Winding-Up by Tribunal: formula sheet

Key formulas

Section 270: mode of winding up

Winding up under the Companies Act, 2013 = winding up by Tribunal, under Part I

Substituted by Act 31 of 2016, effective 15-11-2016. It is the only mode under this Act.

Omitted voluntary winding up sections

Sections 308, 309, 314 and 323 are omitted

Commencement, effect, liquidator's powers and costs of voluntary winding up. Omitted w.e.f. 15-11-2016. Voluntary liquidation is now under Section 59 of the IBC.

Section 280: jurisdiction of Tribunal

Tribunal hears: (a) suits or proceedings by or against the company; (b) claims by or against the company and its Indian branches; (c) applications under Section 233; (d) priorities and any other question of law or fact arising out of or relating to winding up

It applies notwithstanding any other law, and covers matters before or after the winding up order.

Section 226: investigation not stopped

Investigation continues despite Section 241 application, voluntary winding up resolution, or pending winding up before the Tribunal

If the Tribunal passes a winding up order, the inspector informs it of the pending investigation. Directors and employees are not absolved from participating or from liability.

Section 434: transfer of pending proceedings

Company Law Board matters and notified High Court or District Court winding-up proceedings move to the Tribunal

Only proceedings at a stage prescribed by the Central Government are transferred. Others continue under the 1956 Act and the Companies (Court) Rules, 1959.

Rule of commencement (Section 357)

Date of commencement of winding up by Tribunal = time of presentation of the winding up petition

Applies to winding up by the Tribunal under the Companies Act, 2013. Section 357 was substituted by Act 31 of 2016, w.e.f. 15-11-2016.

What it is not

Commencement date ≠ date of winding up order

The order is passed later. The commencement still relates back to the petition.

Nature of the date

Commencement = deemed date (a legal fiction)

The law treats winding up as begun at the petition, even though nothing has been ordered yet.

Section 279(1): the bar

Winding up order passed OR provisional liquidator appointed → no suit or legal proceeding commenced or continued, by or against the company, without leave of the Tribunal

Leave can be granted subject to terms the Tribunal imposes.

Section 279(1) proviso: time limit

Application for leave → disposed of by the Tribunal within 60 days

The limit binds the Tribunal, not the applicant.

Section 279(2): exception

Proceedings pending in appeal before the Supreme Court or a High Court → not covered by the bar

Applies only to appeals pending in those courts.

Section 289: status

Power of Tribunal on application for stay of winding up → omitted by IBC, 2016 (w.e.f. 15-11-2016)

Do not present it as a working power.

Section 373: Part XXI companies

Winding up order or provisional liquidator → no suit or proceeding against the company or any contributory for a debt of the company, except by leave of the Tribunal and on its terms

Applies to companies registered under Part XXI.

Section 334: post-commencement dispositions

Winding up by Tribunal + (disposition of property / transfer of shares / alteration in members' status) after commencement → void, unless Tribunal otherwise orders

Property includes actionable claims. Applies only to winding up by the Tribunal.

Section 335(1): attachments, executions and sales

Attachment, distress or execution put in force, or sale held, after commencement without leave of Tribunal → void

Leave must be obtained from the Tribunal. It must relate to the company's estate or effects.

Section 335(2): exclusion

Proceedings for recovery of any tax or impost or any dues payable to the Government → section 335 does not apply

The exclusion is in section 335 only. Section 334 has no such carve-out.

Section 329: look-back transfers

Transfer or delivery of goods within one year before petition or voluntary winding-up resolution, not in ordinary course or to good-faith purchaser for value → void against Company Liquidator

Backward-looking. Use it to contrast with sections 334 and 335.

Core rule of section 226

Investigation continues, and is not stopped or suspended by reason only of: (a) section 241 application; (b) special resolution for voluntary winding up; (c) any other winding up proceeding pending before the Tribunal

The words 'by reason only of' matter. The rule says these facts alone are no ground to stop an investigation.

First proviso

Winding up order passed in a clause (c) proceeding → inspector informs Tribunal of the pending investigation → Tribunal passes such order as it deems fit

The duty to inform lies on the inspector. The Tribunal decides what happens next.

Second proviso

Winding up order does not absolve any director or other employee from (i) participating before the inspector, or (ii) liability from the inspector's findings

Officers cannot refuse to cooperate by pointing to the winding up.

Fraud during winding up (section 282(3))

Report of fraud from Company Liquidator, Central Government or any person → Tribunal shall order investigation under section 210, without prejudice to winding up

Afterwards the Tribunal may pass orders and give directions under sections 339 to 342, or direct the Company Liquidator to file a criminal complaint.

Employee protection (section 218)

During investigation, to discharge, suspend, punish or worsen terms of an employee → obtain Tribunal approval; no objection within 30 days of application → may proceed

Appeal to the Appellate Tribunal within 30 days of receiving the Tribunal's objection notice.

Quick revision

• Section 270: Part I applies to winding up of a company by the Tribunal.
• Section 357: winding up by Tribunal is deemed to commence at presentation of the petition.
• Section 279(1): after a winding up order or appointment of a provisional liquidator, no suit or proceeding by or against the company without Tribunal leave.
• Section 279 proviso: a leave application must be disposed of within sixty days.
• Section 279(2): the stay does not apply to appeals pending before the Supreme Court or a High Court.
• Section 289 on stay of winding up is omitted by the IBC.
• Section 329: transfers within one year before the petition or voluntary winding up resolution are void against the Company Liquidator, unless ordinary course or good faith for valuable consideration.
• Section 334: dispositions, share transfers and member status changes after commencement are void unless the Tribunal orders otherwise.
• Section 335: attachment, distress, execution or sale after commencement without leave is void, but not for tax or Government dues.
• Section 226: investigation is not stopped by voluntary winding up or a pending winding up proceeding.
• Section 226 proviso: the inspector informs the Tribunal if a winding up order is passed, and directors stay liable to participate.
• Section 282(3): on a fraud report the Tribunal orders investigation under section 210.

Common mistakes

• Writing that the Companies Act, 2013 has three modes of winding up. Fix: Quote Section 270 as substituted in 2016: only winding up by Tribunal remains under this Act.
• Saying voluntary winding up is governed by Sections 308 and 309 of the Companies Act, 2013. Fix: State that Sections 308, 309, 314 and 323 are omitted w.e.f. 15-11-2016 and that voluntary liquidation is under Section 59 of the IBC.
• Treating the date of the winding up order as the commencement date. Fix: Remember that Section 357 fixes commencement at presentation of the petition. The order comes later.
• Using the date the company's members passed a resolution or the date of a creditor's notice. Fix: Check the mode first. Section 357 is only for winding up by the Tribunal.
• Treating Section 289 as a current power to stay winding up. Fix: State that Section 289 is omitted by the IBC, 2016 with effect from 15 November 2016.
• Applying the bar before any winding up order or provisional liquidator. Fix: Section 279 needs a winding up order or a provisional liquidator. Do not apply it earlier.
• Applying sections 334 and 335 to every mode of winding up Fix: Both sections refer to winding up by the Tribunal. Say so in your answer and check the mode in the facts.
• Saying the transfer is void with no exception under section 334 Fix: Always add: unless the Tribunal otherwise orders.
• Writing that winding up automatically ends the investigation. Fix: Remember the purpose is to fix responsibility. Section 226 says the investigation is not stopped or suspended by these facts alone.
• Dropping the words 'by reason only of'. Fix: Quote the phrase. It means these facts alone are not a ground to stop; it does not remove the Tribunal's powers under the first proviso.

Exam tips

• Open every answer on this topic with the current Section 270 position. It shows you know the 2016 change.
• Learn the four limbs of Section 280 as suit, claim, Section 233 application and priorities or other questions.
• Name the omitted sections 308, 309, 314 and 323 and point to Section 59 of the IBC when voluntary winding up appears.
• In case-based questions, write provision, analysis of facts, then conclusion in separate short paragraphs.
• Mention Section 434 only when the facts refer to proceedings pending from the 1956 Act era.
• Begin the answer by quoting the rule of Section 357 in one sentence. It is short enough to write almost verbatim.
• Write the commencement date explicitly and label the other dates as petition, hearing and order on a small timeline.
• Always add the contrast line: commencement is the petition date, not the order date.