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Query may 16
some solution in munish bhandari book CA Final is different as given by ICAI in practice manual? which one to follow for exam purpose.
Replies (4)
can u pls specify which solution is different ??
As per munish bhandari book treatment of floating charge invalid is same in case of both members voluntary winding up or creditors voluntary winding up.
As per practice manual
*In case of members voluntary winding up- floating charge valid on entire debt (including pre existing debt)
*In case of creditors voluntary winding up- valid on advances made subsequent to creation of charge.
As per munish bhandari book treatment of floating charge invalid is same in case of both members voluntary winding up or creditors voluntary winding up.
As per practice manual
*In case of members voluntary winding up- floating charge valid on entire debt (including pre existing debt)
*In case of creditors voluntary winding up- valid on advances made subsequent to creation of charge.
just remember the Concept of floating charge :- Validity & invalidity depends upon facts & circumstances of each case:-
As per section 534 :- any floating charge created within 12 months of commencement of winding up will be treated as invalid
Exception :- if it is proved that co. was solvent after creation of charge then that shall be valid...
As per PM:- If official liquator is able to prove that co. was insolvent then also co. created floating charge & hence INVALID.....
Volutarily WU possible only when co. is solvent & creditors voluntarily wu means co. is insolvent
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