Section 333 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 333 lets the Company Liquidator of a company being wound up give up property that is a burden rather than an asset. With the leave of the Tribunal, he can disclaim onerous land, shares, hard-to-sell property and unprofitable contracts by a signed writing, generally within twelve months of the commencement of the winding up.
The Company Liquidator may disclaim land burdened with onerous covenants, shares or stocks, property that is not readily saleable because of an onerous obligation, and unprofitable contracts. He needs leave of the Tribunal, must act by a signed writing within twelve months of the commencement of the winding up (or an extended period), and cannot disclaim if an interested person asks him to decide and he does not respond within twenty-eight days. A disclaimer ends the company's rights and liabilities in that property from the date of disclaimer.
What can be disclaimed
Section 333(1) lists four kinds of property forming part of the company's property.
| Clause | Property |
|---|---|
| (a) | Land of any tenure, burdened with onerous covenants |
| (b) | Shares or stocks in companies |
| (c) | Any other property not saleable or not readily saleable because the possessor is bound to perform an onerous act or pay a sum of money |
| (d) | Unprofitable contracts |
The liquidator may disclaim even if he has tried to sell the property, taken possession, exercised an act of ownership or done something under the contract.
Conditions and time limits
- Leave of the Tribunal. The disclaimer is made "with the leave of the Tribunal and subject to the provisions of this section".
- In writing, signed by the liquidator. The power is exercised "by writing signed by him".
- Twelve months. The disclaimer may be made at any time within twelve months after the commencement of the winding up, or such extended period as the Tribunal allows.
- Late discovery. Under the proviso, if the liquidator did not become aware of the property within one month from the commencement of the winding up, he may disclaim at any time within twelve months after he becomes aware of it, or within an extended period allowed by the Tribunal.
If you are a counterparty to a contract, a landlord or a holder of an interest in property that a liquidator may want to disclaim, our legal dispute resolution team can help you respond in time.
Effect of a disclaimer (sub-section 2)
The disclaimer ends, from its date, the company's rights, interest and liabilities in or in respect of the property disclaimed. It does not affect the rights, interest or liabilities of any other person, except so far as necessary to release the company and its property from liability. So a landlord or counterparty does not lose its own rights against third parties merely because the company has been released.
Tribunal's role (sub-section 3)
Before or when granting leave, the Tribunal may require notices to be given to persons interested, impose terms as a condition of leave and make any other order it considers just and proper. The Tribunal's control over terms is how the interests of landlords, lessees and counterparties are protected.
The 28-day trigger (sub-section 4)
A person interested in the property can apply in writing to the liquidator, requiring him to decide whether he will or will not disclaim. If, within twenty-eight days after receiving the application (or an extended period allowed by the Tribunal), the liquidator does not give notice that he intends to apply to the Tribunal for leave to disclaim, he loses the right to disclaim that property. Where the property is under a contract and he does not disclaim within that period, he is deemed to have adopted the contract.
This makes the 28-day notice a practical tool for the other party. Deemed adoption means the company, through the liquidator, takes on the contract's obligations.
Rescission, vesting and proof of loss
| Sub-section | Rule |
|---|---|
| (5) | On the application of a person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, the Tribunal may rescind the contract on terms as to payment of damages for non-performance or otherwise. Damages payable to that person may be proved as a debt in the winding up. |
| (6) | On the application of a person claiming an interest in disclaimed property, or under a liability not discharged under the Act in respect of it, the Tribunal may make an order vesting the property in, or delivering it to, a person entitled or to whom it seems just to deliver it by way of compensation, or a trustee for him, on such terms as it considers just. The property vests without any conveyance or assignment. |
| (6) proviso | For leasehold property, no vesting order in favour of a person claiming under the company (as under-lessee, mortgagee or holder of a charge by way of demise) unless he is made subject to the same liabilities and obligations as the company under the lease at the commencement of the winding up, or, if the Tribunal thinks fit, the same as if the lease had been assigned to him at that date. A mortgagee or under-lessee who declines those terms is excluded from all interest in and security on the property. If no person claiming under the company is willing, the Tribunal may vest the company's estate and interest in any person liable, personally or in a representative character, to perform the lessee's covenants, clear of estates, encumbrances and interests created by the company. |
| (7) | Anyone affected by the disclaimer is deemed a creditor to the amount of compensation or damages payable for that effect and may prove it as a debt in the winding up. |
Why a liquidator disclaims
A company in liquidation may hold land with heavy obligations, shares carrying liability for unpaid calls, or long-term contracts that lose money each month. Keeping them drains the estate. Disclaimer allows the liquidator to cut the loss and focus on realisable assets, while the Tribunal's leave and the affected parties' right to prove as creditors keep the process fair. Compare this with the liquidator's general powers in sections 290–292.
Practical examples
Example 1: unprofitable supply contract. A company being wound up is bound to supply goods at a price below cost for three more years. With leave of the Tribunal, the Company Liquidator disclaims the contract by a signed writing within twelve months. The buyer can prove for damages as a creditor under sub-section (7).
Example 2: landlord's notice. A landlord of premises held by the company writes to the liquidator asking whether he will disclaim the lease. The liquidator does not reply with notice of an application for leave within twenty-eight days. He can no longer disclaim, and a lease contract is deemed adopted under sub-section (4).
Example 3: shares. The company holds partly paid shares in another company. The liquidator obtains leave and disclaims them, ending the company's rights and liabilities in those shares from the date of disclaimer.
Proposed change (Corporate Laws (Amendment) Bill, 2026)
No clause of the Bill amends section 333. The Bill is pending and not law as on 30 September 2026.
Need help with a disclaimed contract or property?
Counterparties, landlords and lenders often have only a short window to respond once a liquidator considers disclaiming. We can explain the notice, time limits and options under the Act and help prepare your position. Speak to our legal dispute resolution team.
Key takeaways
- The Company Liquidator may disclaim onerous land, shares, hard-to-sell property and unprofitable contracts.
- He needs leave of the Tribunal and must disclaim by a signed writing within twelve months of the commencement of the winding up, or an extended period.
- A person interested can require him to decide; silence for twenty-eight days ends his right to disclaim and, for a contract, means it is deemed adopted.
- A disclaimer ends the company's rights and liabilities in the property from its date and does not affect others except as needed to release the company.
- The Tribunal may rescind contracts and make vesting orders on just terms.
- Affected persons can prove for compensation or damages as creditors.
- The Bill, 2026 does not amend section 333.
Read next
- Section 332: Effect of floating charge
- Section 335: Attachments void in winding up
- Powers and duties of the Company Liquidator
- Winding up by the 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.