Section 301 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 301 is a short protective power in a winding up. If the Tribunal is satisfied that a contributory, or a person holding the company's property, accounts or papers, is about to leave India or abscond, or to remove or conceal his property, in order to evade payment of calls or to avoid examination about the company's affairs, it may have the contributory detained and his books, papers and movable property seized and safely kept.
At any time, before or after the winding up order, the Tribunal may act if it is satisfied that a contributory or a person having property, accounts or papers of the company is about to leave India or abscond, or to remove or conceal his property, to evade payment of calls or avoid examination about the company's affairs. It may cause (a) the contributory to be detained until such time as it orders, and (b) his books, papers and movable property to be seized and safely kept until such time as it orders.
Where section 301 sits
Section 301 is in Chapter XX (winding up), Part I, close to the provisions that let the Tribunal call people to account. Our post on sections 299 and 300 covers summons and examination of directors, the kind of examination that section 301 helps to protect, and sections 295 to 298 cover contributories, calls and set-off, which is where the "calls" in section 301 come from.
This article reads the section as printed in the Companies Act, 2013 as amended up to 29 July 2022 (the consolidated text consulted). The section is as enacted; it is not among the sections the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016 substituted. Winding up on the ground of inability to pay debts and voluntary winding up are now under the Code; see our post on section 255 and the Eleventh Schedule. No later amendment was found in the texts consulted; later amendments should be checked on the official text.
Procedure is in the Companies (Winding Up) Rules, 2020. Our post on rules 150 to 155 covers the arrest of a contributory and applications under sections 339 and 340. This article takes no period, form number or fee from the rules.
If you are a liquidator, creditor or counsel weighing urgent steps against a person who is about to disappear, our legal dispute resolution team can advise on how to put the facts before the Tribunal.
The section, element by element
Section 301 is a single sentence. Take it in pieces.
When. "At any time either before or after passing a winding up order". The power is not held back until the order is made. It is available once the Tribunal is seized of the matter and satisfied as the section requires.
Who is the subject. Two descriptions: "a contributory", or "a person having property, accounts or papers of the company in his possession". The second description reaches beyond contributories to anyone holding the company's property, accounts or papers.
What the person is doing. The person "is about to leave India or otherwise to abscond, or is about to remove or conceal any of his property". These are alternatives: leaving India, absconding, removing property, or concealing property.
Why: the purpose. The purpose must be "for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company". Two purposes again: evading calls, or avoiding examination.
What the Tribunal must be. "Satisfied". The section turns on the Tribunal's satisfaction on the facts put before it.
What the Tribunal may cause. The word is "may". Two limbs:
- Clause (a): "the contributory to be detained until such time as the Tribunal may order".
- Clause (b): "his books and papers and movable property to be seized and safely kept until such time as the Tribunal may order".
One point to read carefully. Clause (a) speaks only of the contributory being detained, while clause (b) speaks of "his" books, papers and movable property. The lead-in, however, also names a person having the company's property, accounts or papers. Read the section as printed; this article does not add a power of detention over a person who is not a contributory.
How it compares with neighbouring sections
| Section | What it covers (by the title of the live post) | Link with section 301 |
|---|---|---|
| 295 to 298 | Contributories, calls and set-off | Source of the "calls" a contributory may be trying to evade |
| 299 and 300 | Summons and examination of directors | The kind of examination a person may be trying to avoid |
| 301 | Arrest of person trying to leave India or abscond | Detention and seizure to protect the calls and the examination |
| 302 and 303 | Dissolution by Tribunal | Later stage, after the affairs of the company have been dealt with |
Worked example
The Tribunal has before it a winding up petition against Lotus Retail Limited. Mr Sethi is a contributory, holding partly paid shares on which a call is due. The liquidator's counsel files an application showing that Mr Sethi has booked a one-way ticket abroad, has been moving his movable property out of his residence, and holds Lotus's accounts and papers that the Tribunal wishes to examine him about.
If the Tribunal is satisfied that he is about to leave India or abscond, or to remove or conceal property, to evade payment of the call or to avoid examination about the company's affairs, section 301 lets it act whether or not the winding up order has been passed. It may cause Mr Sethi to be detained until such time as it orders, and his books, papers and movable property to be seized and safely kept until such time as it orders. The duration is for the Tribunal; section 301 prints no fixed period.
Common mistakes
- Waiting for the winding up order. The section applies before or after the order.
- Overlooking the purpose test. The facts must show the purpose of evading payment of calls or avoiding examination, not merely that a person is travelling.
- Assuming a fixed period of detention or custody. The text says "until such time as the Tribunal may order".
- Treating the power as automatic. It is exercised on the Tribunal's satisfaction.
- Extending clause (a) beyond a contributory. Detention is of the contributory; the lead-in also names a person holding company property, accounts or papers, so read the clauses carefully.
- Skipping the Code. Winding up for inability to pay debts and voluntary winding up are now under the Code.
Need help acting before a person disappears?
Where time matters, the first step is a clear statement of facts: who the person is, what they hold, and why the purpose test is met. Our team can prepare the application and the supporting record; see our legal dispute resolution work.
Key takeaways
- Section 301 lets the Tribunal act before or after the winding up order.
- It covers a contributory and a person having the company's property, accounts or papers in his possession.
- The triggers are leaving India or absconding, or removing or concealing property, to evade payment of calls or to avoid examination.
- The Tribunal may order the contributory's detention and the seizure and safe keeping of his books, papers and movable property, until such time as it orders.
- The section is as enacted; it prints no period and no penalty.
Read next
- Section 326: overriding preferential payments and workmen's dues
- Section 280: jurisdiction of the Tribunal in winding up
- Sections 299 and 300: summons and examination of directors
- Sections 295 to 298: contributories, calls and set-off
Disclaimer: Based on the Companies Act, 2013 as amended up to 29 July 2022 (the consolidated text consulted on 4 October 2026). Later amendments to the Act, the rules made under it and the Insolvency and Bankruptcy Code, 2016 should be checked. This article is general information, not legal advice; check the official text before acting.