Section 390 interpretation

[csarengarajan]

Brief interpretation of Company under companies Act, 1956

 

In a nutshell, the defintion section 2 (10) defines company means a company defined in Section 3.

 

As per Section 3 of the Companies Act, 1956, "company" means a company formed and registered under this Act or an exisiting  company as defined in clause (ii)

 

Whereas Section 390 of the Companies Act, 1956 the word, "any company liable to be wound up under this Act.

 

It means the following companies are also to be included

 

1) unregistered company as per Section 582 of the Companies Act, 1956

 

ii)  Companies registered outside India as per Section 591 of the Companies Act, 1956 .

 

 

                       

In Section 390 , the word  " any company liable to be wound up under this Act,

 

The expression "company" means ‘any company liable to be wound up under this Act’. As per Section 390(a) of the Act, "company" includes even an unregistered company under Section 582 of the Act   As per Section 582 of the companies act, the unregistered company  shall not include

 

i)  a railway company incorporated by any act of parliament or other Indian law or any Act of Parliament of the United Kingdom

ii)  a company registered under this act or

iii)  a company registered under any previous companies law and not being a company the registered office  whereof was in Burma, Aden or Pakistan immediately  before the  separation of this country from India  and

b)  save as aforesaid  shall include any partnership, association or company consisting  of more than  severn members (at the time when the  petition for winding up the partnership, association or company, as the case may be , is presented  before the (Tribunal)

 

 

 

 

 [Malayalam Plantation India Limited & Harrisons & Crossfields India Limited in Re. (1985) 2 Comp. LJ 409 (Ker.)].

 

 It includes companies incorporated outside India, having business operations in India under Section 591 of the Act. Simply stated, the word ‘any company liable to be would up’ means a company to which the provisions relating to winding up apply. [Khandelwal Udyog Ltd. and Acme Manufacturing Limited In Re. (1977) 47 Comp. Cas. 503 (Bom).

 

Thus, the expression in Section 390 (a) covers all companies registered under the provisions of Companies Act, 1956, as also all unregistered or other companies in respect of which winding up orders can be made by a court under the provisions of the Act.

 

However, it is not necessary that the company should be in actual winding up i.e. the section can apply even to a company which is a going concern. [Bank of India Ltd. v. Ahemadabad Manufacturing & Calico Printing Co. Ltd., (1972) 42 Comp. Cases 211 (Bom.)].