Winding up signifies a settlement of the accounts and liquidation of the assets of a partnership or corporation, for the purpose of making distribution and dissolving the concern .A company is done by paying the company's creditors , and then distributing any money left among the members . Generally, a winding up of a company can occur if the company is bankrupt. It also can be wound up by court order when a company does not pay outstanding debts or by voluntary wind up.
Under just and equitable ground, a company can be wound up if there is a deadlock in the management which cannot be resolved by internal company machinery or it becomes impossible to pursue the main substratum or the objects of the company and where a company is in substance an incorporated partnership and there are grounds on which a partnership could be dissolved. ….. [Nestle SA vs. ID Kansal (1995) 57 Del LT 329 at 335].
Proceedings of winding up under the Companies Act in a different forum, is alto¬gether different from the proceedings under Chapter XVIII of the Negotiable Instruments Act. While section 138, 139, 140, 141 of Negotiable Instruments Act purports to im¬pose penalties in case of dishonor of cheques, object of a petition for winding up of a company is to pay its debts out of its realizable assets—the Companies Act, 1994 (XVIII of 1994), Section 241 (v). ….. [Mr. Amir Hossain V. Homeland Foot¬wear Ltd. and others, 22 BLD (HCD) 641]