Sections 357 and 358 of the Companies Act 2013: Commencement of Winding Up by Tribunal and Limitation
Sections 357 and 358 form part of Chapter XX of the Companies Act, 2013. They deal with two connected procedural consequences of winding up by the National Company Law Tribunal: when winding up is treated as having commenced, and what period is excluded while calculating limitation for specified proceedings brought in the name and on behalf of the company.
Section 357 - Commencement of winding up by Tribunal
Meaning: Section 357 fixes the statutory commencement point of a winding-up proceeding under the Companies Act, 2013. This date matters because other consequences under the winding-up framework may be calculated by reference to the commencement of winding up.
The winding up of a company by the Tribunal under the Act is deemed to commence when the petition for winding up is presented.
Accordingly, the legally relevant commencement date under the present Section 357 is the date of presentation of the winding-up petition, rather than the later date on which the Tribunal ultimately makes the winding-up order.
Section 358 - Exclusion of certain time in computing period of limitation
Meaning: Section 358 creates a statutory exclusion when limitation is calculated for a suit or application brought in the name and on behalf of a company that is being wound up by the Tribunal. It operates notwithstanding the Limitation Act, 1963 or any other law for the time being in force.
For such a suit or application, the period beginning with the commencement of the company's winding up and ending one year immediately after the date of the winding-up order is excluded when computing the prescribed limitation period.
The provision does not itself prescribe a new limitation period for every claim. Instead, it directs that the stated interval be left out while computing the limitation period otherwise applicable to the relevant suit or application.
How Sections 357 and 358 operate together
Section 357 identifies the starting point - presentation of the winding-up petition. Section 358 then uses the commencement of winding up as the beginning of the period that is excluded for limitation purposes, with the exclusion continuing until one year immediately following the winding-up order. The provisions should therefore be read together when limitation is being calculated for proceedings in the name and on behalf of a company being wound up by the Tribunal.
Relationship with the Insolvency and Bankruptcy Code, 2016
The Insolvency and Bankruptcy Code, 2016 substantially reorganised India's corporate insolvency and liquidation framework and also amended Chapter XX of the Companies Act, 2013. Section 357 was specifically substituted by that legislation with effect from 15 November 2016. For a particular company, the correct statutory route depends on the nature and procedural basis of the proceeding, so the Companies Act winding-up provisions should be read together with the applicable provisions of the Insolvency and Bankruptcy Code, 2016.
Official legal resources
For the latest statutory text, amendments, notifications and rules, verify the provision from the Ministry of Corporate Affairs and India Code before relying on it in a filing or legal proceeding.