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CS Professional · Corporate Restructuring, Valuation and Insolvency · Winding-up by Tribunal under the Companies Act, 2013

Before any winding up order was passed against Desai Exports Ltd, the Tribunal appointed a provisional liquidator. Rao Logistics now wants to file a fresh suit against the company. What is the position under section 279(1)?

The suit needs the Tribunal's leave. Section 279(1) applies equally where a provisional liquidator has been appointed, so no suit may be commenced against the company without the Tribunal's leave and on such terms as it may impose, even before a winding up order.

  1. AThe suit needs the Tribunal's leave, as the stay also applies once a provisional liquidator is appointedCorrect
  2. BThe suit can be filed freely because no winding up order exists yet
  3. CThe suit is barred absolutely and leave cannot be granted
  4. DThe suit can be filed only with the Registrar's permission

Explanation

Section 279(1) applies when a winding up order has been passed or a provisional liquidator has been appointed. So leave of the Tribunal is needed even without a final order. It is not an absolute bar, since leave may be granted on terms.

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