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

Tribunal appointed a provisional liquidator for Himalaya Pharma Ltd, a company registered under Part XX of the Companies Act, 2013, though no final winding up order has yet been made. A creditor wants to sue the company and a contributory for a company debt. What is the position?

The creditor needs the Tribunal's leave to sue both the company and the contributory. For a registered company, appointment of a provisional liquidator already triggers the stay on suits for company debts, and the Tribunal may impose terms when granting leave.

  1. ANo leave is needed until the final winding up order is made
  2. BLeave is needed only for the suit against the company, not against the contributory
  3. CLeave of the Tribunal is needed for the suit against both, on terms the Tribunal may imposeCorrect
  4. DThe suit is barred absolutely and cannot be allowed even with leave

Explanation

For a registered company covered by this Part, once a winding up order is made or a provisional liquidator is appointed, no suit for a company debt can be commenced or proceeded with against the company or any contributory except by Tribunal leave and on its terms. Appointment of the provisional liquidator is enough to trigger this.

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