator, called a
Liquidator, is appointed and he takes control of the company, collects its assets, pays its debts
and finally distributes any surplus among the members in accordance with their rights.
- Prof.
L.C.B. Gower
Modes of winding up (U/S 270)

Voluntary

Compulsorily by the Tribunal

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Circumstances : Winding up by the

tribunal
U/S 271

Special Resolution by the Company

Inability of the Company to pay debts

Company acting against the Sovereignty & Integrity of India

Default in delivering Statutory Report to the Registrar or in holding Statutory

meeting

Just and Equitable to wind up according to Tribunal

Default in filing financial statements or annual returns for any five consecutive years
or more

Order by Tribunal in case of a sick company

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Petition for Winding Up

U/s 272
Petition can be filed by:

Company itself

Creditors

Any contributory

All or any one of in the above clauses

Registrar

Person authorized by Central Government on its behalf

By the Central or State Government

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Documents to be filed

Petition for winding up

Statement of Affairs

Copy of the Winding up order

Advertisement affidavit

Report by official liquidator

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Process for Winding Up

Official liquidator to be appointed

Liquidator shall make an application to Tribunal for constitution of Winding Up Committee

Boards powers is transferred to official liquidator

Suits stayed

If aggrieved party unhappy with decision of NCLT, can file an appeal to NCLAT

After winding up of affairs of company, Liquidator applies to Tribunal for dissolution of

company

Intimation to Registrar of companies

Notification of order in official gazette

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Powers of the Tribunal

Regulation of conduct of affairs of the Company in future

Purchase of shares or interests of any members of the company

Appointment and removal of Company Liquidator

To stay winding up

To settle the list of contributories

To require delivery of property to the liquidator

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Powers of the Tribunal

To order payment into bank moneys due to the company

To order recovery of cost of winding up

To summon persons suspected of having the property of the company

To order public examination of promoters, directors etc.

To arrest an absconding contributory

To order the dissolution of the company

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Case : Kingfisher Airlines

Kingfisher Airlines had been reporting loss since it commenced operations in 2005.

It was declared a non performing asset by the 7 National banks, who were the investors
in the airlines.

Vendors associated with the airlines filed a winding up petition of the company in order
to retrieve their money.

BNP Paribas, filed a winding petition against United Breweries (Holdings) Ltd. for a claim
of INR 180 Cr. which was given under the corporate guarantee.

Winding up petition was accepted by the High Court of Karnataka on 19 th November

2013.

On 29th May, 2014, United Bank of India filed a petition for the winding up for a loan
amount of INR 336 Cr.

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Recommendation
Tribunals to come under the ambit of judicial system and not as independent bodies
so that the policy of separation of powers strictly adhered to.
Accelerate the process of winding up or revival of sick units, as deemed fit by the
tribunal.
There are 13 lakh companies registered out of which only 9 lakh are active
companies and 4 lakh companies need to be wound up but the way the winding up
procedure is currently complicated under the high court scheme that the companies
are not going for winding up.
Reducing the minimum age (currently 50 years) required to become the member of
Tribunal so that young people are encouraged to handle the judicial system.

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References
http://www.mca.gov.in/MinistryV2/companiesact.html
http://business.gov.in/closing_business/windingup_company.php
http://www.legalservicesindia.com/article/article/winding-up-of-a-company-131
9-1.html
http://thefirm.moneycontrol.com/story_page.php?autono=995874

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THANK YOU

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