Who Can Petition for a Compulsory Winding up of A Company? (Section 439 Companies Act, 1956)
Law does not recognise any difference between the secured and unsecured creditors for this purpose. ‘A secured creditor is as much entitled as of right to file a petition as an unsecured creditor.’ But in case of secured creditor’s petition, winding up order shall not be made where the security is adequate and no other creditor supports the petition.
A contingent or prospective creditor can also file a winding up petition if he obtains the prior consent of the court. The court shall grant the permission only when:
(i) It is satisfied that there is a prima facie case for the winding up of the company; and
(ii) The creditor provides such security for costs as the court thinks reasonable.
The court may, before passing a winding up order, on a creditor’s petition, ascertain the wishes of other creditors. If the majority of the creditors in value oppose, and the court having regard to the company’s assets and liabilities considers the opposition reasonable, it may refuse to pass a winding up order.
3. Petition by the contributories:
A contributory shall be entitled to present a petition for the winding up of the company, notwithstanding that he may be the holder of fully paid-up shares or that the company may have no assets at all, or may have no surplus assets left for distribution among the holders after the satisfaction of its liabilities.
It is not necessary for a contributory making petition to have tangible interest in the assets of the company. A contributory or a member may present a petition to the court for the winding up of the company if default has been committed by the company:
(a) In filing the statutory report, or
(b) In holding a statutory meeting according to the rules prescribed by law, or
(c) When the number of members has fallen below the statutory minimum.
But a contributory cannot make a petition for the winding up of the company under clause (a) and (b) stated above unless at least some of the shares held by him were originally allotted to him or have been held by him and registered in his name for at least 6 months during the 18 months before the commencement of the winding up or have devolved upon him through the death of a former holder [Sec. 439 (4)].
4. Petition by the Registrar [Sec. 439 (5)]:
Registrar may with the previous sanction of the Central Government make petition to the Court for the winding up the company only in the following cases:
(a) When default has been made by the company in filing of the statutory report or in holding of the statutory meeting; or
(b) When the company has failed to commence business within one year from its incorporation or suspends its business for more than year; or
(c) When it appears that the company has become unable to pay debts (within the meaning of section 434 of the Act) from the accounts of the company or from the report of the inspectors appointed by the Central Government under Section 235 or 237; or
(d) When the number of members in a company has fallen below the statutory minimum, viz., below 7 in the case of the public company and below 2 in the case of a private company; or
(e) It is just and equitable that the company be wound up; or
(f) When the Central Government authorises the Registrar to make a petition vide Section 243 of the Companies Act.