Strict compliance with declaration of solvency requirements is essential before voluntary winding-up can validly begin.

A declaration of solvency for voluntary winding-up must comply strictly with section 488(2)(b) of the Companies Act, 1956 and rule 313 of the Companies (Court) Rules, 1959: it must be supported by an audit report up to the latest practicable date, a balance-sheet as on that date, and a separate statement of assets and liabilities in the prescribed form. A declaration supported only by earlier accounts, lacking the required statement, and not filed in Form 149 does not satisfy the statutory precondition. Such defects are substantive, not merely formal, so the voluntary winding-up is not validly initiated and the resolutions appointing the liquidator and supervisors are void.

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Issues: Whether the declaration of solvency complied with section 488(2)(b) of the Companies Act, 1956 and rule 313 of the Companies (Court) Rules, 1959, and whether the resolutions initiating voluntary winding-up and appointing a liquidator were valid.

Analysis: The declaration of solvency had to be supported by an audit report covering the period up to the latest practicable date before the declaration, together with a balance-sheet made out as on that date, and it also had to embody a separate statement of assets and liabilities. The declaration filed in this case was supported only by accounts up to an earlier date, did not contain the required statement of assets and liabilities, and was not in Form 149 as required by rule 313. The defects were not matters of mere form but went to the validity of the statutory precondition for voluntary liquidation.

Conclusion: The declaration of solvency was invalid, the voluntary winding-up was not legally initiated, and the resolutions purporting to commence the winding-up and appoint the liquidator and supervisors were null and void.

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