Winding up by court ‑ Petition for winding up ‑ Management to be asked about non‑payment of debts before approving presentation of petitions under sub‑section (5)

Enhancing Winding-Up Petitions: Inquire About Creditor Complaints and Liabilities Before Filing u/s 439(5)/433(e.

The circular addresses the issue of filing petitions for compulsory winding up of companies under section 439(5)/433(e) when liabilities exceed assets. It highlights instances where management claims no creditor complaints and the ability to meet liabilities, leading to petition dismissals by the Punjab and Haryana High Court. To strengthen future petitions, it recommends that Regional Directors inquire with company management about any creditor complaints and their ability to meet current liabilities before approving such petitions. This aims to ensure a more robust basis for winding-up petitions.