Sections 323 and 324 of the Companies Act, 2013: Costs of Voluntary Winding Up and Proof of Debts

Sections 323 and 324 originally dealt with two connected aspects of company winding up. The law has since changed materially: Section 323, which concerned the costs of voluntary winding up, was omitted with effect from 15 November 2016, while Section 324 continues to govern the admission of debts and claims to proof in winding up under the Companies Act, 2013.

Current legal position: Part II of Chapter XX, dealing with voluntary winding up under the Companies Act, 2013, was omitted pursuant to section 255 and the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016. Voluntary liquidation of a corporate person is now principally governed by section 59 of the Insolvency and Bankruptcy Code, 2016 and the applicable IBBI Voluntary Liquidation Process Regulations.

Section 323 - Costs of Voluntary Winding Up

Section 323 is omitted. Before its omission, the provision addressed costs, charges and expenses properly incurred in a voluntary winding up, including the Company Liquidator's fee. The provision formed part of the former statutory framework for voluntary winding up.

The omission took effect on 15 November 2016 through the Insolvency and Bankruptcy Code, 2016. Accordingly, Section 323 should not be presented as an operative provision governing a present-day voluntary liquidation.

Section 324 - Debts of All Descriptions to Be Admitted to Proof

Section 324 remains part of the Companies Act, 2013. It applies to winding up and adopts a broad approach to claims that may be proved against a company.

Meaning of Section 324: In a winding up, debts payable on a contingency and claims against the company may be admitted to proof whether they are present or future, certain or contingent, ascertained or capable only of assessment in damages. Where a debt or claim does not have a certain value, a just estimate of its value is to be made so far as possible.

What Types of Claims Can Be Admitted?

Type of debt or claim	Effect under Section 324
Present debt	May be admitted to proof, subject to the applicable winding-up framework.
Future debt	A claim that will become payable in the future is not excluded merely because payment is deferred.
Contingent debt	A liability dependent on a future uncertain event may be admitted, with its value estimated where necessary.
Unliquidated damages	A claim sounding only in damages may be admitted and a just estimate made.
Claim without a certain value	The value is to be estimated as fairly as possible for proof in the winding up.

Section 324 and Insolvent Companies

Section 324 expressly makes its operation in the case of an insolvent company subject to the application of the Companies Act, 2013 or the applicable law of insolvency. This qualification is important because the Insolvency and Bankruptcy Code, 2016 now provides the principal insolvency and liquidation framework for corporate persons.

Practical Importance of Section 324

The provision prevents a claim from being excluded merely because it is contingent, future, unascertained or expressed as damages. Its valuation mechanism allows such liabilities to be brought into the proof process on an estimated basis, subject to the governing liquidation law and procedure.

Official Legal Resources

For the current statutory text and insolvency framework, refer to the Companies Act, 2013 - Ministry of Corporate Affairs, the Insolvency and Bankruptcy Code resources - IBBI, and the updated IBBI Regulations.

Updated: 17 September 2026. This article is a general legal information resource and should be read with the latest statutory amendments, notifications, regulations and applicable judicial decisions.