Sections 261, 262 and 263 of the Companies Act 2013: Current Status and Historical Scope

Sections 261, 262 and 263 formed part of Chapter XIX of the Companies Act, 2013, which originally dealt with revival and rehabilitation of sick companies. The provisions respectively concerned a scheme of revival and rehabilitation, sanction of the scheme, and the binding effect of the scheme.

Current legal status: Sections 261, 262 and 263 are omitted provisions. They were omitted by section 255 read with the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016, with effect from 15 November 2016. They should therefore not be presented as operative provisions of the Companies Act, 2013.

Legal status at a glance

Section	Historical subject	Present status
261	Scheme of revival and rehabilitation	Omitted with effect from 15 November 2016
262	Sanction of scheme	Omitted with effect from 15 November 2016
263	Scheme to be binding	Omitted with effect from 15 November 2016

Section 261 - Scheme of revival and rehabilitation

Section 261 was titled "Scheme of revival and rehabilitation". In the original Chapter XIX framework, it related to preparation of a scheme intended to revive or rehabilitate a sick company. The section has been omitted and is no longer an operative statutory mechanism under the Companies Act, 2013.

Section 262 - Sanction of scheme

Section 262 was titled "Sanction of scheme". It belonged to the same former revival and rehabilitation framework and addressed sanction of a proposed scheme. This section has also been omitted with effect from 15 November 2016.

Section 263 - Scheme to be binding

Section 263 was titled "Scheme to be binding". It dealt historically with the legal effect of a sanctioned revival or rehabilitation scheme. Section 263 was omitted along with the connected Chapter XIX provisions with effect from 15 November 2016.

Why were these provisions omitted?

The Insolvency and Bankruptcy Code, 2016 introduced a consolidated insolvency resolution framework and, through section 255 and the Eleventh Schedule, amended the Companies Act, 2013. As part of that legislative change, the former Chapter XIX revival and rehabilitation provisions, including Sections 261, 262 and 263, were omitted.

Which law is relevant now?

For present-day corporate insolvency and resolution issues, the applicable legal framework should be identified under the Insolvency and Bankruptcy Code, 2016 and the rules and regulations made under it, subject to the facts and the provision involved. Current legislation and regulatory material should be checked before relying on any historical Companies Act provision.

Official legal resources

For authoritative text and current updates, refer to the Ministry of Corporate Affairs - Companies Act, 2013 and the Insolvency and Bankruptcy Board of India - Legal Framework.

Updated: 17 September 2026. This page explains the statutory status of these provisions for general legal information and should be read with the latest official legislation, notifications, rules and regulations.