The Ministry of Corporate Affairs (‘MCA’) vide notification dated 24 January 2020, has notified the Companies (Winding Up) Rules, 2020 (‘The Rules’). The Rules are applicable to companies going into “winding up for the circumstances mentioned u/s 271” as well as “Summary procedure for liquidation u/s 361” of Companies Act, 2013. The Rules comprise of 191 rules and 95 forms and shall become applicable from 1st April 2020.
The notification allows certain class of companies to close their business by making a winding up application to Central Government without having to go to National Company Law Tribunal (‘Tribunal’).
Articles summarizes Companies (Winding Up) Rules, 2020 and explains about Winding up by Tribunal, Liquidator, Winding up Order, Application for Stay of Suits etc. On Winding Up Order, Reports by Company Liquidator under Section 281, Settlement of List Of Contributories, Advisory Committee, Meetings Of Creditors And Contributories, Proxies In Relation To Meetings Of Creditors And Contributories, Registers And Books Of Account To Be Maintained By Company Liquidator, Banking Account Of Company Liquidator, Investment Of Surplus Funds, Filing And Audit Of Company Liquidator’s Account, Debts And Claims Against Company, Collection And Distribution Of Assets In Winding Up By Tribunal, Calls In Winding Up By Tribunal, Examination Under Sections 299 (Power To Summon Persons Suspected Of Having Property of The Company Etc.) and 300 (Power To Order Examination Of Promoters, Directors, Etc.), Application Against Delinquent Directors, Promoters And Officers Of The Company, Sale By Company Liquidator, Dividends And Returns Of Capital In Winding Up By Tribunal, Termination Of Winding Up, Payment Of Unclaimed Dividends Or Undistributed Assets Into The Company Liquidation Dividend And Undistributed Assets Account In A Winding Up And Summary Procedure For Liquidation.
| WINDING UP BY TRIBUNAL | |
| Petition for Winding Up | > Petition under Section 272 (1) shall be presented in the Form WIN 1 or WIN 2, as case may be in triplicate.
> Petition shall be verified by an affidavit in form WIN 3. |
| Statement of Affairs | > To be filed in Form WIN 4 containing the information upto the date which shall not be more than thirty days prior to the date of filling the petition or filling the objection as applicable. The same to be filed in duplicate.
> Filed with duly verified affidavit and affidavit for concurrence of the statement of affairs in WIN 5. |
| Admission of Petition and direction as to Advertisement | > Upon filing of Petition, it shall be posted before the Tribunal for admission, fixing date for hearing thereof and directions as to advertisements to be published and the persons, if any, on whom the petition are to be served.
> Where petition is filed by person other than Company, Tribunal may, if it thinks fit, direct notice to be given to the Company for opportunity of being heard before giving directions as to the advertisement of the petition, if any, and the petitioner shall bear all costs of the advertisement. |
| Copy of the Petition to be furnished | > To provide with the copy of the Petition within 24 hours on payment of Rs. 5 per page on request by contributory. |
| Advertisement of Petition | > Subject to any directions of Tribunal, the advertisement to be published atleast 14 days before the date of hearing.
> To be published in Any daily newspaper English and vernacular language widely circulated in the State or Union territory in which the registered office of the company is situated. > Form WIN 6 |
| Application for leave to withdraw petition | > A petition for winding up shall not be withdrawn after presentation without the leave of the Tribunal subject to compliance with any order of the Tribunal, including as to costs.
> An application for leave to withdraw a petition for winding up which has been advertised in accordance with the provisions of rule 7 shall not be heard at any time before the date fixed in the advertisement for the hearing of the petition. |
| Affidavit in Objection | > Affidavit in objection to the Petition under Section 272 (1) shall be filed within 30 days from the date of order, and copy of the same shall be served on the petitioner or his authorised representative forthwith and copies of the affidavit shall also be given to any contributory appearing in support of the petition who may require the same on payment of Rs. 5per page within 3 working days. |
| Affidavit in Reply | > To be filed not less than 7 days before the date of hearing of the Petition and copy if the same to be served on the day of filing. |
| LIQUIDATOR | |
| Appointment of Provisional Liquidator (PL) or Company Liquidator (CL ) | > After admission of the Petition by the Tribunal and upon proof by affidavit of sufficient grounds for the appointment of provisional liquidator, the Tribunal, if it thinks fit , upon such terms and conditions may appoint a PL, pending final orders on the petition in pursuance of Section 273(1)(C ).
> And where the Company is not the applicant, notice of the application for appointment of PL in Form WIN 7 and Company shall be given reasonable opportunity to make its representation unless Tribunal, for reasons recorded in writing dispenses with such notice. > The order for appointing the PL shall be given in form WIN 8. > An order appointing PL shall also state that it will be duty of every person who is in possession of any property books or papers, cash or any other assets of the company, including the benefits derived therefrom, to surrender forthwith such property, books or papers, cash or other assets and the benefits so derived, as the case may be, to the PL. > Where under Section 277 (1) order for appointment of PL / CL has been made, the Registrar shall within 7 days from the date of passing of order send intimation to CL / PL in Form WIN 9 by registered post or speed post or by courier service or by electronic means. > Copy of order of appointment of CL / PL shall also be sent to ROC together with a copy of the Petition and the affidavit, if any, filed in support thereof. > PL / CL within 7 days from the date of appointment shall in Form WIN 10 file declaration disclosing conflict of interest or lack of independence in respect of his appointment. > The PL / CL as the case may be shall be appointed by the Tribunal from amongst the insolvency professionals registered under IBC, 2016 unless the official liquidator is appointed. |
| Costs, etc., of provisional liquidator | > Subject to any order of the Tribunal, all the costs, charges and expenses incurred by the provisional liquidator shall be paid out of the assets of the company and if the company does not have sufficient assets or any assets to pay the costs, charges and expenses, the Tribunal may make appropriate orders in this regard. |
| WINDING UP ORDER | |
| Order to be sent to liquidator and form of order | > For purposes of Section 277(1) the Order for winding up shall be in Form WIN 11.
> Within 7 days from date of receipt of order by registrar shall be sent to CL in Form WIN 12 accompanied by the copy of Petition and Affidavits if any, filed in support thereof if not already sent at the time of appointment of the provisional liquidator. >Within 7 days from date of receipt of order by registrar shall be sent to ROC in Form WIN 13. > The CL shall cause a sealed copy of the order to be served on the Company as per Section 20. > A copy of the order to be filed to ROC in form INC 28 by the Liquidator within 30 days of receipt of Order from Tribunal. |
| Contents of Winding Up Order | > Duty of such of the persons as to liable to submit the books of account of the Company completed and audited upto the date of order.
> To attend on the CL at required time and place and give him all the information. > Duty of every person who is in possession of any property, books or papers, cash or any other assets of the company, including the benefits derived therefrom, to surrender forthwith such property, books or papers, cash or other assets and the benefits so derived , as the case may be, to the CL. |
| Directions on making winding up Order | > At the time of making the Winding Up order or at any point of time thereafter, the Tribunal shall give directions to the Petitioner as to advertisement of the Order and the persons, if any, on whom the Order shall be served and the persons , if any, to whom notice shall be given of the further proceedings , in the liquidation , and such further directions as may be necessary. |
| Advertisement of Order | >Save otherwise ordered by the Tribunal, within 14 days of the date of order be advertised by the Petitioner in a newspaper in the English language and a newspaper in vernacular language widely circulating in the State orcthe Union territory where the registered office of the company is situated and shall be served by the petitioner upon such person, if any, and in such manner as the Tribunal may direct.
> Advertisement shall be in Form WIN 14. |
| Company Liquidator to take charge of assets and books and papers of company | > On order of Winding Up CL shall forthwith take into his custody or under his control all the properties and effects, actionable claims and the books and papers of the company. |
| Form of proceedings after winding up order is made | > After a winding up order is made or a provisional liquidator is appointed, every subsequent proceeding in the winding up shall bear the original number of the winding up petition besides its own distinctive number, but against the name of the company in the cause-title, the words “in liquidation” or “in provisional liquidation” as the case may be, shall appear in brackets. |
| APPLICATION FOR STAY OF SUITS ETC. ON WINDING UP ORDER | |
| Application for leave to commence or continue suit or proceeding | > An application under Section 279(1) for leave of the Tribunal to commence or continue any suit or other legal proceeding by or against the company shall be made in Form WIN 15 upon notice to the Company Liquidator and the parties to the suit or proceeding sought to be commenced or continued. |
| REPORTS BY COMPANY LIQUIDATOR UNDER SECTION 281 | |
| Report by Company Liquidator | > Report to be submitted under Section 281(1) shall be in Form WIN 16.
> The Tribunal shall, within 7 days from the receipt of such report, fix a date for the consideration thereof by the Tribunal and notify the date on the notice board of the Tribunal and to the Company Liquidator. |
| Inspection of statement of affairs and report | > Every creditor or contributory, by himself, or by his agent, shall be entitled to inspect the statement of affairs submitted under Section 272(4) or Section 272(1) and the report of the CL submitted under Rule 25(1) on payment of Rs 1000 and to obtain copies thereof or extracts therefrom on payment of a fee of Rs. 5 per page. |
| Consideration of report by Tribunal | >The consideration of the report made by CL shall be placed before the Tribunal. |
| SETTLEMENT OF LIST OF CONTRIBUTORIES | |
| Provisional list of contributories | > CL shall file in the Tribunal within 21 days after the date of the winding up order a provisional list of contributories of the company with their names and addresses, the number of shares or the extent of interest to be attributed to each contributory, the amount called up and the amount paid up in respect of such shares or interest, and distinguishing in such list the several classes of contributories unless the same is dispensed with.
> The list shall consist of every person who was a member of the company at the commencement of the winding up or his representative, and shall be divided into two parts, the first part consisting of those who are contributories in their own right, and the second part, of those who are contributories as being representatives of, or liable for the debts of others, as required under Section 281(1) and list shall be in Form WIN 17. |
| Notice to be given of date of settlement | > Upon filing Provisional list of Contributories, CL shall obtain a date from the Tribunal for settlement and shall give notice of the date appointed to every person included in the list and informing such person by such notice that if he intends to object to his being settled as a contributory in such character and for such number of shares or interest as mentioned in the list, he should file in Tribunal his affidavit in support of his contention and serve a copy of the same on the CL not less than 2 days before the date fixed for the settlement, and appear before Tribunal on appointed date for settlement in person or by authorised representative and such notice shall be in Form WIN 18 and sent in the mode set out in Section 20 and should reach them not less than 14 days before the date of settlement.
> The person who posted the notice shall swear by an affidavit in Form WIN 19 relating to the dispatch thereof, and file the same in the Tribunal not later than 2 days before the date fixed for the settlement of the list. |
| Settlement of List | > Aforesaid list when settled shall be certified by the Tribunal under its seal and shall be in Form WIN 20 |
| Notice of Settlement to Contributories | > Upon receipt of certified by the Tribunal, the CL shall with 7 days issue notice shall inform such person that any application for the removal of his name from the aforesaid list or for a variation of the said list, must be made to the Tribunal within 15 days from the date of service on the contributory of such notice .
> Notice shall be in Form WIN 21 and to be sent through pre paid registered post or speed post. > An affidavit of service relating to dispatch shall be filed in Tribunal within 7 days of the said dispatch in Form WIN 22. |
| Supplemental list of Contributories | > The Tribunal may add to the list of contributories by a supplemental list or lists and any such addition shall be made in the same manner in all respects as the settlement of the original list. |
| Variation of List | > the list of contributories shall not be varied, and no person settled on the list as a contributory shall be removed from the list, or his liability in any way varied, except by order of the Tribunal and in accordance with such order. |
| Application for rectification of list | > If after the settlement of the list of contributories, the Company Liquidator has reason to believe that a contributory who had been included in the provisional list has been improperly or by mistake excluded or omitted from the list of contributories as finally settled or that the character in which or the number of shares or extent of interest for which he has been included in the list as finally settled or any other particular contained therein, requires rectification in any respect, he may, upon notice to the contributory concerned, apply to the Tribunal for such rectification of the list as may be necessary, and the Tribunal may on such application, rectify or vary the list as it may think fit. |
| List of contributories consisting of past members | > unless so ordered by the Tribunal and where an order is made for settling a list of contributories consisting of the past members of a company, the provisions of these rules shall apply to the settlement of such list in the same manner as they apply to the settlement of the list of contributories consisting of the present members. |
| ADVISORY COMMITTEE | |
| Meeting of creditors and contributories | > As per Section 287(3) the meeting of creditors and contributories to determine the persons who may be the members of the Advisory Committee, shall be convened, held and conducted in the manner hereinafter provided in these rules for the holding and conducting of meeting of creditors and contributories |
| Company Liquidator to report result of meeting | > Within 7 days after holding of meeting, the CL shall report the results thereof to Tribunal in Form WIN 23.
> Where the creditors and contributories have agreed upon the constitution and composition of the advisory committee and the persons who are to be members thereof, an advisory committee shall, subject to the provisions of Section 287(2) be constituted in accordance with such decision, and the Company Liquidator shall set out in his report the names of the members of the committee so constituted. > When the composition of advisory committee is not agreed upon the CL shall at the time of making report will apply to Tribunal for directions for composition, and thereupon fix a date for consideration of report of CL and notice of the date fixed shall be advertised not less than 7 days before the date fixed, and advertisement shall be in Form WIN 24. |
| Filling up of vacancy in advisory committee | > On vacancy occurring the CL shall forthwith summon a meeting of creditors and contributories, to recommend the for filling the vacancy and the meeting may, by resolution, recommend for reappointing the same, or propose for appointing another creditor or contributory, as the case may to fill the vacancy. Provided that the CL is of opinion that it is unnecessary for the vacancy to be filled, may apply to Tribunal and may make an order not to fill vacancy or shall not be filled except in such circumstances as may be specified in the order.
> The continuing members of the advisory committee, if not less than two, may act notwithstanding any vacancy in the said committee. > Where the creditors or contributories, as the case may be, fail to fill the vacancy for whatever reason, the Company Liquidator shall forthwith report such failure to the Tribunal and Tribunal may, by order, fill such vacancy. |
| CL and members Advisory Committee dealing with Company’s Assets | > Neither CL or members of Advisory Committee shall, either directly or indirectly, by himself or through his employer, partner, clerk, agent, servant, or relative, become purchaser of any part of the company’s assets, except by leave of the Tribunal. |
| Advisory committee not to make profit | > No member of the advisory committee shall, except under the order of the Tribunal, directly or indirectly, by himself or through his employer, partner, clerk, agent, servant or relative, be entitled to derive any profit from any transaction arising out of the winding up or to receive out of the assets any payment for services rendered by him in connection with the administration of the assets, or for any goods supplied by him to the Company Liquidator for or on account of the company and where any profit or payment has been made contrary to the provisions of this rule, such payment shall be disallowed or the profit shall be recovered, as the case may be, on the audit of the such liquidator’s accounts or otherwise. |
| Cost of obtaining order of Tribunal | > In any case in which an order of the Tribunal is obtained under rule 39 (CL and members Advisory Committee dealing with Company’s Assets) or rule 40 (Advisory Committee not to make profit), the costs of obtaining such order shall be borne by the person in whose interest such order is obtained and shall not be payable out of the companies’ assets. |
| Order sanctioning payment to advisory committee
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> the order of the Tribunal shall specify the nature of the services, and such order shall only be given where the service performed is of a special nature, and except by the express order of the Tribunal, no remuneration shall be paid to a member of the advisory committee for services rendered by him in the discharge of the duties attached to his office as a member of such committee. |
| Meetings of advisory committee | > The advisory committee shall meet at such times as it may from time to time appoint and the CL or one-third of the total number of members of the said committee may also call a meeting of that committee as and when they think necessary.
> Quorum shall be one third of the total members or two, whichever is higher. > Committee may act by a majority of its members present. > A member of the Committee may resign by notice in writing delivered to CL. > If a member of the advisory committee is adjudged as an insolvent, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the said committee without the leave of those members who, together with himself, represent the creditors or contributories, as the case may be, his office shall become vacant. > A member of the Committee may be removed subject to the directions of Tribunal at the meeting by an ordinary resolution of which 7 days notice has been given stating the object of the meeting. |
| MEETINGS OF CREDITORS AND CONTRIBUTORIES | |
| Application of rules of meeting | > Subject to any directions given by the Tribunal, rules as hereinafter set out shall apply to meetings of creditors and contributories as may be convened in pursuance of Section 287(3) and Section 292(3). |
| Notice of meeting | > Notice to be sent atleast14 days before the date of meeting through registered post or speed post or by electronic means.
> Provided where number of creditors or contributories, exceeds 500, the CL shall give 14 days notice of the time and place of the meeting by advertisement in one daily English newspaper and one daily newspaper in principal language. > The notice to each creditor shall be sent to the address given in his proof as referred to in rule 101 or, if he has not so proved, to the address given in the statement of affairs, or, as given in the books of the company, or as may be known to the person summoning the meeting, and the notice to each contributory shall be sent to the address mentioned in the books of the company as the address of such contributory or to such other address as may be known to the person summoning the meeting. > Notice shall be in Form WIN 25 to 29 as may be applicable. |
| Place and Time of meeting | > Shall be held at such time and place as CL considers convenient for the majority of Creditors or contributories. |
| Notice of first or other meeting to officers of company | > CL shall give notice in Form WIN 30 before 14 days of the date of meeting to each of the officers of the Company, who in his opinion ought to attend the meeting. Notice can be hand delivered / Registered Post/ Speed Post/ Electronic means. It shall be duty of officer whom the notice is sent to attend the meeting and failure to attend the meeting shall report such failure to Tribunal.
> The CL if thinks fit may instead of requiring any officers to attend the meeting require such officer to answer any interrogatories or to furnish in writing any information that he may require for purposes of such meeting. |
| Proof of Notice | > An affidavit by any person who sent the notice, shall be sufficient evidence of the notice having been sent to the person to whom the same was addressed and the affidavit shall be filed in the Tribunal in Form WIN 31. |
| Costs of Meeting | > Cost of Meetings of Creditors and Contributories shall be met out of the assets of the Company. |
| Chairman of the Meeting | > CL or some person nominated by him shall be the Chairman.
> Such nomination shall be in form WIN 32. |
| Resolution at creditors’ meeting | > At a meeting of creditors, a resolution shall be deemed to be passed, when a majority in value of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution and in a winding up by the Tribunal, the value of a creditor, shall, for the purposes of a first meeting of the creditors meeting held under section 287, be deemed to be the value as shown in the books of the company, or the amount mentioned in his proof as referred to rule 101, whichever is less and for the purposes of any other meeting, the value for which the creditor has proved his debt or claim. |
| Resolution of contributories’ meeting | > a resolution shall be deemed to be passed when a majority in value of the contributories present personally or by proxy and voting on the resolution have voted in favour of the resolution and the value of the contributories shall be determined according to the number of votes to which each contributory is entitled as a member of the company under the provisions of the Act, or the articles of the company, as the case may be. |
| Copies of resolutions to be filed | > CL shall file in the Tribunal a copy certified by him of every resolution passed at a meeting and the Registry shall keep in each case a file of such resolution. |
| Non-receipt of notice by creditor or contributory | > the proceedings and resolution at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding that some creditors or contributories may not have received the notice sent to them. |
| Adjournments | > With consent of the creditors or contributories present in the meeting may adjourn it from time to time and the same shall be held at the same place unless in the resolution for adjournment another place is specified or unless the Tribunal otherwise orders. |
| Procedure in absence of quorum | > Within half an hour if the quorum is not present than the meeting shall be adjourned and if at such adjourned meeting the quorum is not present, atleast 2 creditors or contributories present in person shall form the quorum. If at the adjourned meeting also 2 creditors or contributories are not present the chairman shall submit the report to Tribunal. |
| When Creditor can vote | > Meeting held under Section 287 is held or any adjournment thereof a person shall not be entitled to vote as a creditor unless he has duly lodged with the CL proof of the debt which he claims to be due to him from the company and in other meeting of creditors shall not be entitled to vote unless proof of debt has been admitted wholly or in part before the date on which the meeting is held.
> Provided Rules 59 to 62 shall not apply to a meeting of creditors held prior to the meeting of creditors under section 287. > Provided further that this rules shall not apply to any creditors or class of creditors who by virtue of these rules or any directions given thereunder are not required to prove their debts. |
| Case in which creditors may not vote | > A creditor shall not vote in respect of any unliquidated or contingent debt or any debt, value of which is not ascertained, debt secured by a current bill of exchange or promissory note held by him unless he is willing to treat liability to him thereon of every person who is liable thereon antecedently to the company, and against whom no order of adjudication has been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for purposes of dividend, to deduct it from his proof mentioned above. |
| When Secured creditor can vote | > unless he surrenders his security, state in his aforesaid proof, the particulars of his security, the date when it was given and the value at which it is assessed by a registered valuer, and shall be entitled to vote only in respect of the balance due to him, if any, after deducting the value of his security. |
| Effect of voting by Secured Creditor | > If a secured creditor votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Tribunal, on an application by such creditor, is satisfied that the omission to value the security was due to inadvertence. |
| Procedure when secured creditor votes without surrendering security | > The liquidator may within 15 days from the date of the meeting at which a secured creditor voted on the basis of his valuation of the security, require him to give up the security for the benefit of the creditors generally on payment of the value so estimated by him, and may, if necessary, apply to the Tribunal for an order to compel such creditor to give up the security. |
| Admission or rejection of proof for purposes of voting | > The chairman of the meeting shall have power to admit or reject a proof for the purposes of voting, but his decision shall be subject to appeal to the Tribunal, and if he is in doubt whether a proof shall be admitted or rejected, he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained. |
| Minutes of the Proceedings | > The chairman of the meeting shall cause minutes of the proceedings at the meeting to be drawn up and fairly entered in the Minute Book within 30 days and the minutes shall be signed by him or by the chairman of the next meeting.
> A list of creditors and contributories present at every meeting shall be made and kept in Form WIN 33. |
| Report to Tribunal | > The CL shall within 7 days of the conclusion of the meeting shall report the result thereof to the Tribunal in Form WIN 34. |
| PROXIES IN RELATION TO MEETINGS OF CREDITORS AND CONTRIBUTORIES | |
| Voting by proxies | > Person may vote in person or through proxy and person representing Body Corporate shall present resolution authorising him to CL or Chairman and such copy should be CTC by director, manager, secretary or other officer of the company duly authorised in that behalf, who shall certify that he is so authorised. |
| Form of proxies | > General proxy in Form WIN 35 and Special Proxy in Form WIN 36. |
| Proxies to Company Liquidator or chairman of meeting | > A creditor or contributory in a winding up by the Tribunal may appoint the Company Liquidator or if there is no such liquidator, the chairman of the meeting, to act as his general or special proxy. |
| Use of proxies by Deputy | > Where a CL who holds any proxies cannot attend the meeting for which they are given, he may in writing depute some person under his official control to use proxies on his behalf and in such manner as he may direct. |
| Forms to be sent with notice | > Proxy forms to be sent with notice. |
| Proxies to be lodged | > Shall be lodged not later than 48 hours before the meeting with the CL . |
| Holder of proxy not to vote on matter in which he is financially interested | > No person acting either under the general or special proxy shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer in a position to receive any remuneration out of assets of the Company otherwise than as creditor ratably with the other creditors of the Company. |
| Submission of periodical reports to the tribunal | > CL shall make quarterly reports as referred to in Section 288(1) to the Tribunal in Form WIN 37 with respect to the progress of winding up of the Company. |
| Employment of additional or special staff by Official Liquidator | > OL shall apply to the Tribunal for sanction on such salaries and allowances as the Tribunal may deem appropriate. |
| Declaration by Professional | > Professional appointed as per section 291 by CL with sanction of the Tribunal shall file declaration in Form WIN 38 disclosing any conflict of interest or lack of independence in respect of his appointment with Tribunal forthwith. |
| REGISTERS AND BOOKS OF ACCOUNT TO BE MAINTAINED BY COMPANY LIQUIDATOR | |
| Record book to be maintained by CL | > In which the CL shall enter the minutes and resolutions passed, the substance of all orders passed by the Tribunal in the liquidation proceedings, and all such matters other than matters of account as may be necessary, to furnish a correct view of the administration of the company’s affairs. |
| Registers and books to be maintained by Company Liquidator | a. Register of Liquidations in Form WIN 38 A
b. Central Cash Book in Form WIN 38 B c. Company‘s Cash Book in Form WIN 38 C; d. General Ledger in Form WIN 38 D; e. Cashier’s Cash Book in Form WIN 38 E; f. Bank Ledger in Form WIN 38 F; g. Register of Assets in Form WIN 38 G; h.Securities and Investment Register in Form WIN 38 H; i. Register of Book Debts and Outstanding‘s in Form WIN 38 I; j. Tenants Ledger in Form WIN 38 J; k. Suits Register in Form WIN 38 K; l. Decree Register in Form WIN 38 L; m. Sales Register in Form WIN 38 M; n.Register of Claims and Dividends in Form WIN 38 N; o. Contributories Ledger in Form WIN 38 O; p. Dividends Paid Register in Form WIN 38 P; q. Suspense Register in Form WIN 38 Q; r. Documents Register in Form WIN 38 R; s. Books Register in Form WIN 38 S; t. Register of unclaimed dividends and undistributed assets, deposited into the companies liquidation account in the Bank, in Form WIN 38 T > Where accounts are incomplete the CL shall with all convenient speed as soon as the order for winding up is made have them completed and brought up to date. > Where the Cl is authorised to carry on the business shall keep separate books of account in respect to such business and such books shall, as far as possible, be in conformity with the books already kept by the company in the course of its business, and the CL shall incorporate winding up cash book and in the company’s cash book, the total weekly amounts of the receipts and payments on such trading account. The trading account shall, from time to time not less than once in every month, be verified by affidavit, and the CL shall thereupon submit such account to the advisory committee (if any) or such member thereof as may be appointed by the said committee for that purpose, who shall examine and certify the same. > CL shall keep vouchers for all payments made or expenses incurred by him and shall be serially numbered. |
| BANKING ACCOUNT OF COMPANY LIQUIDATOR | |
| All money to be paid into special bank account in a scheduled bank. | > CL shall deposit into a special bank account in his official name opened in any scheduled bank or any other bank as may be permitted by the Tribunal all moneys including cheques and demand drafts received by him and the realisations of each day shall be deposited in the bank without deduction, not later than the next working day of the bank and the CL may maintain a petty cash of Rs. 5000 or such higher amount as may be permitted by the Tribunal to meet day to day expenses, and all payments out of the aforesaid account by the Company Liquidator above Rs. 2000 shall be made by cheque drawn against the said account.
> CL shall make quarterly reports to the Tribunal regarding the funds, including filing the bank statements of the special bank account. |
| Bills, cheques, etc. to be deposited with bank | > All bills, cheques, hundies, notes and other securities payable to the company or to the CL thereof shall be deposited by him with the bank for the purpose of being presented for acceptance and payment or for payment only, as the case may be and the proceeds when realised shall be credited by the bank to the special bank account. |
| Payments into Bank | > When Tribunal directs any person to make payment in to the special bank account at the time of making payment produce to the bank a certified copy of the order or a payment in challan endorsed by the CL under his signature and the person making the payment shall give notice thereof to the Company Liquidator and produce before him the bank receipt relating thereto. |
| Company Liquidator’s Dividend Account | > CL shall also open a separate dividend account for the Company under liquidation with the sanction of Tribunal, in any scheduled Bank under the name ‘the Dividend Account of………….. (name of the company) in liquidation‘ into which account he shall, upon a declaration of dividend being made in the winding up of the company, deposit by transfer from special bank account, the total amount of the dividend payable upon such declaration and there shall be a separate such account in respect of each declaration of dividend and all payments of dividend shall be made from the said Company Liquidator’s dividend account and any unpaid balance in the said account shall be transferred to the Company Liquidation Dividend and Undistributed Assets Account referred to in sub-section (1) of section 352, and all payments of dividends shall be made by cheques or through Electronic Clearing System drawn against the said account. |
| Where the company has no available assets | > Where the winding up order has been made the CL may with the leave of the Tribunal incur necessary expenses in connection with winding up out of any permanent advance or the fund provided by the Central Govt. and the expenses so incurred shall be recouped out of the assets of the Company in priority to the debts of the Company.
Provided where the any money has been advanced to CL by the Petitioner or other creditor or contributory for meeting any preliminary expenses in connection with the winding up, the CL may incur any necessary expenses out of such amount, and the money so advanced shall be paid out of the assets of the company in priority to the debts of the company. > OL maintains any Common Pool Fund or Establishment Fund under order of the court prior to the date of the commencement of these rules, he shall continue to use such fund for the purpose for which the fund was originally created. The OL shall reimburse the amount availed out of the said Fund for the purpose of meeting the expenditure of the company in liquidation which does not have sufficient funds to its credit from the amounts of the company in liquidation on priority basis as and when any amount comes to its credit. |
| INVESTMENT OF SURPLUS FUNDS | |
| > All the money standing in credit and not immediately required for the purposes of Winding up shall be invested in Govt. securities or in interest bearing deposits in any scheduled bank in the name of the company in liquidation or provisional liquidation represented by CL of the company to which the funds belong and such funds so invested shall be monitored regularly and the returns also containing the details of fixed deposit receipts shall be submitted to the Tribunal.
> The FD shall not be automatically renewed the CL shall carry out due diligence to assess whether a higher rate of interest is available in any other scheduled bank and the said CL shall report conclusion of such due diligence to Tribunal and in the event of higher rate of interest is available in any other scheduled bank, the said Liquidator shall apply for the leave of the Tribunal to invest the surplus funds in such other scheduled bank offering higher rate of interest. > The CL at the end of the every month examine the account of liquidation to ascertain what moneys are available for investment and shall make an entry in the record book of his having examined the accounts for the purpose of and of the decision taken by him regarding the investment, and in case he decides not to invest any surplus funds, the reasons for such decision. > All investments shall be made by bank upon written request of CL but the securities shall be retained in the bank in the name and on behalf of the CL and shall not be sold except under written instructions of the CL and when the securities are sold the proceeds shall be credited by the Bank to the account of CL. > All dividends and interest accruing from any securities or investments shall from time to time be received by the bank and placed to the credit of the account of the CL and intimation thereof shall be given to the CL, who shall thereupon credit such dividend or interest in his account to the company to which the security or the investment relating thereto belongs. > Claim refund of income tax or other taxes as may be due. |
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| FILING AND AUDIT OF COMPANY LIQUIDATOR’S ACCOUNT | |
| Half-yearly accounts to be filed | > CL shall file his accounts to Tribunal twice a year and such accounts shall be made upto 31st March to be filed by 30th June and 30th September to be filed by 31st December.
> Final accounts shall be filed as soon as affairs of the Company have been fully wound up irrespective of the period specified above. > Tribunal may permit the CL to straight away forward completed accounts of the Company in liquidation in respect of relevant period to the auditor for the purpose of audit in Form WIN 42 requesting that the accounts may be audited, and the certificate of audit shall be submitted to the Tribunal not later than 1 month from the date of receipt of the copy of the accounts as required under Section 294(3). Provided also that the accounts need not be got audited where the transaction during the period is for Rs. 10000 or less. |
| Form of account | > Statement of receipts and payments in Form WIN 39 and 3 copies shall be filed account shall be verified by an affidavit of the Company Liquidator in Form WIN 40 and the final account shall be in Form WIN 41. |
| NIL account | > CL has not received or paid any sum of money on account of assets of the Company during the period of account shall file an affidavit. |
| Audit of Company Liquidator’s accounts | > The Accounts shall be audited preferably by one or more CA’s appointed by Tribunal from out of the panel to be maintained by Tribunal, the audit shall be complete check of accounts of CL. |
| Audit certificate to be filed | > Auditor shall forward to the Registry a certificate of audit and another copy to CL.
> CL shall file the copy of Audit certificate along with Audited accounts with ROC and Registry shall file the original certificate with records of Tribunal. |
| Audit fees | > Shall be fixed by Tribunal. |
| Inspection of account and certificate of audit | > Can inspect on payment of fees of Rs. 100 and copy can be obtained on payments of Rs. 5 per page. |
| DEBTS AND CLAIMS AGAINST COMPANY | |
| Notice for proving debts | > Within 30 days from the Winding up order, fix the date and give 14 days notice thereof by:
– Advertisement in Form WIN 43 to creditors to prove their debts or claims and to establish any title they may have priority under section 326 or 327, or to be excluded from the benefit of any distribution made before such debts or claims are proved, or, as the case may be, from objecting to such distribution; – by such mode of communication as is permitted under section 20 to every person mentioned in the statement of affairs, as a creditor, who has not proved his debt and to Preferential creditor, whose claim to be a preferential creditor has not been established or is not admitted, or where there is no statement of affairs, to the creditors as ascertained from the books of the company and, to each person who, to the knowledge of the CL, claims to be a creditor or preferential creditor of the company and whose claim has not been admitted, to the last known address or place of residence of such person. > All the rules hereinafter set out as to the admission or rejection of proofs shall apply with necessary variations to any claim to priority as a preferential creditor. |
| Proof of Debts | > Every creditor will have to prove his debt unless Tribunal directs that any creditors or class of creditors shall be admitted without proof. |
| Mode of proof and Verification thereof | > By delivering or sending through modes permitted under Section 20 an affidavit verifying the debt made by the creditor or by some person authorised by him and if the affidavit is made by a person authorised by the creditor, it shall state the authority and means of knowledge of the deponent and a creditor need not attend upon the examination unless required so to do by the Company Liquidator. |
| Contents of Proof | > Statement of accounts showing the particulars of debt and specify the vouchers if any by which the same can be substantiated and the affidavit shall state whether the creditor is a secured creditor, or a preferential creditor, and if so, shall set out the particulars of the security or of the preferential claims, and the affidavit shall be in Form WIN 44. |
| Workmen’s dues | > where there are numerous claims for wages or any accrued remuneration by workmen and others employed by the company, it shall be sufficient if one proof in Form WIN 45. |
| Production of bills of exchange and promissory notes | > shall be produced before the Company Liquidator and be marked by him before the proof is admitted. |
| Value of debts | > Shall be estimated according to the value thereof at the date of appointment of PL or the Order of Winding Up of the Company, whichever is earlier.
> Where resolution for winding up is passed before the presentation of Petition, the date for estimation of debts and claims shall be the date of the passing of resolution. |
| Discount | > Trade discounts to be deducted |
| Interest | > On any debt or certain sum payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the winding up order, or the resolution, as the case may be, the creditor may prove for interest at a rate not exceeding % per annum or as decided by the Tribunal up to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that interest will be claimed from the date of demand until the time of payment. |
| Periodical payments | > When any rent or other payment falls due at the time referred above and the order or resolution is made at any time other than those mentioned above the person shall be entitled to payments for a proportionate part thereof up to the date of winding up order or resolution accrued due from day to day.
> Provided that where the CL remains in occupation of the premises demised to a company which is being wound up, nothing in this rule shall prejudice or affect the right of the landlord of such premises to claim payment by the company, or the liquidator, of rent during the period of the company’s or liquidator’s occupation. |
| Examination of proof | > CL shall within 30 days or such time prescribed by Tribunal on an application by the Liquidator, examine every proof and if requires the creditor to attend investigation in person shall fix a day and send notice in Form WIN 46 before 7 days of the date fixed by pre paid registered post or speed post. |
| Affidavit | > In relation to the admission of proof of debts the CL may take affidavit or an undertaking in lieu of an oath. |
| Costs of Proof | > Unless otherwise ordered by the Tribunal, a creditor shall bear the costs of proving his debt. |
| Acceptance or rejection of proof to be communicated | > Within 14 days of conclusion of examination of debts the CL shall in writing admit or reject the proof in whole or part, shall be communicated to creditor by means under Section 20.
> Rejection in Form WIN 47. > Admission of proof in Form WIN 48. |
| Appeal by creditor | > If dissatisfied with the decision of CL in respect of his proof the creditor may not later than 21 days from the date of service of the notice of decision appeal to Tribunal against the decision.
> Appeal shall be made in Form WIN 49 supported by an affidavit shall set out the grounds of appeal. |
| Procedure where creditor appeals | > CL on receipt of appeal against his rejection of proof wholly or in part shall file with registry such proof with the order containing grounds of rejection. |
| Company Liquidator not to be personally liable for costs | > CL not personally liable in relation to appeal filed. |
| Proofs and list of creditors to be filed in Tribunal | > CL within 30 days from the date fixed for the submission of proofs a list of creditors in Form WIN 50 who submitted to him proofs of their claims in pursuance of the advertisement and the notice for proving debts, distinguishing in such list the proofs admitted wholly, or rejected in part, and the proofs wholly rejected, and the proofs, with the memorandum of admission or rejection of the same in whole or in part, as the case may be, endorsed thereon, shall be filed in Tribunal along with the certificate. |
| List of creditors not to be varied | > List filed cannot be varied or added except under order of Tribunal. |
| Notice of filing list and inspection of same | > Upon filing of the list of creditors as settled and proofs thereto the registry shall notify the same on notice board and website of Tribunal and the same shall be open for inspection by every creditor and contributory on payment of fees of Rs. 1000. |
| Expunging of proof | > If CL has reason to believe that the proof has been improperly admitted or admitted by mistake he may immediately apply to Tribunal upon notice to the creditor who made the proof, to expunge the proof or reduce its amount, as the case may be.
> Any creditor or contributory may, within 10 days of the admission of the proof, also apply to the Tribunal to expunge the proof or reduce the amount thereof, if the CL declines to move in the matter. |
| Procedure on failure to prove debt within time fixed | > If creditor fails to file proof of his debt within specified time than such creditor may apply to Tribunal for relief within 15 days from the time specified in such advertisement. |
| Right of creditor who has not proved debt before declaration of dividend | > Shall be entitled to be paid out of any money for the time being in hands of CL available for distribution of dividend, but shall not be allowed to disturb the distribution of any dividend declared before his debt was proven by reason that he has not participated therein. |
| Payment of subsequent interest | > In the event of there being a surplus after payment in full of all the claims admitted to proof, creditors whose proofs have been admitted shall be paid interest from the date of the winding up order or of the resolution, as the case may be, up to the date of the declaration of the final dividend, at a rate not exceeding six per cent. per annum or such other rate as may be decided by the Tribunal, on the admitted amount of the claim, after adjusting against the said amount the dividends declared as on the date of the declaration of each dividend. |
| COLLECTION AND DISTRIBUTION OF ASSETS IN WINDING UP BY TRIBUNAL | |
| Powers of Company Liquidator | > Collection of assets and application of the assets in discharge of Company’s liabilities shall be discharged by the CL subject to control of Tribunal. |
| Company Liquidator to be in position of receiver | > CL for purpose of acquiring and retaining possession of the property of the company, be in the same position as if he were a Receiver of the property appointed by the Tribunal. |
| Company’s property to be surrendered to Company Liquidator on requisition | > Any contributory for the time being on the list of contributories, trustee, receiver, banker, agent, officer or other employee of a company which is being wound up, shall on notice from the CL and within such time as he shall by notice require, pay, deliver, convey, surrender or transfer to or into the hands of the CL any money, property or books and papers in his custody or under his control to which the company is or appears to be entitled and where the person so required fails to comply with the notice, the CL may apply to the Tribunal for appropriate orders and the notice shall be in Form WIN 51. |
| CALLS IN WINDING UP BY TRIBUNAL | |
| Company Liquidator to realise uncalled capital | > Notwithstanding any charge or encumbrance on the uncalled capital of the company, the CL shall be entitled to call and realise the uncalled capital of the company and to collect the arrears, if any, due on calls made prior to the winding up, but shall hold all moneys so realised subject to the rights, if any, of the holder of any such charge or encumbrance. |
| Application for leave to make call | > Within 7 days of settlement of list of contributories the CL may apply to the Tribunal for leave to make call and application shall be in Form WIN 52 and affidavit of CL in Form WIN 53. |
| Notice of Application | > Notice of application for leave to make a call shall be served on every contributory proposed to be included in the call by post under certificate of posting so as to reach such contributory, in the ordinary course of post not less than 7 clear days before the date appointed for the hearing thereof.
> If tribunal directs advertisement in Form WIN 54 can be given not less than 7 clear days before the date appointed for the hearing thereof without a separate notice to each contributory. > Affidavit of service relating to the dispatch of notice or to the advertisement, as the case may be, shall be filed in the Tribunal 3 days before the date fixed for the hearing. |
| Order granting leave to make call and document making call | > Order for granting call in Form WIN 55.
> CL shall file document making the call in form WIN 56. |
| Service of notice of call | > CL shall serve by registered post / speed post / electronic mode Order granting leave to make calls and notice in Form WIN 57. |
| Order for payment of call | > CL may apply to Tribunal for an order against any contributory for payment of moneys due on the calls and the same shall be in Form WIN 58 and affidavit in Form WIN 59 and the same shall be served by registered post / speed post not less than 7 days before the date fixed for hearing and the order shall be in Form WIN 60. |
| Other moneys due by contributories | > When any money is due to the company from a contributory including moneys due on calls made prior to the winding up the CL may make an application to the Tribunal supported by an affidavit for an order against such contributory for the payment of such moneys and the said notice shall be given to such contributory by registered post or speed post not less than 7 days prior to the date fixed for the hearing of the application. |
| EXAMINATION UNDER SECTIONS
299 (Power To Summon Persons Suspected Of Having Property Of The Company Etc.) AND 300 (POWER TO ORDER EXAMINATION OF PROMOTERS, DIRECTORS, ETC.) |
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| Application for examination under section 299 | > May be made ex-parte, provided that where the application is made by any person other than the CL shall be accompanied with affidavit, notice of the application shall be given to the CL.
> Such application shall be in Form WIN 61 and where the application is made by CL shall be accompanies with the statement signed by him setting forth the facts on which the application is based. |
| Directions at hearing of application | > Unless the Tribunal otherwise directs, the examination of such person shall be held in Chambers and the order shall be in Form WIN 62. |
| Service of summons | > The summons issued in pursuance of the order shall be in Form WIN 63 and shall be served, as referred to in section 20, on the person to be examined atleast 7 days before the date fixed for the examination, and when the summons are served in person, there shall be paid or tendered to the person summoned along with the summons a reasonable sum for his expenses to be fixed by the Tribunal or Registry with due regard to the scale of fees in force in the Tribunal and when the summons are served by registered post, such sum shall be sent to such person by postal money order. |
| Conduct of examination | > where the conduct of the examination is entrusted to any person other than the CL, the CL shall nevertheless be entitled to be present at the examination in person or by authorised representative, and may take notes of the examination for his own use and put such questions to the person examined as the Tribunal may allow.
> No person shall be entitled to take part in examination except CL and his Authorised representative, but the person being examined assistance of his authorised representative, who may re-examine the witness. |
| Notes of deposition | > Shall be signed by such person and shall be lodged in the office of Registry but the notes shall not be open for inspection or extract to any person other than CL. |
| Order for examination under section 300 | > the examination shall be held before the Tribunal. Order directing examination shall be in Form WIN 64. |
| Notice of examination | > Atleast 7 clear days before the date fixed for the examination, the CL shall give notice thereof to the creditors and contributories of the company by advertisement in Form WIN 65 in such newspapers as the Tribunal shall direct, and shall within the same period, serve, either personally or by registered post or by speed post, on the person or persons to be examined,
a notice in Form WIN 66 of the date and hour fixed for the examination and the officer before whom it is to be held, together with a copy of the order directing the examination and where the examination is adjourned, it shall not be necessary to advertise the adjournment or serve notice thereof unless otherwise ordered by the Tribunal. |
| Procedure for contumacy | > Person refuses to answer to the satisfaction of the person or authority any question then such person or authority shall forthwith report such refusal to the Tribunal and then the person in default be dealt with in the same manner as if he had made default in answering before the Tribunal.
> Report shall be in Form WIN 67. |
| Notes of examination | > Entitled to obtain a copy thereof from the Tribunal on payment of Rs. 5 per page. |
| Warrant of arrest of contributory | > If tribunal is satisfied as referred in Section 301 (Arrest of Person trying to leave India or abscond) and that notice for date and time for examination was served on such contributory, Tribunal may issue warrant in Form WIN 68. |
| Prison to which contributory arrested on warrant is to be taken | > warrant for keeping the said contributory in prison shall be in Form WIN 69 and the order of releasing him on bail shall be in Form WIN 70. |
| Execution of warrant of arrest outside jurisdiction of Tribunal | > Where a warrant has been issued by the Tribunal under these rules for the arrest of a contributory who is or is believed to be outside the jurisdiction of the Tribunal, may send the warrant of arrest for execution to the District Court or, to the Court of Small Causes at Bombay, Calcutta or Madras (if the warrant has to be executed in any of these places) within the ordinary jurisdiction of which such contributory shall then be or be believed to be, with a requisition in Form WIN 71 annexed thereto under the seal of the Tribunal requesting execution of the warrant by the Court to which it is sent and the last mentioned Court shall seal the warrant with its seal and shall cause the arrest to be made by its own officers or by a Court subordinate to it and the concerned police officers shall aid and assist within their respective jurisdiction in the execution of such warrant. |
| APPLICATION AGAINST DELINQUENT DIRECTORS, PROMOTERS AND OFFICERS OF THE COMPANY | |
| Application under section 339 (Liability for fraudulent conduct of business) or section 340 (Power of Tribunal to assess damages aginst delinquent directors, etc.) | > Shall be made by a summons returnable in the first instance in chambers and be served on every person against whom an order is sought not less than 7 days before the day named in the summons for the hearing of the application, and it shall not be necessary to file any affidavit or report before the return of the summons and the summons shall be in Form WIN 72 or Form WIN 73 with such variations as may be necessary. |
| Directions at preliminary hearing of summons | > Generally as to the procedure on the summons and for the hearing thereof, and points of claim to be delivered shall be in Form WIN 74 or Form WIN 75 with such variations as may be necessary. |
| Liberty to apply for further directions | > Where the Tribunal has directed that points of claim and defense shall be delivered, it shall be open to either party who wishes to apply for any further direction as to any interlocutory matter, to apply, by restoration of the summons, before the summons has been set down for trial, for such direction, upon giving two clear days’ notice in writing to the other party stating the grounds of the application and a copy of the notice shall be filed with the Registry, two clear day’s before the day fixed for the hearing of the application. |
| DISCLAIMER | |
| Application for disclaimer | > An application for leave to disclaim any part of the property of a company pursuant to Section 333(1) shall be made by an application supported by an Affidavit. The notice and application shall be in Forms WIN 76 to 82. |
| Preliminary hearing of application | > The application as mentioned above shall be posted before the Tribunal ex-parte at first instance and then shall fix a date of hearing. |
| Claimant to furnish statement of his interest | > Where a person claims to be interested in any part of the property of the company which the Company Liquidator wishes to disclaim, such person shall, if so required by the liquidator, furnish a statement of the interest claimed by him. |
| Service of Notice | > Notice for application for disclaimer shall be in Form WIN 83 and shall be served not less than 7 days before the date of hearing together with copy of application and of Affidavit filed in support thereof and notice shall require that any affidavit in opposition to the application shall be filed in Tribunal and copy thereof shall be served on CL not later than 2 days before hearing. |
| Order granting leave to disclaim | > Order granting leave to disclaim shall be in Form WIN 84. |
| Disclaimer to be filed in Tribunal | > The disclaimer shall contain particulars of the interest disclaimed and a statement of the persons to whom notice of the disclaimer has been given; a disclaimer shall be in Form WIN 85, and a notice of disclaimer in Form WIN 86, and where a disclaimer has been filed in Tribunal, the CL shall file a copy thereof with the ROC. |
| Vesting of disclaimed property | > An order requiring parties interested in a disclaimed lease to apply for a vesting order or to be excluded from all interest in the lease shall be in Form WIN 87, and an order vesting lease and excluding persons who have not elected to apply, shall be in Form WIN 88. |
| SALE BY COMPANY LIQUIDATOR | |
| Sale to be subject to sanction and to confirmation by Tribunal | > Every property or asset belonging to Company shall be sold by CL after confirmation from Tribunal. |
| Procedure at sale | > All sales shall be made by public auction or by inviting sealed tenders or by electronic bidding or in such manners as the Tribunal may direct. |
| Expenses of sale | > Where property forming part of a company’s assets is sold by the Company Liquidator through an auctioneer or other agent, the gross proceeds of the sale shall, be paid over to the liquidator by such auctioneer or agent and the charges and expenses connected with the sale shall afterwards be paid to such auctioneer or agent in accordance with the scales, if any, fixed by the Tribunal. |
| DIVIDENDS AND RETURNS OF CAPITAL IN WINDING UP BY TRIBUNAL | |
| Declaration of dividend or return of capital | > No dividend to creditors or return of capital to contributories shall be declared by the CL without the sanction of the Tribunal. |
| Notice of declaration | > CL shall give notice of the declaration of dividend not less than 15 days prior to the date fixed for the payment thereof and such notice shall be given by advertisement in such newspapers as the Tribunal shall direct and by sending by registered or speed post and electronic mode if any, a notice to every person whose name appears in the list of creditors as on such date and the advertisement shall be in Form WIN 89 and the notice to creditor in Form WIN 90. |
| Form of authority to pay dividend | > Person to whom dividend is payable may lodge with CL in writing to pay such dividend to another person in Form WIN 91. |
| Transmission of dividends, etc. by post | > at the request and risk and cost of the person to whom they are payable, be transmitted to him by money order, or to his bank account through electronic means as may be appropriate. |
| Form of order directing return of capital | > Every order by which the CL is authorised to make a return to contributories of the company, shall, contain or have appended thereto a schedule or list (which the CL shall prepare) setting out in a tabular form and such other information as may be necessary to enable the return to be made and the schedule or list shall be in Form WIN 92 with such variations as circumstances shall require and the CL shall send a notice of return to each contributory by registered or speed post and electronic mode if any in Form WIN 93. |
| TERMINATION OF WINDING UP | |
| Company Liquidator to apply for dissolution | > After the affairs of the company have been fully wound up and final accounts thereof are audited, the CL shall apply to the Tribunal within 10 days along with audited final accounts and auditors certificate thereon for orders as to the dissolution of the company. |
| Dissolution of company | > Upon the hearing of the application, the Tribunal may, after hearing the CL and any other person to whom notice may have been ordered by the Tribunal, upon perusing the account as audited, make such orders as it may think fit as to the dissolution of the company. |
| Liquidator to pay the balance into Company Liquidation Dividend and Undistributed Assets
Account. |
> Upon an order for dissolution being made, the CL shall forthwith pay into the Company Liquidation Dividend and Undistributed Assets Account any unclaimed dividends payable to creditors or undistributed assets refundable to contributories in his hands on the date of the order of dissolution, and such other balance in his hands as he has been directed by the Tribunal to deposit into the Company Liquidation Dividend and Undistributed Assets Account and every order of dissolution shall direct that the CL shall forward a certified copy of the order to the Registrar of Companies not later than 7 days from the date of the order, and along with the copy of the order shall be filed with the ROC, a statement signed by the CL that the directions of the Tribunal regarding the application of the balance as per his final account have been duly complied with. |
| Conclusion of winding up | > Winding up shall be deemed to be concluded at the date on which the order dissolving the company has been reported by the CL to the ROC unless any fund or assets of the company remaining unclaimed or undistributed in the hands or under the control of the Company Liquidator, have been distributed, or paid into the Company Liquidation Dividend and Undistributed Assets Account as provided in section 352. |
| PAYMENT OF UNCLAIMED DIVIDENDS OR UNDISTRIBUTED ASSETS INTO THE COMPANY LIQUIDATION DIVIDEND AND UNDISTRIBUTED ASSETS ACCOUNT IN A WINDING UP | |
| Statement to accompany payment | > The statement to be furnished, under section 352(3) to the ROC, by the liquidator when making any payment of unclaimed dividends or undistributed assets into the Company Liquidation Dividend and Undistributed Assets Account in a scheduled bank under sub-sections (1) and (2) of the said section, shall be in Form WIN 94.
> The liquidator shall, whenever called upon by the ROC so to do, certify whether a person claiming payment from the Company Liquidation Dividend and Undistributed Assets Account under Section 352(7) is or is not entitled to the whole or any part of the amount claimed. |
| Unclaimed dividends or undistributed assets under investment | > money invested or deposited at interest by the liquidator shall be deemed to be money in his hand, and when such money forms part of the unclaimed dividends or undistributed assets of the company, the liquidator shall realise the investment or withdraw the deposit and shall pay the proceeds into the Company Liquidation Dividend and Undistributed Assets Account. |
| Cost and expenses payable out of the assets in a winding up by Tribunal | > The assets of a company in a winding up by the Tribunal remaining after payment of the fees and expenses properly incurred in preserving, realising or getting in the assets shall, subject to any order of the Tribunal and to the rights of secured creditors if any, be liable to the following payments which shall be made in the following order of priority, namely :-
– First- the taxed costs of the petition including the taxed costs of any person appearing on the petition, whose costs are allowed by the Tribunal; – Next-the costs and expenses of any person who makes, or concurs in making, the company’s statement of affairs; – Next-the necessary disbursements of the Company Liquidator other than expenses properly incurred in preserving, realising or getting in the properties of the company; – Next-the cost of any person properly employed by the Company Liquidators; – Next-the cost, charges and expenses incurred by the liquidator; – Next-the actual out of pocket expenses necessarily incurred by the members of the advisory committee, and sanctioned by the Tribunal. > Save as otherwise ordered by the Tribunal, no payments in respect of bills of authorised representatives, shall be allowed out of the assets of the company without proof that the same have been considered and allowed by the taxing officer of the Tribunal and the taxing officer shall before passing the bills or charges of an authorised representative, satisfy himself that the appointment of an authorised representative to assist the liquidator in the performance of his duties has been duly sanctioned. > Nothing contained in this rule shall apply to or affect costs which, in the course of legal proceedings by or against the company which is being wound up by the Tribunal, are ordered by the Tribunal in which such proceedings are pending, to be paid by the company or the liquidator, or the rights of the person to whom such costs are payable. |
| Costs in the discretion of Tribunal | > no costs of, or incidental to, a proceeding shall be allowed between party and party, unless the same are expressly awarded by an order of the Tribunal. |
| Bill of costs by authorised representative, etc. employed by Company Liquidator | > Every authorised representative, accountant, auctioneer or other person employed by the CL in a winding up by the Tribunal, shall, on request by the CL deliver his bill of costs or charges to the and if he fails to do so within 4 weeks of the receipt of the request or such extended time as the Tribunal may allow, the CL shall declare and distribute the dividend without regard to such person’s claim and the claim shall be forfeited. Provided that the Tribunal may, at any time before the declaration of the final dividend, for good cause shown, restore the claim and order the bill to be received without prejudice to the distribution of dividends declared
prior to the making of the order, and the request by the CL shall be in Form WIN 95 and shall be served personally or by registered post or speed post. |
| Fees when proceeding is compromised | > Where a proceeding is compromised prior to its being set down for hearing, the fees to be allowed to authorised representatives of the parties shall be as decided by the Tribunal having regard to the nature and complexity of the case. |
| Costs of parties having common interest | > Where two or more petitions or applications raise a common issue and are heard together and decided by a common judgment, unless the Tribunal otherwise orders, only one set of costs shall be allowed to all the parties together in the said petitions or applications who have a common interest. Where different parties in the same proceeding have a common interest, only one set of fees shall be allowed to all of them together, though they may be represented by different authorised representatives, unless the Tribunal otherwise orders. |
| Tribunal’s power to fix a fee | > Nothing in rules shall prevent Tribunal from fixing the fees when it considers it necessary to do so in the interest of justice. |
| Allowance to witnesses | > to be made to witnesses shall be on the scales as determined by the Tribunal. |
| SUMMARY PROCEDURE FOR LIQUIDATION | |
| Powers and functions of Official Liquidator | > As per Section 361 (1) Where the Company to be wound up under this chapter-
i) Assets of book value not exceeding 1 crore; and ii)Belongs to such class or classes of companies as may be prescribed, The Central Government may order it to be wound up by summary procedure provided under this part. > the class of companies shall be as under, based on the latest audited Balance Sheet:- a) the company which has taken deposit and total outstanding deposits is not exceeding 25 lakh rupees; or b) the company of which the total outstanding loan including secured loan does not exceed 50 lakh rupees; or c) the company of which turnover is upto 50 crore rupees; or d) the company of which paid up capital does not exceed 1 crore rupees. > The OL shall maintain registers and books of accounts in the manner provided in rules 79 and 80. > For purpose of filing and audit of the OL’s account the procedure laid down in the preceding rules 91 to 99 shall be followed by modification that wherever the word Tribunal is mentioned it shall be read as Central Government. > For Disposing assets also in the rules (165 to 167) Tribunal shall be read as Central Government. > The monies received by the Official Liquidator as referred to in section 349 shall be paid by him into the public account of India in the Reserve Bank of India as mentioned in that section not later than the next working day of the said Bank. > For the proving of claims the Tribunal in the rules (100 to 125 )shall be read as Central Government. > In the absence of any rules under this Part, on any subject for conduct of liquidation proceeding by the Official Liquidator, the relevant rules in the other Parts of these rules shall be followed with necessary modifications as directed by the Central Government. |
Author Bio
Dear sir,
We have registered a Section 8 company under 2013 company act on 10.02.2020. We could not start any company activity due to covid-19 till date. So, we want to close/winding up our company voluntaily. How to close it ? Please suggest. Thanks.