Circumstances in which company may be wound up by Tribunal
Section 271 of the Companies Act, 2013 deals with circumstances in which company may be wound up by Tribunal. A company may, on a petition under section 272, be wound up by the Tribunal,-- (a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal; The Act came into force on 01 Apr 2014.
1[271. Circumstances in which company may be wound up by Tribunal-- A company may, on a petition under section 272, be wound up by the Tribunal,--
(a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal;
(b) if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality;
(c) if on an application made by the Registrar or any other person authorised by the Central Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up;
(d) if the company has made a default in filing with the Registrar its financial statements or annual returns for immediately preceding five consecutive financial years; or
(e) if the Tribunal is of the opinion that it is just and equitable that the company should be wound up.]
Section 271, The Companies Act, 2013 (Act 18 of 2013).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
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Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Devas Multimedia Private Limited v. Antrix Corporation Limited & Anr.
Court's Decision & Legal Precedent
Section 271(c) of the Companies Act, 2013 authorises the Tribunal to wind up a company formed for a fraudulent and unlawful purpose or whose affairs are conducted in a fraudulent manner. Where fraud in the formation and conduct of Devas is established on the record, concurrent NCLT/NCLAT winding-up orders stand; the petitioner’s motive, pending ICC/BIT awards, and a plea that winding up is a device to defeat those awards do not immunise a fraudulent company, because a product of fraud is in conflict with public policy.
On this section: Teaching fill on empty Cos s.271: first Supreme Court Reportable isolate of the 2013 Act’s fraud-winding-up ground (s.271(c)), distinct from already-filled Cos 241/242/248 clusters.
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Moser Baer Karamchari Union Thr. President Mahesh Chand Sharma vs Union of India
Court's Decision & Legal Precedent
The Insolvency and Bankruptcy Code 2016 represents an organic evolution of insolvency law through a consultative process involving multiple committees and expert bodies. The waterfall mechanism under Section 53 of IBC, which ranks workmen's dues for 24 months preceding liquidation commencement date pari passu with secured creditors who relinquish security, is a carefully balanced framework that adequately protects workmen's interests while promoting revival of insolvent companies and maximizing asset value for all stakeholders. This framework is not arbitrary or violative of Articles 14 and 21 of the Constitution. The two regimes - liquidation under Companies Act 2013 and liquidation under IBC - deal with different situations and cannot be compared for constitutional purposes. In economic legislation, courts should defer to legislative judgment unless the exercise of legislative judgment appears to be palpably arbitrary. The sacrifices required from workmen under IBC are not manifestly unjust or arbitrary, and the exclusion of Provident Fund, Pension Fund and Gratuity Fund from liquidation estate, combined with the 24-month protection and Regulation 21A safeguards, adequately protect workmen's dues.
On this section: Grounds for winding up of company; amended by IBC to remove insolvency-related grounds
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Action Ispat and Power Pvt. LTD vs Shyam Metalics and Energy Limited
Court's Decision & Legal Precedent
Even post-admission of a winding up petition and after appointment of a Company Liquidator to take over assets of a company sought to be wound up, discretion is vested in the Company Court to transfer such petition to the NCLT. Such discretion should be exercised based on whether irreversible steps have been taken in the winding up proceedings. If no actual sales of immovable or movable properties have taken place and the proceedings have not reached a stage making it impossible to set the clock back, the Company Court should transfer the proceedings to NCLT to be dealt with as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code 2016, in accordance with the legislative intent to prioritize corporate revival over liquidation.
On this section: Comprehensive scheme for winding up of companies by NCLT; establishes stages of winding up, powers of Company Liquidator, and dissolution process
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… out whether there was a violation of Article 14 of the Constitution of India or whether the right to life under Article 21 Constitution of India was infringed, we must word by word examine the waterfall mechanism envisaged under the Companies Act, 2013, where the company is wound up in terms of grounds (a) to (e) of Section 271 of the Companies Act, 2013; and the rights of the workmen when the insolvent company is sought to be revived, rehabilitated or wound up under the Code. The grounds and situations in the context of the objective and purpose of the two enactments are entirely different. 10. We now turn to the difference in the …
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… out whether there was a violation of Article 14 of the Constitution of India or whether the right to life under Article 21 Constitution of India was infringed, we must word by word examine the waterfall mechanism envisaged under the Companies Act, 2013, where the company is wound up in terms of grounds (a) to (e) of Section 271 of the Companies Act, 2013; and the rights of the workmen when the insolvent company is sought to be revived, rehabilitated or wound up under the Code. The grounds and situations in the context of the objective and purpose of the two enactments are entirely different. 10. We now turn to the difference in the …
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… out whether there was a violation of Article 14 of the Constitution of India or whether the right to life under Article 21 Constitution of India was infringed, we must word by word examine the waterfall mechanism envisaged under the Companies Act, 2013, where the company is wound up in terms of grounds (a) to (e) of Section 271 of the Companies Act, 2013; and the rights of the workmen when the insolvent company is sought to be revived, rehabilitated or wound up under the Code. The grounds and situations in the context of the objective and purpose of the two enactments are entirely different. 10. We now turn to the difference in the …
Questions about Section 271
What have the courts held on Section 271 of the Companies Act?
Devas Multimedia Private Limited v. Antrix Corporation Limited & Anr. (17 Jan 2022) is the leading judgment on this section among those set out below: Teaching fill on empty Cos s.271: first Supreme Court Reportable isolate of the 2013 Act’s fraud-winding-up ground (s.271(c)), distinct from already-filled Cos 241/242/248 clusters. Another 2 judgments on this section are set out below, all of them from the Supreme Court. They run from 2020 to 2023.
How do I find court cases under Section 271 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 271, section 271 Companies Act, section 271 of the Companies Act. People searching for it also type companies act 2013 section 271. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Devas Multimedia Private Limited v. Antrix Corporation Limited & Anr. (17 Jan 2022).
What should I read with Section 271 of the Companies Act, and has it changed?
Its own text turns on section 272 (Petition for winding up), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.
When did Section 271 of the Companies Act come into force?
Section 271 of the Companies Act, commonly called winding up, and cited as Companies Act 271, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.