MCA amend Companies (Transfer of pending proceedings) Rule, 2014 and Section 434 of Cos. Act 2013 to include 'voluntary winding-up' provisions of former Act

Voluntary winding up

·         The rule 4 is substituted which deals with the pending proceedings relating to voluntary winding up.

Proceedings relating to voluntary winding up where notice of the resolution by advertisement has been given under section 485(1) of the companies act, 1956, but the company have been not dissolved before 1^st day of April, 2017 shall continue to be dealt with in accordance with provisions of the Companies Act, 1956.

·         Third proviso inserted in Section 434 of the companies Act, 2013

Provided also that proceedings relating to cases of voluntary winding up of a company where notice of the resolution by advertisement has been given under sub-section (1) of section 485 of the Companies Act, 1956 but the company has not been dissolved before the 1st April, 2017 shall continue to be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959.

Winding up on ground of inability to pay debts

·         The rule 5 is also substituted which deals with transfer of pending proceedings of winding up on the   ground of inability to pay debts.

Winding up petitions under clause (e) of section 433 of Companies Act, 1956, on ground of inability to pay debts pending before High Court mandates petitioner to file information, other than information forming part of the records transferred in accordance with the rule 7 required for admission of the petition under sections 7, 8 or 9 of the code as the case may be including details of the proposed insolvency professional to the tribunal upto July 15, 2017 failing which the petition shall stand abated. It also provides for filing fresh application under sections 7 or 8 or 9 of Insolvency code after 15^th July, 2017.

It also provides that petitions relating to winding up which have not been transferred to the Tribunal and remain with the High Court and where there is another petition under clause (e) of section 433 of the Act for winding up against the same company pending as on December 15, 2016, such other petition shall not be transferred to the Tribunal, even if the petition has not been served on the respondent:

            MCA vide Removal of Difficulties clarified that since the Insolvency and Bankruptcy Code provides for a substantially different framework for persons who may be appointed as liquidators and for making of an application for dissolution by the liquidator. Proceedings relating to cases of voluntary winding up of a company where notice of the resolution by advertisement has been given under sub-section (1) of section 485 of the Companies Act, 1956 but the company has not been dissolved before the 1st April, 2017 shall continue to be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959.