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Sections 268, 269 and 270 of Companies Act 2013: Current Legal Position and Winding Up by Tribunal

Sections 268, 269 and 270 originally formed part of the provisions of the Companies Act, 2013 dealing with revival, rehabilitation, insolvency and winding up of companies. The statutory framework was substantially changed after the enactment of the Insolvency and Bankruptcy Code, 2016.

Overview of Sections 268, 269 and 270

Section 268 of Companies Act 2013 - Bar of Jurisdiction

Accordingly, Section 268 should not be read as an operative provision of the present Companies Act framework. Its appearance in older materials should be understood in its historical statutory context.

Section 269 of Companies Act 2013 - Rehabilitation and Insolvency Fund

Section 270 of Companies Act 2013 - Winding Up by Tribunal

Section 270 is the opening provision of Part I of Chapter XX of the Companies Act, 2013 dealing with winding up by the Tribunal.

Section 270 was substituted by section 255 read with the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016 with effect from 15 November 2016.

What does Section 270 mean?

In practical terms, Section 270 establishes that the statutory provisions contained in Part I of Chapter XX govern a winding up carried out by the Tribunal. The relevant Tribunal for proceedings under these provisions is the National Company Law Tribunal, subject to the provisions of the Companies Act, 2013.

Section 270 should therefore be read together with the succeeding provisions of Chapter XX, particularly Sections 271 onwards, which deal with matters such as the circumstances for winding up, presentation of a winding-up petition, powers of the Tribunal and appointment and functions of the Company Liquidator.

Effect of the Insolvency and Bankruptcy Code 2016

The Insolvency and Bankruptcy Code, 2016 substantially reorganised the legal framework governing corporate insolvency and liquidation in India. As part of that legislative restructuring, numerous provisions of the Companies Act, 2013 concerning revival, rehabilitation and voluntary winding up were omitted or substituted.

For Sections 268 to 270, the principal consequences are that Sections 268 and 269 are no longer operative provisions and Section 270 now introduces the Companies Act framework for winding up by the Tribunal.

Difference Between Insolvency Proceedings and Winding Up Under the Companies Act

The Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 operate within an interconnected statutory framework, but proceedings under them should not automatically be treated as identical.

Corporate insolvency resolution and liquidation under the Insolvency and Bankruptcy Code are governed principally by that Code, whereas winding up by the Tribunal under the Companies Act is governed by the applicable provisions of Chapter XX of the Companies Act, including Sections 270 to 303.

Related Companies Act Provisions

For the procedure and substantive grounds relating to winding up by the Tribunal, readers may also refer to Sections 271, 272 and 273 dealing with circumstances for winding up, petitions and powers of the Tribunal.

The subsequent procedural provisions include Sections 274 and 275 concerning the statement of affairs and appointment of Company Liquidators, Sections 276 and 277 concerning removal, replacement and intimation relating to liquidators, and Sections 278, 279 and 280 concerning the effect of a winding-up order, stay of proceedings and jurisdiction of the Tribunal.