Part IV

Winding up by Tribunal

25. Inability to pay Debts

For the purposes of clause (c) of section 64, an LLP shall be deemed to be unable to pay its debts—
(a) if a creditor, by assignment or otherwise, to whom the LLP is indebted for an amount exceeding one lakh rupees then due, has served on the LLP, by causing it to be delivered at its registered office, by registered post or otherwise, a demand requiring the LLP to pay the amount so due and the LLP has failed to pay the such amount within twenty-one days after the receipt of such demand or to provide adequate security or re- structure or compound the debt to the reasonable satisfaction of the creditor;
(b) if any execution or other process issued on a decree or order of any Court or Tribunal in favour of a creditor of the LLP is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the Tribunal that the LLP is unable to pay its debts, and, in determining whether a LLP is unable to pay its debts, the Tribunal shall take into account the contingent and prospective liabilities of the LLP.