Section 333 of Companies Act 2013
Harmehak Kaur Anand
December 18, 2023 at 10:25 AM
Introduction
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Purpose of Section 333
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Situation Before Enactment of Section 333
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Companies (Winding-up) Rules, 2020
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 explains the application for leave to disclaim any party of a company’s property under subsection (1) of section 333 (Disclaimer of Onerous Property). The application must be accompanied by
- an affidavit that sets forth all relevant facts about the property,
- the parties involved, and the nature of their interests,
- as well as whether the company is solvent and
- whether any notice has been served on the liquidator by any person referred to in sub-section (4) of section 333 of the companies act 2013 requires him to elect whether or not he will disclaim.
The format of all the applications mentioned above and notices can be seen in the rules’ later part, namely FORM 76-82.
- FORM WIN 76: Notice to Liquidator to elect whether he will disclaim
- FORM WIN 77: Notice by Liquidator of intention to apply to Tribunal for leave to disclaim
- FORM WIN 78: Summons for extension of time for giving notice of intent to apply for leave to disclaim
- FORM WIN 79: Order extending the time for a disclaimer
- FORM WIN 80: Notice of property sought to be disclaimed
- FORM WIN 81: Application for leave to disclaim
- FORM WIN 82: Affidavit in support for leave to disclaim a lease
Rule 157
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Rule 158
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Rule 159
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Rule 160
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Rule 161
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Rule 162
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FAQ’s
1. What is disclaimer of onerous property?
Disclaimer of onerous property. (1) The bankruptcy trustee shall notify the bankrupt and the persons interested in the onerous property in respect of the proposed disclaimer, at least seven days prior to serving the notice of disclaimer under sub-section (1) of section 160.
2. Who owns disclaimed property?
Following an effective disclaimer made by a bankruptcy trustee under section 132(2) of the Bankruptcy Act, the disclaimed property will vest in the Crown, and more specifically land will revert to the state government.
3. What happens when property is disclaimed?
In disclaiming assets, a Liquidator would give formal notice to a party of his intention to be rid of any interest in the property. If loss is suffered as a consequence, the affected party must endeavour to mitigate their loss and may prove their claim in the liquidation in respect of the amount of that loss.
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