Companies Act Section 274 — Directions for filing statement of affairs
CHAPTER XX WINDING UP
Commercial / Corporate
Summary
Sub-section (1) covers what happens when someone other than the company itself files a winding-up petition. If the Tribunal is satisfied that there is a basic, prima facie case for winding up, it will order the company to file its objections along with a statement of its affairs within thirty days of that order, in the form and manner prescribed. The Tribunal may allow an additional thirty days if there are special circumstances or a contingency. Also, the Tribunal can require the petitioner to deposit a reasonable amount as security for costs before it issues directions to the company.
Sub-section (2) states the consequence of not filing the statement of affairs as required under sub-section (1). A company that fails to do so loses its right to oppose the winding-up petition. Additionally, the directors and officers found responsible for this non-compliance become liable for punishment under sub-section (4).
Sub-section (3) applies when the Tribunal passes a winding-up order under clause (d) of sub-section (1) of section 273. In that situation, the directors and other officers must, within thirty days of the order, submit the company's books of account to the liquidator. These books must be completed and audited up to the date of the order, and the submission must be at the company's cost and in the manner specified by the Tribunal.
Sub-section (4) sets out the penalty for any director or officer who contravenes the provisions of this section. The person in default is punishable with imprisonment for up to six months, or with a fine of not less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.
Sub-section (5) specifies who can file a complaint in this matter before the Special Court. The complaint may be filed by the Registrar, a provisional liquidator, a Company Liquidator, or any person authorised by the Tribunal.
Official Text
(1) Where a petition for winding up is filed before the Tribunal by any person other than the company, the Tribunal shall, if satisfied that a prima facie case for winding up of the company is made out, by an order direct the company to file its objections along with a statement of its affairs within thirty days of the order in such form and in such manner as may be prescribed:
Provided that the Tribunal may allow a further period of thirty days in a situation of contingency or special circumstances:
Provided further that the Tribunal may direct the petitioner to deposit such security for costs as it may consider reasonable as a precondition to issue directions to the company.
(2) A company, which fails to file the statement of affairs as referred to in sub-section (1), shall forfeit the right to oppose the petition and such directors and officers of the company as found responsible for such non-compliance, shall be liable for punishment under sub-section (4).
(3) The directors and other officers of the company, in respect of which an order for winding up is passed by the Tribunal under clause (d) of sub-section (1) of section 273, shall, within a period of thirty days of such order, submit, at the cost of the company, the books of account of the company completed and audited up to the date of the order, to such liquidator and in the manner specified by the Tribunal.
(4) If any director or officer of the company contravenes the provisions of this section, the director or the officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.
(5) The complaint may be filed in this behalf before the Special Court by Registrar, provisional liquidator, Company Liquidator or any person authorised by the Tribunal.