Section 272 Of Companies Act 2013: Petition For Winding Up

Introduction

Winding up is a method to put a company to an end. It is a process where the life of a company comes to an end and its property is administered for the benefit of its creditors and its members. The winding-up of a company differs from the insolvency of an individual. According to section 270, there are two ways in which a company can be wound up: (1) Compulsory winding up by the Tribunal (NCLT); (2) Voluntary winding up. The grounds on which a company can be wound up are stated under section 271 of the act.

Who can apply for a petition? (Section 272)

An application to the Tribunal for the winding up of the company is made by a petition. According to section 272 of the Companies Act 2013, the petition can be represented by the following:

1. Petition by the company [S. 272(1)(a)] The winding up petition can be presented by the company itself. The petition shall be admitted by the Tribunal only if it is accompanied by a statement of affairs in such form and such manner as may be prescribed [S.272(5)].

2. Creditor's petition [S.272(1)(b)] A creditor who is proceeding against the company on the ground of the company's inability to pay its debt has to proceed under the Insolvency and Bankruptcy Act, 2016. His petition under the companies act is not going to be entertained. His petition can only be entertained under this provision only if it is based on any ground now available under the act.

3. Contributory's petition [S.272(1)(c)] Shareholders of the company are called the contributories on the commencement of the winding-up of the company. A winding-up petition can be presented by any contributory or contributories. It is requisite that the shares for which the petitioner is contributory were originally held or allotted to him and registered under his name for at least 6 months during the last 18 months immediately before the commencement of the winding-up, or devolved on him through the death of a former shareholder. Contributory may ignore the following points [S.272(3)]: -> He may be the holder of fully paid-up shares -> The company may have no assets at all -> Or may have no surplus assets left for the distribution among the shareholders after the satisfaction of its liabilities. NOTE: The date of commencement of winding-up is the date when the petition was filed to the Tribunal.

4. All or any of the persons specified in the above-mentioned clauses.

5. Registrar's petition [S.272(1)(e)] The registrar of the company is also entitled to present a petition of winding-up of the company on any of the grounds provided by the Tribunal under section 271 of the act, except when the company has passed a special resolution. The registrar shall not present a petition on the ground of the company's inability to pay its debts unless it appears to him either from the financial condition of the company as disclosed in its balance sheet or from the report of an inspector appointed under section 210. Grounds on which the registrar can present a petition [S.272(4)] 1. Permission: Prior permission from Central Government is required. 2. Reasonable Opportunity: Central government will approve only when the reasonable opportunity of making representation is given to the company. Copy of petition to ROC [S.272(7)] Copy of petition made to the Tribunal for winding-up shall also be filed with the registrar and the registrar shall submit his views to the Tribunal within 60 days of such petition.

6. Central government's petition [S.272(1)(f)] The central government may authorize any person on their behalf for this purpose.

7. Central Government or State Government's petition [S.272(1)(g)] The central government or State government may apply to the Tribunal for winding-up of a company in case of anti-national acts conducted by the company [S.271(1)(c)].

Procedure for Winding-up of the company

The procedure for winding up by the tribunal is stated under the Companies (Winding-up) Rules, 2020.

1. Eligible petitioners shall file the petitions in the following manner: a) According to section 272(1), the eligible petitioners can file a petition for winding up of a company in Form WIN 1 or WIN 2. If the petition is presented by the company, then it shall be presented in Form WIN 2 and in other cases in Form WIN 1. b) Affidavit shall be attached by the petitioner or petitioners for verification if there is more than one petitioner. In case the petition is presented by the body corporate or Director, Secretary, or any other authorized person, the affidavit shall be attached to Form WIN 3. c) Under Form WIN 4, the statement of affairs must be annexed with the petition which should contain all the up-to-date information. It shall not exceed 30 days prior to the date of filing the petition duly verified by an affidavit in Form WIN 5.

2. Service of petitioner Every contributory of the Company has the right to receive a copy of the petition from the petitioner or his authorized representative within 24 hours of the contributory's requisition, for a fee of five rupees per page.

3. Advertisement of the petition The petition must be published in Form WIN-6 at least 14 days before the Tribunal's hearing date in any daily newspaper in English and vernacular language widely circulated in the State or Union territory where the company's registered office is located. Furthermore, an application for leave to withdraw a petition for winding up that has been advertised will not be heard until the date set forth in the advertisement for the petition's hearing. Petition withdrawals are only permitted if the Tribunal's order is followed, including costs, and the withdrawal must be advertised in the same way as the original petition.