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Article
Payment Sequence in Winding Up: A Critique of Corporate Insolvency
The Icfai Journal of Corporate and Securities Law, (2008)
  • Dyutimoy Mukherjee, Hidayatullah National Law University
  • Jeevan Ballav Panda, Hidayatullah National Law University
Abstract
This paper mainly attempts to rediscover the requirements regarding the proof of debts and understand the sequence of payments in the winding up of a company under the various provisions of the Companies Act, 1956. Since winding up essentially involves distribution of assets and payment of debts, it is obvious that issues like proof of liabilities and the corresponding sequence of payments are bound to arise. Chapter V of Part VII of the Companies Act, 1956 lays down the provisions applicable to every mode of winding up thereby dealing with the proof and ranking of claims. The paper analyzes the Companies Act, 1956 in the light of the English perspective under the Provincial Insolvency Act, 1920 and the Presidency Towns Insolvency Act, 1909. Furthermore, it discusses the position with reference to various landmark judicial pronouncements. The paper concludes by raising some fundamental questions about the flaws in the procedural aspects and proposes a practicable scheme which can be adopted depending on the facts and circumstances of the particular winding up matter.
Disciplines
Publication Date
May, 2008
Citation Information
Dyutimoy Mukherjee and Jeevan Ballav Panda. "Payment Sequence in Winding Up: A Critique of Corporate Insolvency" The Icfai Journal of Corporate and Securities Law, Vol. 5 Iss. 2 (2008)
Available at: http://works.bepress.com/dyutimoy_mukherjee/6/