Companies Act Section 372 — Power of Court to stay or restrain proceedings

CHAPTER XXI

Commercial / Corporate

Summary

This section deals with the power of a court to stop or pause legal cases against a company. The rules in this Act, or in the Insolvency and Bankruptcy Code, about stopping or restraining lawsuits and other legal actions against a company, apply during the period after a winding-up petition is presented but before a winding-up order is actually made. In the case of a company registered under this particular Part, if the request to stop or restrain the proceedings is made by a creditor, these rules also extend to lawsuits and other legal actions against any contributory of the company.

Official Text

The provisions of this Act 1[or of the Insolvency and Bankruptcy Code, 2016 (31 of 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.