1.

Dealt with by

• Co Act 2013
• IBC Code

2.

Cases dealt with under IBC

• voluntary winding up
• winding up by NCLT on the grounds of inability to pay debts

Hitherto winding-up of a Co was being dealt with by NCLT Rules. Now The Companies (Winding up) Rules 2020 have been notified on 24-Jan-2020, to be effective from 1-Apr-2020. The said rules, inter alia, specify the detailed procedural aspects in case of winding up of companies under the Companies Act (similar to those which were prescribed as a part of the Companies (Court) Rules 1959 under the erstwhile Co Act 1956).

3.

Applicability of the Co (Winding up) Rules 2020 [Ss.271 & 361, R.190(2)]

• winding up for the circumstances mentioned u/s 271
  • If resolved by Spl Reso by the Co to wind up
  • If the Co has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality
  • if on an application made by RoC / any other person authorised by CG by notification under Co Act, NCLT is of the opinion that:
    • the affairs of the Co have been conducted in a fraudulent manner, or
    • the Co was formed for fraudulent and unlawful purpose, or
    • the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith

    and that it is proper that the Co be wound up

  • if the Co has made a default in filing with the RoC its FSs / ARs for immediately preceding 5 consecutive FYs
  • if NCLT is of the opinion that it is just and equitable that the Co should be wound up
• Summary procedure for liquidation u/s 361
  • where the Co to be wound up has assets of book value not > ₹ 1 crore
  • the Co which has taken deposit and total o/s deposits is not > ₹ 25 lakh; or
  • the Co of which the total o/s loan including secured loan does not > ₹ 50 lakh; or
  • the Co of which turnover is upto ₹ 50 crore; or
  • the Co of which paid up capital does not > ₹ 1 crore

4.

the Co (Winding up) Rules 2020, inter alia, deal with

• filing and audit of the Company Liquidator’s accounts and its procedure (R. 91 to 99)
• disposing of assets (R. 165 to 167)
• process for meeting of creditors and contributories of the Co
• all the money lying in the bank account of the Co Liquidator which is not immediately required for the purposes of winding up, to be invested in government securities or in interest bearing deposits in any scheduled bank
• procedure for creditors to prove their debts and claims against the Co