Companies Act • Official Statutory Text & Practice Guide
Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 270 of Companies Act: Corporate Governance & Statutory Compliance
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Winding Up
1.The winding up of a company may be either—
a.by the Tribunal; or
b.voluntary.
2.Notwithstanding anything contained in any other Act, the provisions of this Act with respect to winding upshall apply to the winding up of a company in any of the modes specified under sub-section (1 ).
Statutory Defined Terms in this Section:(Click any term for official legal definition)
Section 270 of the Companies Act, 2013 defines the scope and modes of winding up under Chapter XX; as amended by the Insolvency and Bankruptcy Code, 2016, Chapter XX governs exclusively compulsory winding up by the Tribunal, while voluntary winding up is transferred entirely to Section 59 of the IBC.
Exclusive Scope of Chapter XX Post-IBC: Following substitution by the IBC (Eleventh Schedule), Section 270 restricts Part I of Chapter XX strictly to compulsory winding up by the Tribunal under grounds specified in Section 271.
Complete Transfer of Voluntary Liquidation to Section 59 IBC: Voluntary winding up was omitted from the Companies Act, 2013 and transferred exclusively to Section 59 of the IBC, requiring declarations of solvency and special resolutions.
Jurisdictional Harmonization with Section 434 and IBC: Aligned Chapter XX with Section 434 of the Act, establishing the rule that winding up on grounds of debt default is superseded by CIRP proceedings under the IBC.
Key Landmark Precedents:
Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd., (2019) 18 SCC 549: The Supreme Court interpreted amended Section 270 and Section 434, holding that pending winding-up proceedings in High Courts can be transferred to the NCLT for CIRP, establishing the supremacy of the IBC over Chapter XX winding up.
Action Ispat and Power Pvt. Ltd. v. Shyam Metalics and Energy Ltd., (2021) 2 SCC 641: Laid down the definitive test for transferring winding-up petitions from High Courts to NCLT, holding that transfer is mandatory unless irreversible steps toward actual liquidation have occurred.
Kaledonia Jute and Fibres Pvt. Ltd. v. Axis Nirman and Industries Ltd., (2021) 2 SCC 403: Affirmed that any party to a winding-up proceeding under Section 270/271 can apply for transfer to NCLT under Section 434 to prioritize resolution under the IBC over corporate dissolution.
Courtroom Practice & Strategic Litigation Guidance:
To voluntarily dissolve a solvent company, do not initiate proceedings under the Companies Act; proceed exclusively under Section 59 of the IBC by filing Form MGT-14, director solvency declarations, and liquidator appointment notices with the RoC and IBBI. If defending a winding-up petition under Section 271, apply under Section 434 for transfer to NCLT to explore corporate turnaround under the IBC.
Legal Commentary & Landmark Judgments: Section 270
Section 270 of the Companies Act, 2013 defines the scope and modes of winding up under Chapter XX; as amended by the Insolvency and Bankruptcy Code, 2016, Chapter XX governs exclusively compulsory winding up by the Tribunal, while voluntary winding up is transferred entirely to Section 59 of the IBC.
To voluntarily dissolve a solvent company, do not initiate proceedings under the Companies Act; proceed exclusively under Section 59 of the IBC by filing Form MGT-14, director solvency declarations, and liquidator appointment notices with the RoC and IBBI. If defending a winding-up petition under Section 271, apply under Section 434 for transfer to NCLT to explore corporate turnaround under the IBC.