| 69. |
Procedure for Issue of
Winding up order : |
| 1. |
Before passing an order under
section 75 the Registrar shall give
an opportunity to the society to
show cause against the proposed
order. The show cause notice shall
be sent to the president of the
society at its registered address by
registered post acknowledge due. The
notice shall state he grounds on
which the order under section 75 is
proposed to be made. |
| 2. |
After considering the reply from
the society, if any, which shall be
supported by the resolution of its
committee, or if no reply is
received by the Registrar within
fifteen days of the service of the
notice under sub-rule (1), he shall
proceed to pass the order for
winding up the society. |
|
3. |
The order passed
under passed under section 75 and
sub-section (1) of section 76 shall
communication to the president of
the society in the manner specified
under sub-section (4) of section 75
at the registered address of the
society. The communication will be
complete as soon as the letter
containing the order is posted. |
| 4. |
The order referred to in
sub-rule (3) shall also be published
in the official Gazette |
| 5. |
The order
referred to in sub-rule (3) shall
take effect from the date of order
notwithstanding whether or not it is
published in the official Gazette
and shall operate in favour of all
creditors. Contributors, debtors and
any person having custody,
possession and control over any
asset or record of the society. |
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|
70. |
Appointment
of the Liquidator : |
| 1. |
Where a
liquidator is appointment under
sub-section (1) of section 76, the
registrar may limit or restrict his
power by order appointment him or by
subsequent order but, otherwise, he
shall have the some powers as a
liquidator as given in the Act. |
| 2. |
The Registrar
may remove the liquidator at any
time without assigning any reasons
and may appoint another liquidator.
The liquidator on his removal shall
hand over all the property,
documents, record ect. Relating to
the society under liquidation to his
successor. A charge report to be
signed by the reliving liquidators
shall be drawn and a copy of the
same duly signed shall be forwarded
to the Registrar. |
| 3. |
The
liquidator shall be described as the
liquidator of particulars society in
respect of which he acts and by this
individual name. |
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| 71. |
Procedure
to be followed by the Liquidator : |
| 1. |
The liquidator
shall, as soon as the order of
winding up of a society takes
effects, publish by such means as he
think proper, a notice requiring all
claims against the society to be
submitted to him within one month of
the publication of the notice. All
liabilities recorded in the account
books of a society shall be deemed
ipso facto to have been duly
submitted to him this sub-rule. |
| 2. |
The liquidator
may fix within which creditors are
to prove their debts or claims. If
no claims is made within two months
of the order of winding up, the
liquidator may refuse to entertain
such claim. |
| 3. |
The liquidator
soon after his appointment shall
take charge of the books of accounts
and other document of the society
and all its assets. There shall be
prepared immediately on the relevant
date a statement as to the affairs
of the society containing the
following particulars: |
| a. |
the assets of
the society stating separately the
cash balance in hand and at bank, if
any, and the negotiable securities,
if any, held by the society ; |
| b. |
its debts and
liabilities : |
| c. |
the names and
addresses and occupation of its
creditors stating separately the
amount of secured and unsecured
debts and in the case of secured
debts, particulars of the securities
given; |
| d. |
the debts due to
the society and the names,
residences and occupations of the
persons from whom they are due and
amount due; and |
| e. |
Such other
information as may be required by
the Registrar. |
| 4. |
The statement
required to be prepared under
sub-rule (3) shall be made on the
basis of the records of the society,
audit reports and on the basis of
the statement made by the members of
the committed at the relevant date
or the persons who is at that date,
the Manager, secretary or Treasurer
or other officer of the society. The
liquidator shall examine them on
oath. This statement shall be
submitted by the liquidator to the
Registrar within twenty one days of
the date of his appointment or
within such extended time not
exceeding three month from the date
of the said order. |
| 5. |
The liquidator
shall, after settling the assets and
liabilities of the society as they
stood on the date, on which the
order for winding up is made,
proceed next to determine the
contribution to be made by each of
its members or by the estates of
deceased members or nominees, heirs
or legal representatives of the
deceased member of by any officers
or formed officers to the assets of
the society under clauses (b) and
(c) of sub-section (2) of section
77. Should necessity arise. He my
make a subsidiary order regarding
such contributions and the order
shall be enforceable in the same
manner as the original order. |
| 6. |
As soon as
practicable after orders under
sub-rule (5) have been passed, the
liquidator shall settle a list of
contributions with power to rectify
the membership register in pursuance
of any order which may be passed by
the arbitrator or the Registrar in
accordance with the provisions of
the Act and Rules and shall cause
the assets to be collected. |
| 7. |
n settling the
list referred to in sub-rule (6),
the liquidator shall distinguish
between those who are contributors
in their own right and those who are
contributors as representatives of
or liable for the debts of other. |
| 8. |
The liquidator
may at any time after his
appointment require any contributor
the time being on the list of
contributors any trustee, banker,
agent or officer of the society to
pay, deliver, surrender or transfer
forthwith to the liquidator any
money, property or books or paper in
his hands to which the society is
prima-facie entitled. |
| 9. |
NO contributor
for the time being on the list shall
be allowed by way of set off any
money claimed to be due to him or to
the estate he represents, from the
society in respect of any
independent dealing or contract with
the society. |
| 10. |
All funds in
charge of the liquidator shall be
deposited in the financing bank in a
current account to be opened in the
name of the society under
liquidation which shall be operated
upon by the liquidator. All funds
received by him and relating to the
society under liquidation shall be
deposited by him in this account
within 24 hours of their receipt.
All payment on account of the
society shall be made by cheque
drawn by the liquidator in favour of
the payee. The liquidator may keep
with him a cash balance of Rs. 20 to
meet petty expenses on liquidator
proceedings. |
| 11. |
Any order
passed by the liquidator under
clauses (b)and (e) of sub-section
(2) of section 77 shall be submitted
by him to the Registrar for his
approval. The Registrar may confirm
or modify such order or refer it
back to the liquidator for further
enquiry or action. |
| 12. |
Any person
falsely claiming himself as the
creditor or the contributory of
society shall be guilty of the
offence under section 182 of the
Indian Panel Code (Act XIV of 1860 )
and shall on the application of the
liquidator be punished accordingly. |
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| 72. |
Application
of Assets of the society : |
| |
Subject to the
provisional of rule 73 the assets of
the society shall be applied in
order of priority indicated below |
| i. |
Pro-rata payment
of all outside liabilities |
| ii. |
Pro-rata payment
of loans and deposits of members |
| iii. |
pro-rata
refunds of share capital |
| iv. |
Pro-rata payment
of dividend on the shares at the
rate not exceeding nine percent per
annum for the period of liquidation |
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|
| 73. |
Preferential
Payment : |
| 1. |
In the winding
up proceeding there shall be paid in
priority to all other debts and
liabilities of the society under
liquidation |
| a. |
And Government
dues, all revenue, taxes, cease and
rates due from the society to the
Central/State Government or to the
local authority at the relevant date
and having become due and payable
within two years next before that
date. |
| b. |
All wages or
salaries of any employee in respect
of services rendered to the society
and due foe the period not exceeding
two months within the twelve months
next before the relevant date
subject to maximum of Rs. 500. |
| c. |
The debts
mentioned in the clauses (a) and (b)
shall rank equally amongst
themselves and be paid in full
unless the assets are insufficient
to them in which case they shall
abate in equal portion
Subject to retention of such sums as
may be necessary for the cost a and
expenses of the winding up, the
foreign debts mentioned I sub-rule
(1) shall be discharged forth with
to the extent the assets are
sufficient to meet them. |
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| 74. |
Interest on
amount due from a society under
liquidation : |
| |
The creditor of
a society under liquidation may
apply to the liquidator for payment
of interest on any debts due to him
from the society up to the date of
order of the Registrar for winding
up. The rate at which the interest
may be paid shall be, in the case of
the financing bank, the contract
rate and in any other case the rate
which may be fixed by the Registrar
which shall not exceed the contract
rate. Provided that if any surplus
assets remain after all the
liabilities including the
liabilities on share have been paid
off, further interest at rate not
exceeding contract rate may be by
the Registrar to the creditors from
the date mentioned above till the
date of repayment of the principal. |
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| 75. |
Liability
due to claimant whose where about
not known : |
| |
The amount
representing the undercharged
liabilities of the society due to
creditors whose where about are not
known or who could not be paid for
any reasons whatever shall be
deposited in the name of the
registrar with the financing bank
for being paid to the creditor as
and when claimed by him but within a
period of three years from the date
of winding up order : thereafter the
amount shall be treated as surplus
amount and shall be utilized in the
manner mentioned in rule 81. The
Registrar may, under special
circumstance, pay the liabilities
claimed even after the stipulated
period of three years. |
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| 76. |
Maintenance
of accounts and submission reports
by the liquidator : |
| 1. |
The liquidator
shall keep such books and accounts
as may be laid down by the Registrar
of audit officer. |
| a. |
The liquidator
shall prepare as at the close of
each half years an account of his
receipts and payments a liquidator.
A senior auditor shall be appointed
by the Registrar as the audit
officer who shall audit those
accounts on behalf of the Registrar.
When accounts are audited by the
audit officer, one copy shall be
kept by the audit officer and the
other returned to the liquidator
with his report`. The liquidator
shall produce for purposes of audit
all vouchers and accounts and shall
furnish such information as may be
required by the audit officer. The
liquidator shall rectify all
irregularities and defects pointed
out by audit officer to satisfaction
and shall submit to him a
rectification report. |
| 3. |
No audit fee
shall be charged for audit of the
account under this rule. |
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| 77. |
Service
of Legal Practitioner: |
| |
Whenever it is
considered necessary by the
liquidator to defend or to institute
any legal proceeding for and on
behalf of the society under
liquidation, he shall approach the
Registrar who shall after
considering all the facts and
circumference of the case, provide
the services of the legal
practitioner at the cost of society
under liquidation, if the Registrar
or the Government has been impleaded
in such proceedings the cost of
defending them by the Registrar or
the Government shall also be paid
out of the Funds of the society. If
no funds are available with the
liquidator arrangements shall be
made at Government expenses but the
cost of such arrangement shall be
ultimately recovered from the
contributories and paid to the
Government as preferential debt
under clause (a) of sub –rule (1) of
rule 73. |
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| 78. |
Action
against the delinquent promoters or
members of the committee : |
| |
The liquidator
shall make a report to the Registrar
for purpose of taking action under
section 70, where, in his opinion,
any fraud has been committed in
relation to the society by any
person in the promotion,
organization, registration or
management of the society under
liquidation since its registration
or any deficiency in the assets of
the society has been caused by the
breach of trust, or willful
negligence or by retaining any money
or other property belonging to the
society. This report shall be
submitted to the Registrar as soon
as practicable after preparation of
the statement referred to in
sub-rule (3) of rule 71. On receipt
of this report, the Registrar shall
proceed to take action under Section
70. |
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| 79. |
Effect of
winding up order on Antecedent
Transaction : |
| 1. |
Any transfer of
shares in a society under
liquidation made within six month
next before the relevant data except
transfer of share to the deceased
members’ heirs or nominee, shall be
void and not binding upon the
liquidator notwithstanding anything
contained in the Act, Rules or the
bye-laws of society. |
| 2. |
Where a society
has been ordered to be wound up, no
member shall alienate his property,
movable or immovable, from the date
of the order of winding up and until
after the expiry of 15 days from the
date such order takes effects. Any
alienation of the property made by a
member in contravention of this
section is voided at the opinion of
the liquidator.
Provided that the provisions of this
section shall not apply to any
member who furnishes adequate
security to the satisfaction of the
liquidator. |
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| 80. |
Termination
of Liquidation Proceeding : |
| 1. |
The winding up
proceeding of the society shall be
completed within one years from the
date of the winding up, unless the
period is extended by the Register.
Provided that the Registrar shall
not grant extension for a period
exceeding six months at a time and
three years in the aggregate and
shall immediately after the expiry
of one years or such extended
period, as the case may be, deem
that the liquidation proceedings
have been terminated if there are no
amounts due to the Government or the
financial bank by the society and
pass an order terminating the
liquidation proceedings. |
| |
Explanation
|
| |
In
the case of society which is under
liquidation at the time of
commencement of the Act, the order
for winding up of the society shall
be deemed for the purpose of this
rule to have been passed on the date
of such commencement. |
| 2. |
Notwithstanding
anything contained in the foregoing
sub-rule the Registrar shall
terminate the liquidation proceeding
on receipt of the final report from
the liquidator. The final report of
the liquidator shall state that the
liquidation proceeding of the
society have been closed and how the
winding up has been conducted and
the property and the claims of the
society have been disposed and shall
include a statement showing a
summary of the account of the
winding up including the cost of
liquidation, the amount (if
any)standing to the credit of
society in liquidation, after paying
of the liabilities including the
share or interest of members, and
suggest how the surplus should be
utilized. |
| 3. |
The liquidator
before submitting the final report
to the Registrar under Sub-Rule (2)
may call a meeting of general body
of the society and place the report
before it. |
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| 81. |
Disposal of
Surplus Assets : |
| |
The surplus
assets, as shown in the final report
of the liquidator of a society which
has of the Government amongst its
members in such manner as may be
specified or be devoted to any
object or objects provided in the
Bye-laws of the society. Where the
surplus is not so dividing amongst
the members and the society has no
such Bye-laws, the surplus shall
vest in the Registrar, who shall
hold it in-trust and shall transfer
sit to the reserve fund of a new
society registered with a similar
object, and serving more or less an
area which the society to which the
surplus belonged was serving if
considered feasible and advisable by
the Registrar. |
| |
Provided that,
where no such society exists or is
registered within three years of the
cancellation of registration of the
society whose surplus is vested in
the Registrar, or where the
Registrar does not think it
desirable and feasible to do so he
may distribute the surplus in the
manner he think best, among any or
all of the following; |
| a. |
an object of
public utility and of local interest
as may be recommended by the members
in general meeting; |
| b. |
the
financing bank or a federal society
with similar object to which the
society of which registration has
been cancelled, was eligible for
affiliation; and |
| c. |
any charitable
purpose as defined in section 2 of
the Charitable Endowments Act, 1980. |
|
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| 82. |
Relevant Date
: |
| |
The expression
‘relevant date’ as appearing in this
chapter shall mean the date of order
of winding up make under sub section
(1) of section 75. |
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| 83. |
Disposal of
Record : |
| |
All the books
and records of a society whose
registration has been cancelled may
be destroyed under the order of the
Registrar after the expiry of a
period of three years from the date
of cancellation. |
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| 84. |
Final Order
of Cancellation : |
| |
The order made
by the Registrar under sub section
(1) of section 79 also be published
in the official Gazette. |
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