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

A winding up petition against Sundaram Realty Ltd was presented to the Tribunal on 10 March. The Tribunal passed the winding up order on 25 April. A private lender attached the company's godown on 5 April without the Tribunal's leave, and a sale of machinery was held on 20 March without leave. Which statement is correct?

Both are void. Winding up by the Tribunal is deemed to commence on presentation of the petition (10 March), and under Section 335 any attachment or sale of the company's property after that date without the Tribunal's leave is void. Neither event is a government dues recovery.

  1. ABoth the attachment and the sale are void, because winding up is deemed to commence on 10 March, the date of presentation of the petitionCorrect
  2. BBoth are valid, because winding up commences on 25 April
  3. CThe attachment is void but the sale is valid, because a sale cannot be challenged
  4. DThe attachment is valid but the sale is void, because attachments need no leave

Explanation

Section 357 deems winding up by the Tribunal to commence at the presentation of the petition, i.e. 10 March. Under Section 335(1), an attachment, execution or sale without leave of the Tribunal after commencement is void. Both events fall after 10 March, and the lender is not a government dues claimant.

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