Power of Court to stay or restrain proceedings

The provisions of this Act or of the Insolvency and Bankruptcy Code, 2016, as the case may be, with respect to staying and restraining suits and other legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order, shall, in the case of a company registered in pursuance of this Part, where the application to stay or restrain is by a creditor, extend to suits and other legal proceedings against any contributory of the company.

Notes, amendments & references (4)

Inserted vide The Insolvency and Bankruptcy Code, 2016. To view the amendment, Click Here

Company means a company incorporated under this Act or under any previous company law

Contributory means a person liable to contribute towards the assets of the company in the event of its being wound up.

Explanation.—For the purposes of this clause, it is hereby clarified that a person holding fully paid-up shares in a company shall be considered as a contributory but shall have no liabilities of a contributory under the Act whilst retaining rights of such a contributory