Section 334 of the Companies Act, 2013
Section 334 of the Companies Act, 2013 deals with the Effect of Winding Up on Antecedent Transactions.
📜 Section 334 – Transfers, etc., after Commencement of Winding Up to be Void
🔹 Main Provision:
Any transfer of property, delivery of goods, payment, execution, or other act relating to the property of a company, made after the commencement of the winding up, shall be void unless approved by the Tribunal.
🔹 Key Highlights:
| Provision | Explanation |
|---|---|
| 🛑 Void Transfers | Any transaction involving the company’s assets after winding up begins is void. |
| ⚖️ Tribunal Approval Required | If such a transaction is approved by the NCLT, it may be considered valid. |
| 🕒 Commencement of Winding Up | This refers to the date of presentation of the petition for winding up, or passing of the resolution, whichever is earlier. |
| 📌 Applies To | Transfers, payments, property deals, deliveries, etc., made by the company after winding-up begins. |
✅ Purpose:
To prevent fraudulent or preferential transfers by the company when it is about to be wound up.
To protect the rights of creditors and ensure fair distribution of assets.
🔎 Example:
If a company makes a large payment to a related party after a winding-up petition is filed, such payment is automatically void unless specifically sanctioned by the Tribunal.
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