Sections 468, 469 and 470 of the Companies Act, 2013: Central Government Rule-Making Powers

Sections 468, 469 and 470 of the Companies Act, 2013 deal with three related statutory powers: rules for winding-up matters, the Central Government's general power to make rules for carrying out the Act, and the limited power to remove difficulties.

Current-law note: Section 468 was modified through the Insolvency and Bankruptcy Code, 2016 framework. The present provision focuses on winding up by the Tribunal and related matters. Section 470 itself limits removal-of-difficulties orders to five years from commencement of section 1; that statutory period has expired, although the section remains part of the Act.
On this page

Section 468 - Powers of Central Government to make rules relating to winding up

Meaning: Section 468 authorises the Central Government to prescribe procedural and related rules for company winding-up matters, consistently with the Code of Civil Procedure, 1908, where the Companies Act requires or permits prescription by rules.

Sub-section (1): The Central Government shall make rules consistent with the Code of Civil Procedure, 1908 for matters relating to winding up of companies which are required to be prescribed under the Act, and may make rules for other prescribed matters.

Sub-section (2): Without limiting that general power, the rules may provide for:

(i) the mode of proceedings for winding up of a company by the Tribunal;

(ii) meetings of creditors and members connected with proceedings under section 230;

(iii) giving effect to provisions concerning reduction of capital;

(iv) applications to the Tribunal under the Act;

(v) holding and conducting meetings to ascertain the wishes of creditors and contributories;

(vi) settling lists of contributories, rectifying the register of members where required, and collecting and applying assets;

(vii) payment, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator;

(viii) making calls; and

(ix) fixing the time within which debts and claims must be proved.

Sub-section (3): Existing Supreme Court rules on these matters continue until rules are made by the Central Government. References in those rules to the High Court in relation to winding up are to be read as references to the Tribunal.

The substituted sub-section (2) took effect from 15 November 2016 under Act 31 of 2016 and the Eleventh Schedule.

Section 469 - Power of Central Government to make rules

Meaning: Section 469 is the general enabling provision under which the Central Government may make notified rules to carry out the Companies Act, 2013.

Sub-section (1): The Central Government may, by notification, make rules for carrying out the provisions of the Act.

Sub-section (2): This includes rules for matters which the Act requires or permits to be prescribed, or for which provision may be made by rules.

Sub-section (3): A rule may provide that its contravention is punishable with a fine up to Rs. 5,000 and, for a continuing contravention, a further fine up to Rs. 500 for every day after the first day during which the contravention continues.

Sub-section (4): Rules made under this section and regulations made by the Securities and Exchange Board under the Act must be laid before each House of Parliament for the statutory period of thirty days. Parliament may modify or annul them, without prejudicing the validity of anything previously done under the rule or regulation.

Section 470 - Power to remove difficulties

Meaning: Section 470 created a transitional power allowing the Central Government to address practical difficulties in giving effect to the Act, but only through provisions consistent with the Act and only within the time limit specified in the section.

Sub-section (1): Where a difficulty arises in giving effect to the Act, the Central Government may, by an order published in the Official Gazette, make provisions that are not inconsistent with the Act and that appear necessary or expedient for removing the difficulty.

The proviso states that no such order may be made after five years from the date of commencement of section 1 of the Act. Section 1 commenced on 30 August 2013; accordingly, the statutory window for making new orders under section 470 has expired.

Sub-section (2): Every order made under section 470 must be laid before each House of Parliament as soon as may be after it is made.

How Sections 468, 469 and 470 work together

Section 468 is a subject-specific rule-making power dealing with winding-up procedure and connected matters. Section 469 is the broader rule-making authority used to implement provisions throughout the Companies Act, 2013. Section 470 was a temporary implementation mechanism for resolving difficulties arising when the Act was brought into operation; it was not a continuing power to amend or override the Act.

Related Companies Act provisions

For the immediately preceding provisions, see Sections 461 and 462, Sections 463 and 464, Section 465, and Sections 466 and 467.