Section 295- Payment of Debts by Contributory and Extent of Set-Off

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According to Section 295 of The Companies Act, 2013,

(1) The Tribunal may, at any time after passing of a winding up order, pass an order requiring any contributory for the time being on the list of contributories to pay, in the manner directed by the order, any money due to the company, from him or from the estate of the person whom he represents, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act.

(2) The Tribunal, in making an order, under sub-section (1), may, —

(a) in the case of an unlimited company, allow to the contributory, by way of setoff, any money due to him or to the estate which he represents, from the company, on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and

(b) in the case of a limited company, allow to any director or manager whose liability is unlimited, or to his estate, such set-off.

(3) In the case of any company, whether limited or unlimited, when all the creditors have been paid in full, any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

As per Section 295 Sub Section (1), anytime after passing of a winding up order, the Tribunal may pass an order requiring any contributory present in the list of contributories pay, in the manner directed by the order, any money due to the company, from a contributory or anyone representing from the estate, exclusively any money payable by the contributory or estate by virtue of any call-in pursuance of this Act.

Sub Section (2), while making an order under sub section (1), the Tribunal can

(a) In the case of an unlimited company, it can allow the contributory to reduce any money due to him or to the representing estate, company, or any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and

(b) Any director or manager is allowed whose liability is unlimited, or to his estate, such set-off, in case of a limited company.

Sub Section (3), any company which is either limited or unlimited can be allowed by way of set-off against any subsequent call when all the creditors have paid in full, any money due on any account whatever to a contributory from the company.