1. The Tribunal may, at any time after making a winding up order, on an application of promoter, shareholders or creditors or any other interested person, if satisfied, make an order that it is just and fair that an opportunity to revive and rehabilitate the company be provided staying the proceedings for such time but not exceeding one hundred and eighty days and on such terms and conditions as it thinks fit:
Provided that: an order under this sub-section shall be made by the Tribunal only when the application is accompanied with a scheme for rehabilitation.
2. The Tribunal may, while passing the order under sub-section (1 ), require the applicant to furnish such security as to costs as it considers fit.
3. Where an order under sub-section (1 ) is passed by the Tribunal, the provisions of Chapter XIX shall be followed in respect of the consideration and sanction of the scheme of revival of the company.
4. Without prejudice to the provisions of sub-section (1 ), the Tribunal may at any time after making a winding up order, on an application of the Company Liquidator, make an order staying the winding up proceedings or any part thereof, for such time and on such terms and conditions as it thinks fit.
5. The Tribunal may, before making an order, under this section, require the Company Liquidator to furnish to it a report with respect to any facts or matters which are in his opinion relevant to the application.
6. A copy of every order made under this section shall forthwith be forwarded by the Company Liquidator to the Registrar who shall make an endorsement of the order in his books and records relating to the company.
Legal Commentary & Landmark Judgments: Section 289
Section 289 of the Companies Act, 2013 formerly governed the Tribunal's power to stay winding up proceedings to facilitate corporate revival, before being omitted by the Insolvency and Bankruptcy Code, 2016 to channel corporate rehabilitation exclusively into the CIRP framework.
Following the statutory omission of Section 289, parties seeking to halt a winding-up order to implement a turnaround plan must proceed via an application under Section 230 (compromise or arrangement with creditors) in conjunction with Rule 11 of the NCLT Rules, 2016, presenting a fully funded settlement scheme.