Companies Act 2013: Sections 221 to 260

Sections 221 to 252 of the Companies Act, 2013 deal with important company-law subjects including investigation, restrictions on assets and securities, compromises and arrangements, mergers and amalgamations, oppression and mismanagement, class actions, registered valuers, and removal and restoration of a company name. Sections 253 to 260 formed part of the former statutory framework for revival and rehabilitation of sick companies but have been omitted.

Current-law note: Sections 253 to 269 of the Companies Act, 2013 were omitted with effect from 15 November 2016 by section 255 read with the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016. Accordingly, the links to Sections 253 to 260 below are retained for historical reference, but those provisions are not presently operative.

Investigation and related powers: Sections 221 to 229

These provisions address protection of company assets during inquiry or investigation, restrictions on securities, inspectors' reports, action following investigation, investigation expenses, continuation of investigation despite winding up, confidentiality obligations and investigation of foreign companies.

Sections 221 and 222Freezing of company assets during inquiry or investigation and imposition of restrictions upon securities. Sections 223 and 224Inspector's report and actions that may follow an inspector's report. Sections 225 and 226Expenses of investigation and continuation of investigation proceedings despite winding up. Sections 227 and 228Protection of specified information involving legal advisers and bankers, and investigation of foreign companies. Section 229Penalty relating to furnishing false statements and mutilation or destruction of documents.

Compromises, arrangements and mergers: Sections 230 to 240

Sections 230 to 240 provide the principal Companies Act framework for compromises and arrangements, enforcement by the Tribunal, mergers and amalgamations, fast-track mergers, cross-border mergers, acquisition of dissenting shareholders' shares, purchase of minority shareholding and related matters.

Section 230Power to compromise or make arrangements with creditors and members, subject to the statutory procedure and Tribunal oversight. Sections 231 and 232Tribunal's power to enforce a compromise or arrangement and provisions governing merger and amalgamation. Sections 233 and 234Merger or amalgamation of certain companies and merger or amalgamation with a foreign company. Section 235Power to acquire shares of shareholders dissenting from a scheme or contract approved by the prescribed majority. Section 236Purchase of minority shareholding where the statutory conditions are satisfied. Section 237Central Government power to provide for amalgamation of companies in public interest. Sections 238, 239 and 240Registration of offers involving transfer of shares, preservation of books and papers of amalgamated companies, and liability for offences committed before merger or amalgamation.

Oppression, mismanagement and class action: Sections 241 to 246

These sections govern applications to the National Company Law Tribunal for relief from oppression or mismanagement, the Tribunal's remedial powers, consequences for specified agreements, eligibility to apply, class actions and application of related provisions.

Section 241Application to the Tribunal for relief in cases of oppression, mismanagement and specified prejudicial conduct. Section 242Powers of the Tribunal when the statutory conditions for relief are established. Sections 243 and 244Consequences of termination or modification of certain agreements and the right to apply under Section 241. Sections 245 and 246Class action and application of specified provisions to proceedings under Sections 241 and 245.

Registered valuers and removal of company name: Sections 247 to 252

Section 247 regulates valuation by registered valuers. Sections 248 to 252 govern removal of a company's name from the register, restrictions on voluntary strike-off applications, the legal effect of dissolution, fraudulent applications and restoration proceedings before the Tribunal.

Section 247Valuation by registered valuers in matters where valuation is required under the Act. Section 248Power of the Registrar to remove the name of a company from the register and the statutory route for an eligible company's application for removal. Sections 249 and 250Restrictions on applications under Section 248 and the effect of a company being notified as dissolved. Sections 251 and 252Fraudulent application for removal of name and appeal or application to the Tribunal for restoration, as applicable.

Sections 253 to 260: omitted provisions

The following internal links are retained so that older references and historical material on this website remain accessible. These provisions were part of Chapter XIX on revival and rehabilitation of sick companies and were omitted with effect from 15 November 2016 under the Insolvency and Bankruptcy Code, 2016.

Sections 253 and 254 OMITTEDHistorical provisions on determination of sickness and application for revival and rehabilitation. Sections 255 and 256 OMITTEDHistorical provisions on exclusion of certain time for limitation and appointment of an interim administrator. Sections 257 and 258 OMITTEDHistorical provisions concerning the committee of creditors and orders of the Tribunal. Sections 259 and 260 OMITTEDHistorical provisions concerning appointment, powers and duties of a company administrator.

Practical legal context

The provisions in this range should be read with the relevant Companies Act rules, notifications and amendments. Where insolvency or liquidation under the Insolvency and Bankruptcy Code, 2016 is involved, the Companies Act provisions must also be read with the Code and the applicable IBBI regulations. For an authoritative current position, verify the statutory text and subordinate legislation on the official portals linked on this page.