Section 260 of the Companies Act, 2013
Section 260 of the Companies Act, 2013 deals with the Power of the Tribunal to make necessary orders in the course of proceedings.
📜 Section 260 – Power of Tribunal to Make Orders
🔹 Overview:
During any proceedings before the National Company Law Tribunal (NCLT) related to:
Compromise or arrangement (like under Sections 230-232),
Merger or demerger,
Reduction of share capital, or
Other corporate restructuring,
the Tribunal has the power to make any interim or final orders it deems necessary to:
Secure the ends of justice, or
Prevent abuse of the process.
🔹 Scope of Power:
The Tribunal may, during the proceedings:
Stay the execution of any order or resolution,
Make arrangements for the management or conduct of the company,
Grant injunctions,
Make directions for meetings,
Modify the scheme or plan if necessary,
Order investigations or valuations,
And any other orders necessary to ensure fairness and legality.
✅ Key Points:
| Aspect | Detail |
|---|---|
| Authority | National Company Law Tribunal (NCLT) |
| Purpose | To ensure justice and prevent abuse of the process in company proceedings |
| Powers | Interim or final orders, injunctions, directions, modifications |
| Applicability | Proceedings under Sections like 230 (compromise/arrangement), 232 (merger), 66 (reduction of share capital), etc. |
⚖️ Importance:
This section grants the Tribunal flexibility and broad discretion to manage complex company law cases and ensures:
Protection of shareholders’ and creditors’ interests,
Proper implementation of schemes,
Prevention of procedural misuse.
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