Introduction on Winding Up :
Clarification on Companies (Second Amendment) Act, 2002
[Notification issued by Ministry of Finance and Company Affairs (Department of Company Affairs) vide F. No. 1/1/2003-CL.V dated 9.9.2003].
The Companies (Second Amendment) Act, 2002 (11 of 2003) received the assent of the President of India on 13.1.2003. Government has decided to bring into force the provisions of section 2 and 6 of the Companies (Second Amendment) Act, 2002 (11 of 2003) with effect from 1.9.2003. Notification has been published in the Official Gazette dated 31st March, 2003 as S.O.344 (E). This has been notified to enable the Government to initiate necessary steps to establish National Company Law Tribunal and make it operational.
For the sake of clarity it is stated that this Notification bringing into effect section 6 of the Companies (Second Amendment) Act, 2002 (11 of 2003) will only set in motion all preliminary steps required for establishment of National Company Law Tribunal. Upon establishment of the same a separate Notification regarding constitution of NCLT will be issued. Till such time, jurisdiction of Company Law Board will continue to remain unchanged.”
We bring to the attention of students that though the Companies (Second Amendment) Act, 2002 has been passed by the Parliament, only a few provisions (Section 2 and 6) have been notified so far. In other words, despite, the Sick Industrial (Special Provisions) Act, 1985 [SICA] has been repealed, all the provisions of the said Amendment Act, 2002 have not come into force. The reason being though the Government has constituted the National Company Law Tribunal (NCLT) which shall deal with winding-up and rehabilitation of sick companies it has not yet become operational.
In view of the above situation, the provisions relating to winding-up of companies as contained in the legislation prior to the amendment are still having relevance and in view of the fact that entire provisions of the Companies (Second Amendment) Act, 2002 have not come into force, the provisions of the Amendment Act has not been included in this chapter.