PART II.—Winding up of unregistered companies
375.Winding up of unregistered companies.
(1) Subject to the provisions of this Part, any unregistered company may be
wound up under this Act, in such manner as may be prescribed, and all the provisions of this
Act, with respect to winding up shall apply to an unregistered company, with the exceptions
and additions mentioned in sub-sections (2) to (4).
(2) No unregistered company shall be wound up under this Act voluntarily.
(3) An unregistered company may be wound up under the following circumstances,
namely:—
(a) if the company is dissolved, or has ceased to carry on business, or is carrying
on business only for the purpose of winding up its affairs;
(b) if the company is unable to pay its debts;
(c) if the Tribunal is of opinion that it is just and equitable that the company
should be wound up.
(4) An unregistered company shall, for the purposes of this Act, be deemed to be
unable to pay its debts—
(a) if a creditor, by assignment or otherwise, to whom the company is indebted in
a sum exceeding one lakh rupees then due, has served on the company, by leaving at
its principal place of business, or by delivering to the secretary, or some director,
manager or principal officer of the company, or by otherwise serving in such manner as
the Tribunal may approve or direct, a demand under his hand requiring the company to
pay the sum so due, and the company has, for three weeks after the service of the
demand, neglected to pay the sum or to secure or compound for it to the satisfaction
of the creditor;
(b) if any suit or other legal proceeding has been instituted against any member for
any debt or demand due, or claimed to be due, from the company, or from him in his
character as a member, and notice in writing of the institution of the suit or other legal
proceeding having been served on the company by leaving the same at its principal
place of business or by delivering it to the secretary, or some director, manager or
principal officer of the company or by otherwise serving the same in such manner as the
Tribunal may approve or direct, the company has not, within ten days after service of the
notice,—
(i) paid, secured or compounded for the debt or demand;
(ii) procured the suit or other legal proceeding to be stayed; or
(iii) indemnified the defendant to his satisfaction against the suit or other
legal proceeding, and against all costs, damages and expenses to be incurred by
him by reason of the same;
(c) if execution or other process issued on a decree or order of any Court or
Tribunal in favour of a creditor against the company, or any member thereof as such, or
any person authorised to be sued as nominal defendant on behalf of the company, is
returned unsatisfied in whole or in part;
(d) if it is otherwise proved to the satisfaction of the Tribunal that the company
is unable to pay its debts.
Explanation.—For the purposes of this Part, the expression "unregistered company"—
(a) shall not include—
(i) a railway company incorporated under any Act of Parliament or other
Indian law or any Act of Parliament of the United Kingdom;
(ii) a company registered under this Act; or
(iii) a company registered under any previous companies law and not
being a company the registered office whereof was in Burma, Aden, Pakistan
immediately before the separation of that country from India; and
(b) save as aforesaid, shall include any partnership firm, limited liability partnership
or society or co-operative society, association or company consisting of more than
seven members at the time when the petition for winding up the partnership firm, limited
liability partnership or society or co-operative society, association or company, as the
case may be, is presented before the Tribunal.
376.Power to wind up foreign companies, although dissolved.
Where a body corporate incorporated outside India which has been carrying on
business in India, ceases to carry on business in India, it may be wound up as an unregistered
company under this Part, notwithstanding that the body corporate has been dissolved or
otherwise ceased to exist as such under or by virtue of the laws of the country under which
it was incorporated.
377.Provisions of Chapter cumulative.
(1) The provisions of this Part, with respect to unregistered companies shall be in
addition to and not in derogation of, any provisions hereinbefore in this Act contained with
respect to the winding up of companies by the Tribunal.
(2) The Tribunal or Official Liquidator may exercise any powers or do any act in the
case of unregistered companies which might be exercised or done by the Tribunal or Official
Liquidator in winding up of companies formed and registered under this Act:
Provided that an unregistered company shall not, except in the event of its being wound
up, be deemed to be a company under this Act, and then only to the extent provided by this Part.
378. Saving and construction of enactments conferring power to wind up partnership firm, association or company, etc., in certain cases.
Nothing in this Part, shall affect the operation of any enactment which provides
for any partnership firm, limited liability partnership or society or co-operative society,
association or company being wound up, or being wound up as a company or as an
unregistered company, under the Companies Act, 1956, or any Act repealed by that Act:
Provided that references in any such enactment to any provision contained in the
Companies Act, 1956 or in any Act repealed by that Act shall be read as references to the
corresponding provision, if any, contained in this Act.
