Companies Act Section 280

Companies Act, Section 280: Comprehensive Jurisdiction of the Tribunal in Matters of Winding Up

Section 280 of the Companies Act, 2013 confers exclusive and overarching jurisdiction upon the National Company Law Tribunal (Tribunal) in all matters connected to or arising from the winding up of a company. This section overrides all other laws that may be in force at the time and grants the Tribunal full legal authority to entertain, adjudicate, and dispose of a wide range of suits, claims, applications, and questions whether legal or factual that may relate to a company under winding up.

Statutory Empowerment of the Tribunal

The provision begins with a non-obstante clause, stating:

“Notwithstanding anything contained in any other law for the time being in force, the Tribunal shall have jurisdiction...”

This phrase means that even if other existing laws grant jurisdiction to civil courts, consumer forums, or any other legal authority, those provisions will not apply in relation to the categories of cases listed in Section 280 when they pertain to a company that is being wound up under the Act. The Tribunal’s jurisdiction will take precedence over all others.

Scope of Tribunal’s Jurisdiction

Section 280 provides an inclusive list of the matters over which the Tribunal shall have jurisdiction during the winding up of a company. These are described below:

(a) Suits or Proceedings by or Against the Company

The Tribunal has the power to entertain and dispose of:

Any legal suit or judicial proceeding
Whether initiated by the company or filed against the company
This ensures that the Tribunal acts as the central adjudicatory forum for all litigation involving the company once a winding up process has commenced. This consolidation helps in efficient and consistent handling of legal matters.

(b) Claims by or Against the Company, Including Its Branches

The Tribunal’s jurisdiction extends to:

All claims made by or against the company
Including those related to any of its branches in India
This allows the Tribunal to oversee financial, contractual, or legal claims that may be outstanding between the company and any third party, including customers, suppliers, lenders, or employees even if these claims originate from branch operations in different states.

(c) Applications Made Under Section 233

Section 233 of the Companies Act deals with fast-track mergers or amalgamations involving:

Two or more small companies, a holding company and its wholly-owned subsidiary, or any other classes of companies as prescribed.
Section 280 confirms that even these applications, when arising in the context of a winding up proceeding, shall be under the Tribunal’s jurisdiction.

(d) Questions of Priorities or Any Other Legal or Factual Issues

The Tribunal is empowered to adjudicate:

Any question of priority among creditors, stakeholders, or claimants
Any other question whatsoever whether relating to:
Law or fact
The company’s assets
Its business operations
Actions taken or liabilities incurred
Rights, benefits, or privileges
Duties, responsibilities, and obligations
This catch-all clause is extremely broad and is meant to ensure that all disputes, claims, and concerns connected to the winding up no matter how complex or technical fall squarely within the Tribunal’s jurisdiction.

Temporal Applicability: Retrospective and Prospective Jurisdiction

Importantly, Section 280 applies irrespective of when the matter arose or when proceedings were instituted. Specifically, the Tribunal’s jurisdiction includes:

Cases or proceedings that were:
Instituted before the winding up order was passed or are instituted after the winding up order claims or legal questions that have:
Arisen before, or arise after the winding up process begins applications or schemes that were:
Submitted before, or submitted after the winding up order
This means that the Tribunal may take cognizance of and adjudicate ongoing or new matters, providing full continuity and consistency in the judicial process related to the company.

Significance and Purpose of Section 280

The key objective of this section is to centralize all legal proceedings and disputes relating to the winding up of a company within a single specialized forum the Tribunal. This provides several advantages:

Efficiency: Avoids duplication of proceedings across multiple forums.
Consistency: Ensures that all decisions related to the winding up process are coherent and harmonized.
Control: Allows the Tribunal to manage the winding up process comprehensively, especially in dealing with creditor claims, asset distribution, and stakeholder interests.
Protection of Stakeholders: Prevents conflicting judgments or orders that could disrupt or delay the winding up.