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CS Professional · Insolvency and Bankruptcy - Law and Practice

Winding-Up by Tribunal: CS Professional Guide

Winding-up by Tribunal is the court-supervised process of ending a company under the Companies Act, 2013. It is deemed to commence on presentation of the petition (section 357). You solve questions by finding the stage, applying the matching section on stay, void transfers or investigation, then concluding.

What this chapter covers

This chapter covers how a company is wound up by the Tribunal under the Companies Act, 2013, after the Insolvency and Bankruptcy Code, 2016 took over much of the older law. Section 270 now says Part I provisions apply to winding up by the Tribunal. Several old sections were substituted or omitted from 15-11-2016, so you must read the current text, not older notes.

The chapter is built around timing. The date winding up commences (section 357) decides which later rules bite: void dispositions (section 334), void attachments and sales (section 335), look-back on transfers (section 329), and stay of suits (section 279). Investigation under section 226 runs alongside all of this.

It links to the rest of Elective 7.5 because you must separate winding up under the Companies Act from the corporate insolvency process and liquidation under the IBC. Questions often test whether you can pick the right route and the right consequence on the given facts.

Elective papers are written, case-based and open book, so marks go to correct application, not memory alone. This chapter is rule-dense, with short sections that have exact conditions, such as the sixty-day limit in section 279 or the one-year look-back in section 329. A student who states the rule, ties it to the facts and concludes cleanly can score well here with modest effort. It also sharpens the timing logic you need for the liquidation chapters.

Winding-Up by Tribunal: topics in the order to study them

  1. 1Modes of Winding Up and Jurisdiction of TribunalStart with the frame: section 270 and the shift to the IBC tell you which provisions are still live.
  2. 2Commencement of Winding Up by TribunalSection 357 fixes the commencement date, and every later rule is measured from it.
  3. 3Stay of Winding Up and Stay of SuitsOnce you know the date, learn what happens to suits under section 279, and note that section 289 is omitted.
  4. 4Avoidance of Transfers, Attachments and ExecutionsSections 329, 334 and 335 depend on commencement and on the winding up order, so they come after the earlier topics.
  5. 5Investigation Proceedings During Winding UpSection 226 is a standalone rule best read last, once you see how winding up and other proceedings interact.

How to prepare Winding-Up by Tribunal

Treat this as a sequence of short sections. Your aim is to state each rule exactly and apply it to a date line of facts.

  1. Read each section from the official text once, slowly, and underline the trigger, the effect and any exception.
  2. Build a timeline on one page: look-back period, petition presentation, commencement, provisional liquidator or winding up order, and later events. Mark which section applies at each point.
  3. Note the contrasts: section 279 applies once an order is passed or a provisional liquidator is appointed, while section 334 and 335 depend on commencement.
  4. Learn the exceptions word for word, such as the ordinary course of business and good faith purchaser exception in section 329, and the tax and Government dues exception in section 335(2).
  5. Practise case questions in the format of provision, analysis of facts, conclusion. Write two or three each for stay, void transfers and investigation.
  6. Check which provisions were substituted or omitted by the IBC and write them in a short list so you never rely on old law.
  7. Revise using the timeline and the quick points, then re-attempt one case without notes.

Common mistakes in Winding-Up by Tribunal

  • Using the winding up order date instead of the petition date as commencement.

    Fix: Remember section 357: commencement is the time of presentation of the petition. Then apply sections 334 and 335 from that point.

  • Mixing the triggers for stay of suits and void transfers.

    Fix: Section 279 is triggered by a winding up order or a provisional liquidator. Sections 334 and 335 run from commencement. Name the trigger first in every answer.

  • Forgetting the exceptions.

    Fix: Always write the exception: section 279(2) for appeals, section 329 for ordinary course and good faith sales, section 335(2) for tax and Government dues, and the Tribunal's power in section 334 to order otherwise.

  • Relying on repealed or omitted provisions such as section 289.

    Fix: Check the official text. If a section is omitted by the IBC, say so and move on to the live rule.

  • Writing generic theory with no conclusion.

    Fix: Follow provision, analysis, conclusion. Tie dates and parties in the case to the section's conditions, then state the result clearly.

Last-day revision: Winding-Up by Tribunal

  • 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.

Winding-Up by Tribunal practice questions

Winding-Up by Tribunal in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Winding-Up by Tribunal: frequently asked questions

When does winding up by the Tribunal commence?

Under section 357 of the Companies Act, 2013, it is deemed to commence at the time of presentation of the winding up petition. This date matters for void dispositions and void attachments.

Can a suit against the company continue after a winding up order?

Not as of right. Under section 279, after a winding up order or appointment of a provisional liquidator, a suit by or against the company needs the Tribunal's leave. The leave application must be disposed of within sixty days, and pending appeals before the Supreme Court or a High Court are not covered.

Are all transfers after commencement void?

Dispositions of property, share transfers and changes in members' status after commencement are void under section 334 unless the Tribunal otherwise orders. Section 329 separately voids certain transfers made within one year before the petition, with exceptions for ordinary course and good faith purchasers.

Does a winding up stop an investigation into the company?

No. Section 226 says an investigation is not stopped or suspended only because of a voluntary winding up resolution or a pending winding up proceeding. If a winding up order is passed, the inspector informs the Tribunal, and directors remain bound to take part.