Companies Act Section 272

Companies Act, Section 272: Petition for Winding Up of a Company

Section 272 of the Companies Act, 2013 outlines the procedural framework and eligibility criteria for filing a petition before the National Company Law Tribunal (NCLT) for the winding up of a company under the provisions specified in Section 271. This section clearly defines who may present a petition, under what conditions, and what documentation must accompany the petition. It ensures that petitions for winding up are brought responsibly, by authorised persons, and with due regard to procedural fairness.

Who May Present a Petition for Winding Up

According to sub-section (1) of Section 272, the following parties are legally empowered to present a petition before the Tribunal seeking the winding up of a company:

(a) The Company Itself

A company may decide to approach the Tribunal to voluntarily wind itself up under the circumstances allowed in Section 271. This typically follows a special resolution passed by its shareholders.

(b) Any Contributory or Contributories

A contributory refers to a person liable to contribute to the assets of the company in the event of its winding up. This includes current members and, in some circumstances, past members.

(c) Joint Petition by Company and Contributories

The petition may also be made jointly by the company and one or more contributories.

(d) The Registrar of Companies

The Registrar may also file a petition for winding up based on specific grounds mentioned in Section 271, although this is subject to conditions explained later.

(e) Any Person Authorised by the Central Government

The Central Government may authorise any person to file a petition for winding up on its behalf.

(f) Central or State Government (in Public Interest Cases)

In cases where the winding up is proposed under clause (b) of Section 271 which deals with companies acting against the sovereignty and integrity of India, the security of the State, or public morality the petition may be filed by either the Central Government or the concerned State Government.

Eligibility and Rights of a Contributory to File a Petition

As per sub-section (2), a contributory is entitled to file a petition for winding up even if:

He holds fully paid-up shares (i.e., no unpaid capital).
The company has no assets or is insolvent.
There may be no surplus assets remaining after paying off the company’s liabilities.
However, there are certain conditions attached:

The shares held by the contributory must have been either:
Originally allotted to him, or
Held and registered in his name for at least six months during the eighteen months preceding the commencement of winding-up proceedings, or
Devolved upon him due to the death of a former holder.
These conditions prevent frivolous petitions and ensure that only individuals with a genuine stake in the company can initiate such proceedings.

Conditions for the Registrar to Present a Petition

Under sub-section (3), the Registrar of Companies may present a petition for winding up under any ground mentioned in Section 271, except under clause (a) (which pertains to voluntary winding up by special resolution).

However, the Registrar must first:

Obtain prior sanction from the Central Government before filing such a petition.
Ensure that the company is given a reasonable opportunity to make representations before such sanction is granted.
This procedure ensures that companies are not subjected to winding up proceedings by the Registrar without due process or proper oversight from the government.

Statement of Affairs to Accompany Petition by the Company

As per sub-section (4), if the petition for winding up is being made by the company itself, it must be accompanied by a Statement of Affairs, which:

Should be prepared in the prescribed form, And filed in the manner laid down under the rules.
The Statement of Affairs is a crucial document that provides a detailed financial snapshot of the company, including assets, liabilities, and other pertinent information, which helps the Tribunal assess the company’s position before deciding on the petition.

Filing Copy of Petition with Registrar and Submission of Views

Under sub-section (5), a copy of every petition made under this section must also be filed with the Registrar. Upon receiving the petition:

The Registrar is required to submit his observations or views on the petition to the Tribunal.
This must be done within sixty days from the date of receipt of the petition.
This ensures that the Tribunal has access to an independent regulatory perspective on the matter before passing any order on winding up.