Under the provisions of the Companies Act, 1956, especially sections 433, 434 and 439 , a creditor has a right to file a winding up petition against a Company registered as a limited company under the Companies Act, 1956 provided, the amount of debt is not less than Rs.500/-. There is also, some criteria to be complied with before a petition for winding up petition is filed and in brief, it is as under.
1. The debt should be not less than Rs.500/-.
2. The debt should be admitted one and not disputed.
3. The debt should be live.
4. A 21 days statutory notice must have been issued and the debtor failed to repay the debt.
5. The object of the winding up petition should not be recovery.
6. You must also prove in some circumstances that, the company is commercially insolvent.
If the above criteria are complied with, a petition to wind up a company will lie. There is also a possibility that the Management of the company in order to save the company from being wound up may come for a compromise before the court in which event, the courts will grant time to the creditor to pay the debt provided the company proves its bonafides . If the creditor pays the debt, you can withdraw the petition and the Courts also normally allow the same as, the Courts will use the winding up as a last resort. The winding up petition should be filed in the High Court of the state where the Registered Office of the Company is situated. The court fee is quite nominal. As far time is concerned, there is no fixed parameter to say and it depends upon so many issues and minimum may be 6 months to 1 year and maximum varies depending upon the circumstances. In the first stage i.e., before the admission of the petition itself, the Court will look in to all aspects thoroughly as once, the petition is admitted, it will be followed by publication of notice of the petition to the General public in the News Papers which will cause grave injury to the company in the event, the winding up petition was later found to be not maintainable. If you are sure of the debt, you can therefore file a winding up petition.The other remedy is to file a civil suit for a decree.
Murali Krishna W