"Inability to pay debts was generally a ground for moving an application for winding up of a Company under the Companies Act, 1956. But such a ground no longer exists under the Companies Act, 2013". State the circumstanc

One of the salient features of the winding-up provisions of the Companies Act, 1956 was the power of the Court to wind-up the company being "unable to pay its debts" under section 433(e) of the said Act. There is a significant departure in Companies Act, 2013 in which Section 272 is amended by the Insolvency and Bankruptcy Code, 2016. Accordingly, a company may be wound-up by National Company Law Tribunal under Section 271: if the company has, by special resolution, resolved that the company be wound-up by the Tribunal; if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality; if on an application made by the Registrar or any other person authorised by the Central Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound-up; if the company has made a default in filing with the Registrar its financial statements or annual returns for immediately preceding five consecutive financial years; or if the Tribunal is of the opinion that it is just and equitable that the company should be wound-up.