Companies Act, 1973 (Act No. 61 of 1973)Chapter XV: Judicial Management427. Circumstances in which company may be placed under judicial management |
| 1) | When any company by reason of mismanagement or for any other cause- |
| a) | is unable to pay its debts or is probably unable to meet its obligations; and |
| b) | has not become or is prevented from becoming a successful concern, |
and there is a reasonable probability that, if it is placed under judicial management, it will be enabled to pay its debts or to meet its obligations and become a successful concern, the Court may, if it appears just and equitable, grant a judicial management order in respect of that company.
| 2) | An application to Court for a judicial management order in respect of any company may be made by any of the persons who are entitled under section 346 to make an application to Court for the winding-up of a company, and the provisions of section 346(4)(a) as to the application for winding-up shall mutatis mutandis apply to an application for a judicial management order. |
| 3) | When an application for the winding-up of a company is made to Court under this Act and it appears to the Court that if the company is placed under judicial management the grounds for its winding-up may be removed and that it will become a successful concern and that the granting of a judicial management order would be just and equitable, the Court may grant such an order in respect of that company. |