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Section 335: Certain attachments, executions, etc., in winding up by Tribunal to be void

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 334 All 470 Sections of Companies Act Section 336
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 335

Section 335 of the Companies Act, 2013 renders void any attachment, distress, execution, or sale put in force against the estate or effects of a company without the leave of the Tribunal after the commencement of winding up.

  • Complete Execution Moratorium: Prohibits individual creditors from executing decrees, attaching bank accounts, or levying distress against company assets once winding up has commenced.
  • Invalidation of Unauthorized Sales: Any sale of company properties executed without the prior leave of the Tribunal after the commencement of winding up is a complete legal nullity.
  • Interplay with Statutory Creditor Rights: Does not prejudice the right of the Central Government or State Government to claim certain statutory dues where specific statutes override, subject to harmonized judicial interpretation.
Key Landmark Precedents:
  • M.K. Ranganathan v. Govt. of Madras, AIR 1955 SC 604: The Supreme Court held that Section 537 of the 1956 Act (predecessor to Section 335) invalidates execution sales conducted without leave of the Company Court, but a secured creditor realizing security without intervention of the court stands outside winding up.
  • Central Bank of India v. Elmot Engineering Co., (1994) 4 SCC 159: Held that attachment or execution levied after the presentation of a winding up petition is void, and executing courts cannot proceed to sell company properties without express Tribunal sanction.
  • Allahabad Bank v. Canara Bank, (2000) 4 SCC 406: The Supreme Court analyzed the jurisdiction of the Company Court under Section 537/Section 335 vis-a-vis specialized tribunals like the DRT under RDDBFI Act, affirming that specialized statutes prevail but company court oversight governs asset distribution.
Courtroom Practice & Strategic Litigation Guidance:

When defending company assets against civil court execution decrees, file a memo of winding up commencement under Section 335 before the executing civil court. The executing court is legally bound to stay execution and direct the decree-holder to seek leave of the Tribunal under Section 279/335 or prove its decree as an unsecured creditor in liquidation.

Section 334 All 470 Sections of Companies Act Section 336