TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether a creditor is entitled as of right to have a company in voluntary liquidation compulsorily wound up under Section 218 of the Companies Act, 1913. (ii) Whether an application for compulsory winding up is maintainable when the company is not made a party and whether the petition could be amended to substitute the company for the existing opposite parties.
Issue (i): Whether a creditor is entitled as of right to have a company in voluntary liquidation compulsorily wound up under Section 218 of the Companies Act, 1913.
Analysis: Section 218 preserves the right of a creditor who is otherwise entitled to seek compulsory winding up, notwithstanding the pendency of a voluntary winding up. The provision does not confer an independent absolute right on every creditor to convert a voluntary winding up into a compulsory one. The creditor must still satisfy the conditions that would justify a compulsory winding up in the first instance.
Conclusion: The claim that a creditor has an automatic right to compulsory winding up was rejected and the issue was decided against the applicant.
Issue (ii): Whether an application for compulsory winding up is maintainable when the company is not made a party and whether the petition could be amended to substitute the company for the existing opposite parties.
Analysis: The company itself was the essential party to an application seeking a compulsory winding up order. The opposite parties who were mortgagees, auction purchasers, an ex-director, shareholders, and directors were not the necessary parties for adjudication of the merits. In the absence of the company, the Court could not examine the merits of the winding up request. A proposed amendment that would completely change the complexion of the proceeding by substituting the company for the present opposite parties was declined, and fresh proceedings were indicated as the proper course.
Conclusion: The application was held not maintainable in its existing form and the request to amend it in the proposed manner was refused, against the applicant.
Final Conclusion: The proceeding failed because the asserted right to conversion of voluntary winding up into compulsory winding up was not absolute and the petition was incompetent without the company being impleaded as a party.
Ratio Decidendi: Section 218 of the Companies Act, 1913 preserves only the right of a creditor who is otherwise entitled to compulsory winding up, and a winding up petition must include the company as a necessary party for adjudication on merits.
TaxTMI 
