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CS Professional · Insolvency and Bankruptcy - Law and Practice · Winding-Up by Tribunal

A winding-up petition against Kaveri Metals Ltd is pending before the Tribunal while an inspector is investigating the company. The Tribunal then passes a winding-up order. What must the inspector do under the first proviso to section 226?

The inspector must inform the Tribunal about the pendency of the investigation before him once a winding-up order is passed. The Tribunal then passes whatever order it considers fit. The investigation does not close automatically.

  1. AClose the investigation and hand over the records to the Company Liquidator
  2. BInform the Tribunal about the pendency of the investigation, after which the Tribunal passes such order as it deems fitCorrect
  3. CSeek fresh approval from the Central Government to continue
  4. DWait for the Registrar to certify that the investigation can continue

Explanation

The first proviso to section 226 requires the inspector to inform the Tribunal of the pending investigation when a winding-up order is passed. The Tribunal then passes such order as it deems fit. Automatic closure is not provided.

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