Section 583 - Winding up of unregistered companies. - Companies Act, 1956

Winding up of unregistered companies. 583. (1) Subject to the provisions of this Part, any unregistered company may be wound-up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in sub-sections [1] [(3)] to (5). [2] [(2) * * *] (3) No unregistered company shall be wound-up under this Act voluntarily [3] [by the Tribunal]. (4) The circumstances in which an unregistered company may be wound-up are as follows: (a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; (b) if the company is unable to pay its debts; (c) if the [4] [Tribunal] is of opinion that it is just and equitable that the company should be wound-up. (5) An unregistered company shall, for the purposes of this Act, be deemed to be unable to pay its debts ____ (a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by leaving at its principal place of business, or by delivering to the secretary, or some director, [5] [* * *] manager or principal officer of the company, or by otherwise serving in such manner as the [6] [Tribunal] may approve or direct, a demand under his hand requiring the company to pay the sum so due, and the company has, for three weeks after the service of the demand, neglected to pay the sum or to secure or compound for it to the satisfaction of the creditor; (b) if any suit or other legal proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character of member, and notice in writing of the institution of the suit or other legal proceeding having been served on the company by leaving the same at its principal place of business or by delivering it to the secretary, or some director, [7] [* * *] manager or principal officer of the company or by otherwise serving the same in such manner as the [8] [Tribunal] may approve or direct, the company has not, within ten days after service of the notice, ___ (i) paid, secured or compounded for the debt or demand; or (ii) procured the suit or other legal proceeding to be stayed; or (iii) indemnified the defendant to his satisfaction against the suit or other legal proceeding, and against all costs, damages and expenses to be incurred by him by reason of the same; (c) if execution or other process issued on a decree or order of any Court [9] [or Tribunal] in favour of a creditor against the company, or any member thereof as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied in whole or in part; (d) if it is otherwise proved to the satisfaction of the [10] [Tribunal] that the company is unable to pay its debts. -------------------------------------- Notes:- [1] Substituted for "(2)" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [2] Omitted by the Companies (Second Amendment) Act, 2002. Prior to omission, sub-section (2) it read as under: "(2) For the purpose of determining the Court having jurisdiction in the matter of the winding up, an unregistered company shall be deemed to be registered in the State where its principal place of business is situate or, if it has a principal place of business situate in more than one State, then, in each State where it has a principal place of business; and the principal place of business situate in that State in which proceedings are being instituted shall, for all the purposes of the winding up, be deemed to be the registered office of the company." [3] Substituted for "or subject to the supervision of the Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [4] Substituted for "Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [5] Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000, as provisions relating to managing agents, secretaries and treasures had become redundant after abolition of system by Act 17 of 1969. [6] Substituted for "Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [7] Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000, as provisions relating to managing agents, etc. had become redundant after abolition of system by Act 17 of 1969. [8] Substituted for "Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [9] Inserted by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. [10] Substituted for "Court" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified.