Chapter XIV - Inspection, Inquiry and Investigation
Section 226
Section 226: voluntary winding up of company, etc., not to stop investigation proceedings
Section 226 prevents a company from escaping an investigation under Chapter XIV by starting a winding up or by pointing to oppression proceedings. An investigation can still begin, and an ongoing one is not stopped or suspended, merely because of those events.
On this page
Need advice on Section 226?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
An investigation under this Chapter may be initiated notwithstanding, and no such investigation shall be stopped or suspended by reason only of, the fact that—(a) an application has been made under section 241; (b) the company has passed a special resolution for voluntary winding up; or (c) any other proceeding for the winding up of the company is pending before the Tribunal: Provided that where a winding up order is passed by the Tribunal in a proceeding referred to in clause (c), the inspector shall inform the Tribunal about the pendency of the investigation proceedings before him and the Tribunal shall pass such order as it may deem fit: Provided further that nothing in the winding up order shall absolve any director or other employee of the company from participating in the proceedings before the inspector or any liability as a result of the finding by the inspector.
Introduction
Section 226 commenced on 15 December 2016 under S.O. 3677(E). The India Code text shows no amendment and matches the 2013 Gazette.
Key takeaways
Three events do not stop an investigation
An application under section 241, a special resolution for voluntary winding up, or any other winding up proceeding pending before the Tribunal.
Inspector informs the Tribunal
If the Tribunal passes a winding up order in pending proceedings, the inspector must tell it about the investigation, and the Tribunal passes such order as it thinks fit.
No escape for directors
A winding up order does not absolve any director or employee from taking part in the inspector’s proceedings or from liability arising from the findings.
Investigation continues
An investigation under Chapter XIV may be initiated notwithstanding, and no such investigation is stopped or suspended by reason only of, the fact that (a) an application has been made under section 241, (b) the company has passed a special resolution for voluntary winding up, or (c) any other proceeding for winding up of the company is pending before the Tribunal.
Where a winding up order is made
Under the first proviso, if the Tribunal passes a winding up order in a proceeding referred to in clause (c), the inspector must inform the Tribunal that the investigation is pending, and the Tribunal passes such order as it deems fit.
Under the second proviso, nothing in the winding up order absolves any director or other employee from participating in the proceedings before the inspector, or from any liability resulting from the inspector’s findings.
Practical preparation
Do not plan a voluntary winding up as a way to end an investigation; keep directors and employees available to the inspector even after a winding up order; and tell the liquidator about any pending investigation so that records are preserved.
Procedure, forms, fees and timelines for applications under this provision are set out in rules made under the Act and in the Tribunal’s procedure; check the current text of those rules, and any exemption notification for your class of company, before relying on this guide.
Practical checklist
Do
- Keep cooperating with the inspector while any winding up proceeds.
- Preserve books and papers for the inspector even after a winding up order.
Avoid
- Do not treat a special resolution for voluntary winding up as ending the investigation.
Illustrative example
Hypothetical: winding up during an investigation
While an inspector is investigating a company, a creditor’s winding up petition results in a winding up order.
Inform
The inspector informs the Tribunal that the investigation is pending.
Order
The Tribunal passes such order as it deems fit.
Directors
Former directors must still appear before the inspector and remain exposed to liability on the findings.
Outcome
- The investigation and the winding up proceed in step under the Tribunal’s directions.
Glossary
- Voluntary winding up
- Winding up started by the company itself through a resolution of its members.
- Section 241 application
- An application to the Tribunal for relief against oppression or mismanagement.
Frequently asked questions
Can a company stop an investigation by winding itself up?
No. A special resolution for voluntary winding up does not stop or suspend an investigation under Chapter XIV, and one can still be started.
Are directors released once a winding up order is made?
No. The second proviso says a winding up order does not absolve any director or employee from participating in the inspector’s proceedings or from liability arising from the findings.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026