Winding up Cases under Company Law?

The process of winding up involves a business’s dissolution. When a commercial organization winds up, it ceases to operate normally. The typical objectives are to dispose of stock, settle debts, and transfer any remaining assets to partners or shareholders. The phrase is mostly used in the UK, where changing assets into cash is known as liquidation. In other words, this process creates a cash pool that a company can use to pay off debts and other outstanding bills before dividing the remaining funds among shareholders, corporate members, investors, and other investors. A receiver, often known as a “liquidator,” may be chosen to oversee the asset distribution procedure.

Amin Md. Vs. Bengal Shipping Line Ltd., 50 DLR ( 2008) p. 444

The concern to protect the goodwill of a Company as well as the interests of Al and other shareholders have concomitantly led to the development of substantial jurisprudence endorsing the view that even admission of winding up applications is to be granted sparingly and not as a matter of rule.

Dira Dockyard and Engineers Ltd Vs. Bangladesh Shilpa Rin Shongstha and others, 10 BLC (AB) 131

The contention that the decree obtained by respondent no. 1 was not capable of execution and the process of realization of debt has become barred by law and as such order of winding up and liquidation of the Company was not legally maintainable is of no substance since the no such contention was taken before the High Court Division nor any particulars have been placed before the Appellate Division to substantiate the aforesaid contention.

AIR 1955 Bom 355 (DB)

In such a case the motive of the petitioners in filing the petition is entirely irrelevant and should not be taken into consideration.

Moksudur Rahman Vs. Bashati Property Development Ltd., 5 BLC 245

Half of the board comprises the petitioner, rather out of the 4 directors two are the petitioners who have half 50% of the shares and hence the petitioners who had held 50% of the shares and hence petitioners are not entitled to invoke the jurisdiction of the court under section 233 of the Companies Act, 1994. 

Rohimuddin Ahmed Vs. Bengal Water Ways Ltd., (1979) 31 DLR 28

Some grounds which justify the dissolution of the company: Section 162 of the Companies Act, 1913 (corresponding to sec 241 of the Companies Act, 1994) provides for the winding up of a company on six grounds, three of which are quoted below as they are found present in this case: (iv) if the default is made in filing a statutory report or in holding statutory meetings, (v) if the company is unable to pay its debt, (vi) if the Court is of opinion that it is just and equitable that the company should be wound up.

 Prime Finance & Investment Ltd Vs. Delwar H Khan, 15

The High Court Division was very much conscious of the board fact of the huge loan liabilities of the Company and was of the view that the same has to be put at a halt and also considering the provision of section 241 (v) (vi) of the Companies Act deemed it just and equitable that the Company should be ordered to be wound up. Accordingly, allowed the application for winding up of the Company and appointed the official receiver as the liquidator, and passed other incidental orders.

AIR 1966 Andh Pra 285 (DB)

Where the averments in the petition, which are substantiated by the evidence, disclose a total disability of the company to pay off creditors, an ever-increasing burden of interest, and control of business owing to sharp differences between the shareholders the court is fully justified in passing an order for winding up.

Ellal Textile Mills Ltd. Vs. Abdul Awal, 38 DLR (AD) 26

The winding up matter is a serious affair. The winding-up matter is a serious affair that is evident from the perusal of the entire Part V of the Act and in this connection, the anxiety of the Privy Council in the case of an unjustified winding-up order may be noticed. 

AIR 1955 Mad 582 (DB)

The winding up of a company is in the discretion of the Court which it may refuse to exercise having regard to the wishes of the majority or on the ground that it is beneficial only to the petitioning creditor and not to all the creditors generally.

Bangladesh Tyres Ltd. Vs. Agrani Bank & others, 42 DLR 474

A limited company is a juristic person, who lives, runs, and functions under the provisions of a statute; a death warrant can be issued under the same statute. The death warrant in the form of winding up should be sparingly issued. Last-minute efforts should be made to save a company from liquidation.

Yunus Bhuiyan & Others Vs. Bashati Property Development Ltd., 4 BLC 249

Winding up of the company on just and equitable ground- Since there is total, misunderstanding among the directors and total deadlock in the business of the Company and since there is no change of any compromise in between the two groups of Directors, the Company is liable to be wounds up on just and equitable ground and for ends of justice and also for benefit for all concern.

Bengal Waterways Ltd. Vs. Rahimuddin Ahmed (1982) 34 DLR (AD) 47

A private limited company can also be wound up on the principles of dissolution of partnership.

A. Gaffer Ltd Vs. Enjari Garments (Pvt) Ltd., 8 BLT (HCD) 295

The respondent admitted that a sum of TK. 9,55,941.00 was due to the petitioner up to November, 1997 out of which the respondent paid a total sum of TK 1,00,000.00 thereby the admitted liability of the respondent No. 1 to the petitioner is TK 8,55,941.00- Held: the respondent company is unable to pay its admitted debt of TK. 8,55,941.00 and as such it is liable to be wound up.

Rahimuddin Vs. Bengal Watennays Ltd. (1974) 26 DLR 285

Application for winding up of a private limited company (run by two share-holders) rejected there being no ground that it is just and equitable to do so. But special circumstances of the case demanded an assurance from the respondent that he will act in a way which does not in any manner affect the interest of the other sharer.

(1968) 1 Comp. LJ 253 (Cal)

Where alternative remedies are available to the petitioner for the redress of his grievance under the provisions of the Act it is not just and equitable to order winding up.

Bangladesh Shilpa Bank Vs. M/s. S.S. Mujibullah (1977) 29 DLR 67

No occasion arises for invoking the provision of section 162 of the Companies Act when all the assists and property of the mortgagor companies are assigned and mortgaged to the Bank and specific remedies and procedures are provided in P.O. 129 of 1972. A temporary inability to repay the debt should not be an occasion for winding up of a company, that is opposed to the State’s policy.

Moushumi Industries Ltd & others Vs. Asad Ahad and others, 24 BLD (AD) 72

The loan was not the personal loan of the directors but of the company. The company should have paid the petitioners the outstanding amount. The petitioners are creditors, and this entitles them to a winding-up order.

Amin Scales Ltd. Vs. Md. Yakub, 39 DLR (AD) 201

Great care should be taken in admitting an application followed by usual notices in gazettes and newspapers is likely to create alarm in the minds of all creditors of the company, divest its customers away and paralyze its business.

PLD 1990 SC 763

Discretion of Court to refuse to make an order for winding up of the company when can be exercised. Where the company was undisputedly running in loss year after year and the mills of the company were closed since 1983. The Court was justified in coming to the conclusion that it was just and equitable that the company be wound up.

Bangladesh Tyres Ltd. Vs. Agrani Bank & others, 42 DLR 474

Maintainability of the application for winding up on grounds of inability to pay debts was challenged upon a counterclaim of money by the appellant company. The Court found the counter-claim to be just an allegation, no evidence having been placed before the Court in support of the counter-claim. Such a counter-claim was not acceptable.

Bashati Property Development Ltd Vs. Younus Bhuiyan & Others, 4 BLC (AD) 236

Respondent No. 1 has made out a strong case for winding up which has been accepted by the learned Company Judge against which the petitioners now want to fall back upon their supplementary affidavit and application under section 233 of the Companies Act which they did not press before the learned Company Judge during the ultimate hearing nor are they aggrieved by non-consideration of these documents by the learned Company judge.

Motiur Rahman Vs. May Industries Ltd., 37 DLR 41

Winding up order of a company must be passes on the basis of subsisting facts and not on what they had been in the best.

Sayeda Haque Vs. Shams Ltd and others, 6 MLC 748

Since the Shams Limited company should never carry on its business and there is no possibility for it to carry on business in future, it would be just and equitable to pass an order for winding up of the company and the official liquidator shall take up the assets of the company and proceed with liquidation proceeding in accordance with law.

Nizamul Haqque and others Vs. Singa-Bangla Garment Manufacturing Co. (Pvt. Ltd.) BLD 1991 (HCD) 49

Neglect to pay rent-petition for winding up can be made on failure or neglect to pay rent maintainable. As the company is unable to pay its admitted liability and the formalities in filing the application have been observed and in view of the matter the company is liable to be wound up.

Mazharul Haque Vs. Bulk Management (Bangladesh) Ltd. and others, 48 DLR 453

The petitioner having not shown how he would derive any advantage or minimize some disadvantage from winding up of the respondent company he has no locus standi to petitioner for its winding up.

        Abdul Hamid 1’s. Dhakeswari Cotton Mills Ltd. & another, BCR 1983 HCD 320

Held, No provision of the companies Act relating to the winding up of the companies shall apply to any scheduled industrial enterprise under P.O. No. 27 of 1972.

Consumer Testing Laboratories Ltd Vs. Registrar Joint Stock Companies & Firms, 16 BLC 224

Referring to the provision of section 253 of the Act, learned Advocate for the petitioner submits that the Court has empowered to stop the winding up process altogether, if it deems fit to do so. The winding up proceeding in respect of Consumer Testing Laboratories Limited is directed to handover the assists and properties, both moveable and immovable, of the Company to the shareholders within a period of four weeks from the date of receiving the certified copy of this order.

Cathay Pacific Airways Limited Vs. Vantage International Limited, 30 BLD (HCD) 589

The application for winding up of the company stands allowed. In the instant case, there is no denial by the company that it did not receive the sale proceeds against sale of passenger tickets and cargo freight on behalf of the petitioner. Furthermore, the company has not disowned the Statements issued by it for the month of October, November and December, 2006, but merely disputes the authority of the concerned official to sign the Statements in question and further claims that such Statements have been issued by the concerned officer at the behest of the petitioner to take undue advantage of the situation.

Ella Textile Mills Ltd Vs. Md Abdul Awal, 38 DLR (AD) 26

Prayer for rectification of share-register—Where a winding up order is passed, rectification prayer must be refused.

Amir Hossain Vs. Homeland Footwear Ltd and others, 55 DLR 478

An order of winding up of a company can be made in the discretion of the court but under section 250 of the Act, when a winding up order has been made, no suit or other legal proceedings shall be proceeded with or commence against the company except by leave of the court. If the proceeding under section 241 of the Companies Act satisfies the requirements of law, it shall certainly find its mark in accordance with law and shall not be disallowed or deviated because of other equally efficacious remedies available to the petitioner in another forum.

BRTC Vs. Ashraf Jute Mills Ltd, 45 DLR 282

When a proceeding before the High Court Division is pending under section 162 of the Companies Act, the fate of the Company with all assets and liabilities as well as rights of all creditors, secured or otherwise, and the shareholders are subjudice before the court.

Eastern Bank Limited Vs. Bangle Carpets Ltd., 48 DLR 392

From the conduct of the respondent company and in the manner promises were made, assurances given new repayment schedules chalked out again and again only to be broken giving the impression that the affairs of the company are not clean and above board, the opinion is that the respondent company is unable to pay its debt and it will be just and equitable if the company is wound up. Hence, it is ordered that the respondent company is wound up with immediate effect.

Thai Airways International Limited Vs. Air Route Service Limited and others, 48 DLR 412

The respondent company is out and out a defaulter and is unable to pay the debt. After considering the materials on record and submission made by the Advocate for the petitioner it appears that it is just and proper that the respondent company be wound up.

Vega Sweater (Pvt.) Ltd. & Anr. Vs. Agrani Bank, 8 BLT (HCD) 226

The company is a Private Limited Company- the quorum necessary for the transaction of the business of the Directors shall be two- since the Articles of Association of the company provides that the business of the Board of Directors, is two, the company has been unable to do any business. And the business of the company has been stopped for more than one year. The company in its present state of affairs is unable to pay its debt and it is just and equitable that the company should be wound up.

Md Ismail Siddique Vs. Messrs Crescent Apparels (Private) Ltd., 43 DLR 99

The Court is to examine the case as a whole on the basis of given materials. There is no scope for rectification of the share register under section 38 of the Act as suggested on behalf of the respondent when the petitioner has founded his case for winding up the company.

Tamanna-e-Jahan Vs. Paper Converting & Packaging Ltd. & Ors., 10 BLT (HCD) 450

Petitioner is the publisher of a magazine and respondent No. 1 is a limited liability Company involved in the business of publishing, printing, and packaging- Held: there exists a bonafide dispute relating to the existence of the debt and the amount of debt and to determine the same winding up process is not available to the petitioner.

Bangladesh Consumers Supplies Co Ltd Vs. Registrar, Joint Stock Co., 46 DLR 552

Government, while doing commercial or trading business through a company, does not function as a department or organ of the government in its administrative capacity and such a company satisfies all the qualifications of the company within the meaning of the Companies Act and the petition for its winding up is competent.

Ambala Cold Storage (Pvt) Ltd. Vs. Prime Insurance Co. Ltd, 56 DLR 422

Section 241 & 242- The claim is not undisputedly ascertained and unless it is admitted it cannot be said it is a debt and the respondent company is liable to pay the debt. Winding up of a company by Court for Debt is not called for where there is a bonafide dispute relating to the existence of the debt.

SMM Yusuf Vs. Bismillah Shipping Lines (Pvt.) Ltd. & Ors., 5 BLC 603

Admittedly, no Annual General Meeting or any other meeting has been held since the incorporation of the Company about 14 years ago and no return has been submitted to the Register of Joint Stock Companies and the heirs of the deceased shareholder have not been included as members of the company and it has turned into a non-man company right from the beginning and such circumstances it is just and equitable that the company should be wound up.

Concluding remarks: 

Counsels Law Partners-CLP is a full-service law firm. CLP has a highly professional team of lawyers who provides legal services and consultation to its local and international clients with its diverse areas of practice. It considers every client valuable and provides instant legal solutions to all kinds of problems. Hence, if you need any advice, assistance, or consultation, feel free to visit us at our Chambers or Contact us via email at or call on +8801700920980 (WhatsApp).


Call Now