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

Petition for winding up of Kaveri Agro Ltd was presented on 5 June. On 20 June, without any Tribunal order, the company sold a godown to Mehta Traders. The Tribunal passed the winding-up order on 15 July. What is the status of the sale under the Companies Act, 2013?

The sale is void unless the Tribunal otherwise orders. Winding up commenced on 5 June when the petition was presented, and section 334 voids dispositions of company property made after that date, regardless of the later order date.

  1. AVoid, unless the Tribunal otherwise orders, as it was made after commencement of winding upCorrect
  2. BValid, because the winding-up order came only on 15 July
  3. CValid, because the buyer paid full consideration
  4. DVoid only if the liquidator challenges it within sixty days

Explanation

Commencement is 5 June (section 357). Section 334 makes any disposition of company property after commencement void unless the Tribunal otherwise orders. The 15 July order date is irrelevant, so the sale is not saved by it.

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