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

During winding up of Himalaya Infra Ltd by the Tribunal, the Company Liquidator reports that the former promoters diverted funds. Acting on this report, the Tribunal wants to act under section 282(3). Which course is correct?

The Tribunal must order an investigation under section 210 without prejudice to the winding up. On the investigation report it may give directions under sections 339 to 342 or direct the Company Liquidator to file a criminal complaint against those involved in the fraud.

  1. AIt must first complete the winding up and only then consider any investigation
  2. BIt must refer the matter to the Registrar, who alone may order an investigation
  3. CIt must order investigation under section 210, without prejudice to the winding up process, and on the investigation report may give directions under sections 339 to 342 or direct the liquidator to file a criminal complaintCorrect
  4. DIt may only direct the liquidator to file a criminal complaint, with no investigation

Explanation

Section 282(3) says that on a report of fraud from the liquidator, the Central Government or any person, the Tribunal shall order investigation under section 210 without prejudice to the winding up. After considering the report it may pass orders under sections 339 to 342 or direct a criminal complaint. Complaint without investigation or waiting for completion is not the sequence provided.

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