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

A winding-up petition against Kaveri Textiles 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?

The inspector must inform the Tribunal about the pending investigation. Under the first proviso to section 226, where a winding-up order is passed in a pending proceeding, the Tribunal then passes whatever order it considers fit; the investigation does not close automatically.

  1. AClose the investigation immediately and hand over records to the Company Liquidator
  2. BInform the Tribunal about the pendency of the investigation, and the Tribunal passes such order as it deems fitCorrect
  3. CSeek fresh approval from the Central Government before continuing
  4. DContinue silently, since the Tribunal has no role in the investigation after winding up

Explanation

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

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