Section 274 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 274 deals with what a company and its directors must file once a winding-up petition against the company is before the Tribunal. If someone other than the company files the petition and a prima facie case is made out, the Tribunal directs the company to file its objections along with a statement of its affairs within thirty days. Missing that deadline has serious consequences for the company and for the directors found responsible.
Where a petition is filed by any person other than the company, and the Tribunal is satisfied that a prima facie case exists, it directs the company to file objections and a statement of affairs within thirty days of the order (extendable by a further thirty days in contingency or special circumstances). A company that fails forfeits the right to oppose the petition, and responsible directors and officers face imprisonment up to six months or a fine of Rs 25,000 to Rs 5 lakh, or both. After a winding-up order, directors must hand over audited books to the liquidator within thirty days.
Why section 274 still matters after the IBC
Since the Insolvency and Bankruptcy Code, 2016 (IBC), inability to pay debts is dealt with under the IBC, and voluntary winding up has also moved there. Winding up by the Tribunal under the Companies Act continues on the grounds that section 271 still lists, for example default in filing financial statements or annual returns for five consecutive financial years, or a "just and equitable" petition. Section 274 operates whenever such a petition reaches the Tribunal. Our article on section 273 explains what the Tribunal can do with the petition, and the grounds in section 271 explain when one can be filed.
If a petition has been filed against your company, the thirty days move quickly. Our legal dispute resolution team can help you prepare the objections and the statement of affairs.
Sub-section (1): the direction to file
The direction under sub-section (1) is not automatic. Three conditions apply:
- The petition must have been filed by a person other than the company. (A petition by the company itself must already be accompanied by a statement of affairs under section 272(4).)
- The Tribunal must be satisfied that a prima facie case for winding up is made out.
- The Tribunal then directs the company, by an order, to file its objections along with a statement of its affairs within thirty days of the order, in the form and manner prescribed.
Two provisos soften or shape this:
- The Tribunal may allow a further thirty days "in a situation of contingency or special circumstances". The Tribunal's power, not the company's right.
- The Tribunal may direct the petitioner to deposit security for costs, as it considers reasonable, as a precondition to issuing directions to the company.
The form and manner of the statement of affairs are left to the rules. The Companies (Winding Up) Rules, 2020 deal with winding-up procedure; I am stating this from general knowledge, so please confirm the current text of the rules and forms before filing.
Sub-section (2): losing the right to oppose
Sub-section (2) says a company that fails to file the statement of affairs "shall forfeit the right to oppose the petition". In practical terms, the company may no longer contest the petition on merits, although the Tribunal still has to be satisfied on the petition itself. The same sub-section makes the directors and officers "found responsible for such non-compliance" liable to punishment under sub-section (4).
The words "found responsible" matter. The provision does not make every director automatically liable; responsibility has to be established.
Sub-section (3): books of account after a winding-up order
Where the Tribunal passes a winding-up order under section 273(1)(d), the directors and other officers must, within thirty days of the order, submit "at the cost of the company" the books of account "completed and audited up to the date of the order" to the liquidator, in the manner specified by the Tribunal. Note that the cost is borne by the company, not by the directors personally. The appointment of the liquidator is covered in our article on sections 275 and 276.
| Step | Who | Time limit |
|---|---|---|
| File objections and statement of affairs | Company, on the Tribunal's direction | 30 days of the order; further 30 days if allowed |
| Security for costs (if directed) | Petitioner | As directed, before directions issue to the company |
| Submit audited books of account to the liquidator | Directors and other officers | 30 days of the winding-up order |
Sub-sections (4) and (5): penalty and complaint
If a director or officer contravenes section 274, the defaulting director or officer is punishable with:
| Element | Text |
|---|---|
| Imprisonment | Up to six months |
| Fine | Not less than Rs 25,000, up to Rs 5 lakh |
| Combination | Imprisonment or fine, or both |
The complaint may be filed before the Special Court by the Registrar, the provisional liquidator, the Company Liquidator or any person authorised by the Tribunal (sub-section (5)). The section does not say the Tribunal itself tries the offence.
Who is affected
Directors and officers are the main audience. A statement of affairs is a disclosure of the company's assets and liabilities, and it feeds the liquidator's later examination (see the winding-up committee's functions in section 277). Our earlier explainer on what directors must submit in a statement of affairs covers the practical content. Creditors and petitioners also care: the statement gives them a picture of what is available, and the security-for-costs proviso protects the company from speculative petitions.
Proposed change
The Corporate Laws (Amendment) Bill, 2026 has no clause amending section 274. Its winding-up clause touches section 271 only. The Bill is pending and is not law as on 30 September 2026.
Practical examples
Example 1: a creditor-style petition. A petitioner files under section 271(d) alleging five years of default in filings. The Tribunal finds a prima facie case and directs the company to file objections and a statement of affairs within thirty days. The board files both on time and is heard on the petition.
Example 2: missed deadline. The same company does nothing for forty days, and no extension was sought. Under sub-section (2) it forfeits the right to oppose, and officers found responsible face prosecution under sub-section (4).
Example 3: after the order. The Tribunal orders winding up. The finance head completes audited accounts up to the order date and delivers them to the liquidator within thirty days, at the company's cost.
Need help with a winding-up petition?
Short deadlines and a prescribed format leave little room for error once the Tribunal has issued its direction. We can review the petition, advise on the objections and help organise the statement of affairs and the books. Talk to us about legal dispute resolution before the thirty days run out.
Key takeaways
- The direction applies only where the petition is filed by someone other than the company, and a prima facie case is made out.
- The company has thirty days to file objections and a statement of affairs, with one possible extension of thirty days.
- Failure means forfeiting the right to oppose the petition.
- Directors and officers found responsible face up to six months' imprisonment or a fine of Rs 25,000 to Rs 5 lakh, or both.
- After a winding-up order, audited books must reach the liquidator within thirty days, at the company's cost.
- The Bill, 2026 does not amend section 274 and is not law.
Read next
- Section 273: Powers of the Tribunal in winding up
- Sections 275 and 276: Company Liquidator appointment and removal
- Statement of affairs in winding up: what directors must submit
- Winding up by Tribunal: grounds and process
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.