- Sanskar Garg
Rule 160 of Companies (Winding-up) Rules, 2020: Order of Granting Leave to Disclaim
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The Companies (Winding-up) Rules, 2020 were published by the Ministry of Corporate Affairs in 2020. While the Insolvency and Bankruptcy Code, 2016 covers 'voluntary winding up' and 'winding up on the grounds of inability to pay debts,' the Winding Up Rules outline the procedure for winding up following Section 271 of the Companies Act, which specifies when the NCLT may wind up a company.
Rule 156 discusses the application for leave to disclaim any party of a company's property under subsection (1) of section 333 (Disclosure of Onerous Property).
The tribunal may give the liquidator permission to disclaim the property after hearing the application referred to in Rule 156. The liquidator may apply to the Tribunal for permission to disclaim on such terms and conditions, if any, as the Tribunal may deem just. The stage order to grant leave to the liquidator comes at last when the tribunal completes its hearing of the liquidator and all the parties to whom the notice was issued with regard to appearing and furnishing their statements under Rule 158. The Tribunal order must also consider the other person's statement who appeared and showed an interest in claiming the said property.
After hearing, the tribunal may grant leave to the liquidator and to disclaim on terms and conditions as they think fit to be followed. The order of the tribunal other than following the rules and procedure, should also be just, fair and reasonable.
The order granting leave to disclaim shall be in the format given in Form WIN 84. The order must mention all the particulars of the property, the name of parties appearing or not appeared, particulars of all affidavits submitted before the tribunal and terms and conditions if any imposed with such order.