On 3rd December, 2018 the Registrar of Companies applied to the Regional Director for seeking sanction to file a winding up application against a company. On next day i.e. on 4th December, 2018 the Regional Director gran

CS Executive · Company Law · PYQS · December 2018
On 3rd December, 2018 the Registrar of Companies applied to the Regional Director for seeking sanction to file a winding up application against a company. On next day i.e. on 4th December, 2018 the Regional Director granted its sanction. Examine the validity of Regional Director's action.

Answer & Explanation:

According to section 272(1) of Companies Act, 2013 a petition to the Tribunal for the winding up of a company can be presented by Registrar of Companies. However, Registrar shall obtain the previous sanction of the Central Government to the presentation of a petition. The section also provides that the Central Government shall not accord its sanction unless the company has been given a reasonable opportunity of making representations. The power of Central Government in this context has been delegated to Regional Directors. In the given case Regional Director granted its sanction on the very next day of filing of the petition without giving reasonable opportunity to the company of being heard. Here the action of Regional Director is invalid.

Topics: Winding Up

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