Companies Rules 2006
Rules, 1959
[GSR 950, dated
In exercise of the powers conferred by
sub-sections (1) and (2) of section 643 of the Companies Act, 1956, and of all
other powers enabling, the Supreme Court of India, after consulting the High
Courts, hereby makes the following Rules:—
General
1. These rules shall be cited as ‘The Companies
(Court) Rules, 1959’ and shall come into force on the 1st day of October, 1959.
2. In
these Rules, unless the context or subject-matter otherwise requires,—
(1) “The Act” means the Companies Act, 1956.
(2) dvocate” means, in the case of a High Court having ordinary original jurisdiction, every person entitled to appear and plead in such jurisdiction of such High Court, and includes an Attorney of such Court, and in the case of every other High Court, every person entitled to appear and plead in such High Court, and in the case of a District Court every person entitled to appear and plead in such Court:
Provided that in respect of the service of notices and processes which under
these rules may be served on an Advocate on behalf of any party, or the filing
of an appearance on behalf of any party, ‘Advocate’ shall mean only a person
entitled to act for a party under the rules of the Court, whether or not he is
entitled also to plead.
(3) ‘Certified’ means, in relation to a
copy, certified as provided in section 76 of the Indian Evidence Act, 1872.
(4) ‘Code’ means the Code of Civil Procedure, 1908.
(5) ‘Court’ means the Court having jurisdiction under the Act.
(6) ‘Filed’ means filed in the Office of the Registrar.
(7) ‘High Court’ and ‘District Court’ mean
respectively the High Court and District Court having jurisdiction under the
Act.
(8) ‘Judge’ means, in the High Court,
the Judge for the time being exercising the jurisdiction of the High Court
under the Act, and in the District Court, the Judge of that Court exercising
jurisdiction under the Act.
(9) ‘Judge’s summons’ means a summons returnable before the Judge in Chambers or in Court.
(10) ‘Prescribed’ means prescribed by these
Rules; and ‘prescribed charges’ and ‘prescribed fees’ means charges or fees
prescribed by these Rules and where they are not so prescribed, prescribed by
the Rules of the Court in respect of analogous matter in its other proceedings.
(11) ‘Registrar’ means, in the High Court,
the Registrar of the High Court, and includes the Prothonotary, Master and
Assistant Master, and such other officer as may be authorised by the Chief
Justice to perform all or any of the duties assigned to the Registrar under
these Rules, and in the District Court, such officer of that Court as may be authorised
by the High Court to perform all or any of the duties assigned to the Registrar
under these Rules.
(12) ‘Reserve Bank’ means
the Reserve Bank of
(13) ‘The Rules’ means these Rules, and includes the prescribed Forms.
(14) ‘Sealed’ means sealed with the seal of the Court.
(15) ‘Section’ means section of the Act.
Save as
aforesaid, and unless the context otherwise requires, words and expressions
contained in these Rules shall bear the same meaning as in the Act, and the
General Clauses Act, 1897 (X of 1897) shall apply for the interpretation of
these Rules as it applies for the interpretation of an Act of Parliament.
Proceedings to be neat and legible.
3. All petitions, applications, affidavits and
other proceedings presented to the Court shall be written, typewritten,
cyclostyled, or printed neatly and legibly on substantial paper of foolscap
size, and separate sheets shall be stitched together. Numbers and dates shall
be expressed in figures, and where dates given are not according to the English
Calendar, the corresponding English dates shall also be given.
4. Every proceeding shall be dated and
shall be instituted in the matter of the Companies Act, 1956, and in the matter
of the company to which it relates. The contents shall be divided into separate
paragraphs which shall be numbered serially. The general heading in all
proceedings before the Court, and in all advertisements and notices, shall be
in Form No. 1.
5. Every petition, application, affidavit
or other proceeding shall be in the language of the High Court, and except in
so far as the Court may otherwise order, no document in a language other than
the language of the High Court shall be accepted for use in any proceeding,
unless translated into the language of the High Court in accordance with the
Rules and practice of the Court.
Practice and procedure of the Court and provisions of the Code
to apply.
6. Save as provided by the Act or by these Rules,
the practice and procedure of the Court and the provisions of the Code so far
as applicable, shall apply to all proceedings under the Act and these Rules.
The Registrar may decline to accept any document which is presented otherwise
than in accordance with these Rules or the practice and procedure of the Court.
Power of Court to enlarge or abridge time.
7. The Court may, in any case in which it
shall deem fit, extend or abridge the time appointed by these Rules or fixed by
an order of the Court for doing any act or taking any proceeding, upon such
terms (if any) as the justice of the case may require, and any such enlargement
may be ordered although the application for the same is not made until after
the expiration of the time appointed or allowed.
8. (a) Where any particular number of days not
expressed to be clear days is prescribed, the same shall be reckoned
exclusively of the first day and inclusively of the last day, unless the last
day shall happen to fall on a day on which the offices of the Court are closed,
in which case the time shall be reckoned exclusively of that day also and of
any succeeding day or days on which the offices of the Court continue to be
closed.
(b) Where any particular number of days expressed to be clear days,
is prescribed, the same shall be reckoned exclusively of both the first and the
last day.
9. Nothing in these Rules shall be deemed
to limit or otherwise affect the inherent powers of the Court to give such directions
or pass such orders as may be necessary for the ends of justice or to prevent
abuse of the process of the Court.
10. Unless otherwise provided by these rules
or permitted by the Judge, all applications under the Act shall be made by a
petition or by a Judge’s summons as hereinafter provided.
11. (a) The following
applications shall be made by petition :—
(1) Applications under section 17 to
confirm an alteration of the memorandum of association.
(2) Applications under section 79 to sanction issue of shares at a
discount.
(3) applications under section 101 to confirm reduction of share
capital.
(4) applications under section 107 to
cancel any variation of the rights of holders of any class of shares.
(5) Applications under section 141 for rectification of the register
of charges.
(6) Applications under section 155 for rectification of the Register
of Members.
(7) Applications under section 186 by a
Director or Member of a Company for calling a meeting of the Company.
(8) Applications under section 203 to
restrain a fraudulent person from managing companies, or for leave by a person
restrained to be a director of, or to manage, a company.
(9) Applications under section 237 for an order that the affairs of a company ought to be investigated.
(10) Applications under section 391(2) to sanction a compromise or
arrangement.
(11) Applications under section 395(1) or 395(2)
for the purpose of preventing, or settling the terms, of the acquisition by a
transferee company of the shares of a dissenting shareholder.
(12) Applications under section 397 for relief against oppression.
(13) Applications under section 398 for relief in case of mismanagement.
(14) Applications under section 407(1)(b)
by a director or manager, whose agreement is terminated for leave to act as the
managing or other director or manager of the company.
(15) Applications under section 439 for the
winding-up of a company, or under section 583 for the winding-up of an
unregistered company, or under section 584 for the winding-up of a foreign
company.
(16) Applications under section 517 to set
aside an arrangement between a company about to be or in the course of being
wound-up (voluntarily) and its creditors.
(17) Applications under section 522 to
continue a voluntary winding up subject to the supervision of the Court.
(18) Applications for a declaration under
section 542 (XI Schedule) in the course of proceedings under section 397 or 398
that a person who was knowingly a party to carry on business in a fraudulent
manner shall be personally liable for all or any of the debts or other
liabilities of the company.
(19) Applications by a creditor or member under
section 543 (XI Schedule) in the course of proceedings under section 397 or
398, to enquire into the conduct of any of the persons mentioned in section 543
(XI Schedule) and compel him to repay or restore any money or property to the
company or pay compensation.
(20) Applications under section 559 for declaring the dissolution of a
company void.
(21) Applications under section 560(6) to
restore a company’s name to the Register of Companies.
(22) Applications under section 579 to
confirm the alteration in the form of the constitution of a company by
substituting a memorandum and articles for a deed of settlement.
(23) Applications under section 633(2) by an officer of a company for
relief.
(b) Judge’s summons - All other applications under the Act or under these Rules shall be made by a Judge’s summons, returnable to the Judge sitting in Court or in Chambers as hereinafter provided.
Matters to
be heard in open Court and in Chambers.
12. (a) The following matters shall be heard in open Court:—
(1) Petitions.
(2) Applications under section 43 for
relief in case of default by a private company in complying with the provisions
of its articles.
(3) Applications under section 75(4) for
relief in case of default in delivering documents to the Registrar of Companies.
(4) Applications under section 89(3) for
directions regarding termination of disproportionately excessive voting rights
in existing companies.
(5) Applications under section 250 for a
direction that shares or debentures shall cease to be subject to restrictions
imposed by the Central Government under the said section.
(6) [Omitted]
(7) [Omitted]
(8) Applications under section 391(1)
for convening meetings of creditors and/or members of a company or any class of
them.
(9) Proceedings under section 394 for reconstruction or amalgamation
of companies.
(10) Public examination under section 478 or section 519.
(11) Applications for a declaration under
section 542 that a person who was knowingly a party to carrying on business in
a fraudulent manner shall be personally liable for all or any of the debts or
other liabilities of the company.
(12) Applications under section 543 to
enquire into the conduct of a promoter, director, etc., and compel him to repay
or restore any money or property to the company or pay compensation.
(13) Applications under section 545(1) for
prosecution of delinquent officers and members of a company.
(14) Applications under section 555(7) by a
person claiming to be entitled to any money paid into the Companies Liquidation
Account.
(15) Applications for committal of any person for contempt.
(16) Appeals from any act or decision of the Official Liquidator.
(17) Applications relating to the admission or rejection of proofs.
(18) Such other matters and applications as
the Judge may from time to time by general or special order direct to be heard
in open Court:
Provided that the Court may, if it thinks fit, direct that the hearing or any
part of the hearing of any of the said matters, shall be held in Chambers.
(b) Every other matter or application may be
heard and determined in Chambers provided that the Judge may adjourn any such
matter into Court.
13. There shall be kept, in every Court, the following
Registers, relating to proceedings under the Act and these Rules:—
(1) Company Petitions Register
in which shall be entered and numbered serially all the petitions filed under
the Act or these Rules with particulars as to:—
(1) Date of presentation,
(2) Name of Company,
(3) Names of parties and their Advocates,
(4) Provision of law under which the petition is made,
(5) Nature of relief sought,
(6) Date and nature of order made,
(7) Date of filing of appeal, if any,
(8) Date of disposal of appeal, and
(9) Result of judgment in appeal.
(2) Company
Applications Register in which shall be entered and numbered serially all
applications other than petitions with particulars as to:—
(1) Date of presentation,
(2) Name of Company,
(3) Number of main proceeding, if any, to which the
application relates,
(4) Names of parties and their Advocates,
(5) Provision of law, if any, under which the application is
made,
(6) Nature of relief sought,
(7) Date and nature of order made,
(8) Date of filing of appeal, if any,
(9) Date of disposal of appeal, and
(10) Result of judgment in appeal.
(3) Liquidations Register in
which shall be entered company-wise, under a separate heading for each company
ordered to be wound-up, briefly and in chronological order, all proceedings in
winding-up until conclusion of the winding-up.
(4) Company documents Register
in which shall be entered under a separate heading for each company any
valuable securities such as negotiable instruments, documents of title and the
like that may be filed in proceedings before the Court.
(5) Appearance Book in which
shall be entered the appearances filed by or on behalf of any creditor or
contributory under rule 230(2) of these Rules.
Nothing in this
rule shall affect the discretion of the Court to direct the keeping of any
other Register that may be deemed necessary.
14. Every
petition or application shall bear its distinctive serial number, and an
interlocutory application shall bear, besides its own serial number, the
serial number of the main proceeding to which it relates. Every order made,
process issued or document filed, shall bear the serial number of the
proceeding to which it relates.
15. All
petitions, applications and affidavits, upon being filed, and all orders,
summonses, warrants or processes of any kind (including notices issued by
Court) and certified copies of any proceedings, shall be sealed.
Inspection
and copies of proceedings.
16. Save
as otherwise provided in these Rules, the rules of the Court for the time being
in force relating to search and to the certification and grant of copies,
including the fees and said charges payable for the same, shall apply to
proceedings under the Act and these Rules, as they apply to other proceedings
in the Court.
17. The Forms set forth in Appendix I, where
applicable, shall be used with such variations as circumstances may require.
18.(a) Every affidavit shall be drawn upon the
first person and shall state the full name, age, occupation and the place of
abode of the deponent. It shall be signed by the deponent and sworn to in the
manner prescribed by the Code or by the rules and practice of the Court.
(b) Every
exhibit annexed to an affidavit shall be marked with the number of the
proceeding to which it relates, and shall be initialled and dated by the
authority before whom it is sworn.
(c) Except
with the leave of the Judge, no affidavit having an interlineation, alteration
or erasure, shall be filed in Court unless such interlineation or alteration is
initialled by the authority before whom it is sworn, or, in the case of an
erasure, the words and figures written on the erasure are re-written in the
margin and initialled by such authority.
Form of
Judge’s summons and service thereof.
19.(1) A Judge’s summons shall be in Form No. 2
and shall, unless otherwise provided by these rules or permitted by the Judge,
be supported by an affidavit.
(2) The
summons, together with a copy of the affidavit, shall be served upon every
person against whom an order is sought and such other person as the Judge may
direct, in person or by pre-paid registered post, or upon his Advocate, where
he appears by Advocate, or in such other manner as the Judge may direct.
(3) Unless
otherwise provided by these rules or by an order of Court, a summons which is
an interlocutory application in a proceeding, shall be served not less than 4
clear days before the day named in the summons for the hearing thereof, and
where the summons is other than interlocutory, it shall be served not less than
fourteen days before the date fixed for the hearing thereof.
20. Every
summons, together with duplicates of the same for service thereof, shall be
prepared by the applicant or his Advocate and issued from the office of the
Registrar.
21. Every petition shall be verified by an
affidavit made by the petitioner or by one of the petitioners, where there are more
than one, and in case the petition is presented by a body corporate, by a
director, secretary or other principal officer thereof; such affidavit shall be
filed along with the petition and shall be in Form No. 3:
Provided that the Judge or Registrar may, for sufficient reason, grant leave to
any other person duly authorised by the petitioner to make and file the
affidavit.
22.
Unless dispensed with by the Judge or Registrar, every petition and
application mentioned in Appendix II hereof, shall be accompanied by the
documents set opposite thereto in column 4 of the said Appendix.
[Note: Where the minute book of the
company is required to be produced, a copy of the relevant minute, certified by
the company to be a true copy, may be filed along with the minute book, and
after the copy has been checked with the original, the Registrar may return the
minute book to the company on its undertaking to produce the same when
required. Before returning the minute book, the Registrar shall initial the
relevant page or pages of the book for subsequent identification.]
23. (a) Where a petition is presented under
paragraphs (1), (3), (4), (22) and (23) of rule 11, an application shall, in
every case, be made by summons to the Judge in Chambers for directions as to
the advertisement of the petition, the notices to be served and the proceedings
to be taken. Except where, in any particular case, a different form is
prescribed by these Rules, such summons shall be in Form No. 4.
(b) The
summons shall be posted for hearing before the Judge in Chambers at the next
Chamber sittings, and the Judge may make such orders thereon and may give such
directions as may seem to him appropriate.
(c) No summons for directions shall be necessary
in the case of other petitions, but the petition shall, upon admission, be
placed before the Judge in Chambers for fixing the date of hearing and
directions as to the advertisement of the petition and the notices to be
served, and such other directions as may be necessary.
24. (1)Where any petition is required to be
advertised, it shall, unless the Judge otherwise orders, or these Rules otherwise
provide, be advertised not less than fourteen days before the date fixed for
hearing, in one issue of the Official Gazette of the State or the Union
Territory concerned, and in one issue each of daily newspaper in the English
language and a daily newspaper in the regional language circulating in the
State or the Union Territory concerned, as may be fixed by the Judge.
(2) Except
in the case of a petition to wind-up a company, the Judge may, if he thinks
fit, dispense with any advertisement required by these Rules.
25. Except as otherwise provided in these rules,
such advertisement shall be in Form No. 5, and shall state the date on which
the petition was presented, the name and address of the petitioner and his
advocate, the nature of the petition and the date fixed for hearing. It shall,
unless otherwise ordered further state that any person who intends either to
oppose or support the petition at the hearing should send notice of his
intention to the petitioner or his advocate so as to reach him not later than
two days previous to the day fixed for the hearing, and in the case of a
petition for a winding-up, not later than 5 days previous to the day fixed for
the hearing of the petition.
26.
Every petition shall be served on the respondent, if any, named in the petition
and on such other persons as the Act or these Rules may require or as the Judge
or the Registrar may direct. Unless otherwise ordered, a copy of the petition
shall be served along with the notice of the petition.
Notice of
petition and time of service.
27.
Notice of every petition required to be served upon any person shall be in Form
No. 6, and shall, unless otherwise ordered by Court or provided by these Rules,
be served not less than 14 days before the date of hearing :
[Provided always that such notice when
by the Act or under these Rules is required to be served on the Central
Government, the same shall, unless otherwise ordered by the court, be served
not less than 28 clear days before the date of hearing.]
28. (1) Where a petition is presented against a
company, it shall be accompanied by a notice of the petition in the prescribed
Form together with a copy of the petition for service on the company and an
envelope addressed to the company at its registered office or its principal
place of business and sufficiently stamped for being sent by registered post
for acknowledgement. The Registrar shall immediately on the admission of the
petition send the notice together with the copy of the petition to the company
by registered post.
(2) Every
petition and, save as otherwise provided by these Rules or by an order of
Court, every application, shall, unless presented by the company, be served on
the company at its registered office, or, if there is no registered office, at
its principal or last known principal place of business, by leaving a copy
thereof with an officer or employee of the company, and in case no such person
is available, in such manner, as the Judge or Registrar may direct, or, by
sending a copy thereof by pre-paid registered post addressed to the company at
its registered office, or, if there is not registered office, at its principal
or last known principal place of business, or to such person and at such address
as the Judge or Registrar may direct.
Where the company is being wound-up, the
petition or application shall also be served on the liquidator, if any,
appointed for the purpose of winding-up the affairs of the company.
29.
Save as otherwise provided by these Rules and subject to any directions of the
Judge or Registrar, the petitioner, applicant or any other person having the
conduct of proceedings in Court, shall be responsible for the service of all
notices, summons and other processes and for the advertisement and publication
of notices, required to be effected by these Rules or by order of Court.
30.(1) An
affidavit or affidavits stating whether the petition has been advertised as
prescribed by rule 24 and whether the notices if any have been duly served upon
the persons required to be served shall be filed not less than 3 days before
the date fixed for hearing. Such proof of the advertisement or of the service,
as may be available, shall be filed along with the affidavit.
(2) An affidavit of service on a company or its
liquidator shall be in Form No. 7 or 8, as the case may be.
Procedure
on default of compliance as regards advertisement and service of notice.
31. In default of compliance with the
requirements of the Rules or the directions of the Judge or Registrar, as
regards the advertisement and service of the petition, the petition shall, on
the date fixed for hearing be posted for orders of the Judge and the Judge may
either dismiss the petition or give such further directions as he thinks fit.
Mode of
service and service when deemed to be effected.
32. (1) Save as otherwise provided by these Rules
or by an order of Court; all notices, summonses, and other documents required to
be served on any person, may be served either personally by delivering a copy
thereof to such person, or upon his advocate where he appears by advocate or,
except where personal service is required, by pre-paid registered post for
acknowledgement due addressed to the last known address of such person. In the
case of service by registered post where no acknowledgement signed by the
addressee or his duly authorised agent is received, orders of Court shall be
obtained as to the sufficiency of service or as to the further steps to be
taken for service as the Court may direct:
Provided that where a notice, summons or other document has to be served on any
class of persons such as shareholders, debenture-holders, creditors and the
like, the same may be sent by pre-paid registered post, or by ordinary post
under certificate of posting, as may be provided by these Rules or by an order
of Court, and unless otherwise ordered by the Court, the service shall be
deemed to be effected at the time when the said notice, summons or other
document ought to be delivered in the ordinary course of post by the post
office, and notwithstanding the same is returned undelivered by the post
office.
(2) Where notice of any petition, application, summons or
other proceeding has to be given to the Central Government under these rules,
it shall be addressed to and served on the Secretary to Government of India,
Department of Company Law Administration,
(3) Where any person has to be served at an
address outside
Validity
of service and of proceedings.
33. No service under these Rules shall be deemed
invalid by reason of any defect in the name or description of a person in the
list of contributories or in the petition, summons, notice or other
proceedings, provided that the Court is satisfied that such service is in other
respects sufficient; and no proceedings under the Act or these Rules shall be
invalidated by reason of any formal defect or irregularity, unless the Judge
before whom the objection is taken is of the opinion that substantial injustice
has been caused by such defect or irregularity and that the injustice cannot be
remedied by an order of Court.
Notice to
be given by persons intending to appear at the hearing of petition.
34. Every person, who intends to appear at the
hearing of a petition, whether to support or oppose the petition, shall serve
on the petitioner or his advocate, notice of his intention at the address given
in the advertisement. The notice shall contain the address of such person, and
be signed by him or his advocate, and save as otherwise provided by these Rules
shall be served (or if sent by post, shall be posted in such time as to reach
the addressee) not later than two days previous to the day of hearing, and in
the case of a petition for winding-up, not later than five days previous to the
day of hearing. Such notice shall be in Form No. 9, with such variations as the
circumstances may require, and where such person intends to oppose the
petition, the grounds of his opposition, or a copy of his affidavit, if any,
shall be furnished along with the notice. Any person who has failed to comply
with this rule shall not, except with the leave of the Judge, be allowed to
appear at the hearing of the petition.
List of
persons intending to appear, to be filed.
35. The petitioner or his advocate shall prepare
a list of the names and addresses of the persons who have given notice of their
intention to appear at the hearing of the petition. Such list shall be in Form
No. 10, and shall be filed in Court before the hearing of the petition.
Procedure
at hearing of petition.
36. At the hearing of the petition, the Judge may
either dispose of the petition finally or give such directions as may be deemed
necessary for the filing of counter-affidavits and reply affidavits, if any,
and for service of notice on any person who, in his opinion, has been omitted
to be served or has not been properly served with the notice of the petition
and may adjourn the petition to enable the parties to comply with his
directions. Except as otherwise ordered by the Judge, it shall not be necessary
to give notice of the adjourned hearing to any person.
37.(1)Every order,
whether made in Court or in Chambers, shall be drawn up by the Registrar,
unless in any proceeding or class of proceedings the Judge or the Registrar
shall direct that the order need not be drawn up. Where a direction is given
that no order need be drawn up, the note or memorandum of the order signed or
initialled by the Judge making the order or by the Registrar shall be
sufficient evidence of the order having been made. The date of every order
shall be the date on which it was actually made, notwithstanding that it is
drawn up and issued on a later date.
(2)Where costs are awarded to a party in any proceeding and such costs
have to be taxed, the order shall direct that the party liable to pay the costs
shall pay the same when taxed, and where the costs have been fixed by the Court
or ascertained by taxation prior to the drawing up of the order, the order
shall direct the payment of the amount of such costs by the party liable to pay
the same.
Proceedings
in matters other than
winding-up
Confirmation
of Alteration of Memorandum of a Company
[Sections 17
to 19]
Form of
petition under section 17 and summons for directions.
38.A petition under section 17 to confirm an
alteration of the memorandum of a company shall set out succinctly particulars
of its registration, its share capital where it has a share capital, the
original objects and the alterations proposed to be effected, the passing of
the special resolution and the reasons for the alteration, the debentures, if
any, issued by the company and its present financial position. The petition
shall be in Form No. 11. It shall be accompanied by a summons for directions
and shall be supported by an affidavit in Form No. 12.
Directions
at hearing of summons.
39. Upon the hearing of the summons for directions,
the Court shall give such directions as it may think fit for the advertisement
of the petition, and the service of notices on the debenture-holders and
creditors of the company, if any, and such other persons whose interests will,
in the opinion of the Court, be affected by the alteration. The order on the
summons shall be in Form No. 13. The notice shall be in Form No. 14. Where the
Court thinks fit to dispense with the notice required by section 17(3)(a) in
the case of any person or class of persons, it shall record its reasons for
doing so.
Notice to
Registrar of Companies and Central Government.
40.
Notice of the petition and the date of the hearing thereof shall in every case
be given to the Registrar of Companies, and where the petitioner is a limited
company, registered without the word “limited” under section 25, such notice
shall also be given to the Central Government.
Procedure
where creditors are entitled to object.
41. Where the Court is of the opinion that the
creditors or any class of them are entitled to object to the proposed
alteration, the Court may give such directions as it may think fit with respect
to the settlement of the list of creditors, service and publication of notices,
hearing of objections and the adjudication of claims, etc., and the provisions
of rules 49 to 61 of these Rules applicable in respect of a petition for
confirming the reduction of share capital, shall, if the Court so directs, and
to the extent specified in such direction, apply with such variations as may be
necessary.
42. An order confirming an alteration in the
memorandum of association shall be in Form No. 15 with such variations as may
be necessary.
Confirmation of alteration
in the constitution of a company
43.
A petition under section 579 to confirm an alteration in the constitution of a
company by substituting a memorandum and articles for a deed of settlement
shall be in Form No. 16, and rules 38 to 42 relating to a petition under
section 17 shall apply mutatis mutandis to a petition under section 579.
[Section 79]
Petition
for sanctioning the issue of shares at a discount.
44. A petition under section 79 to sanction the
issue of shares at a discount, shall be in Form No. 17, and where the rate of
discount proposed is higher than ten per cent, it shall be accompanied by the
order of the Central Government sanctioning the higher rate, in addition to the
documents set out in Appendix II.
Order
sanctioning issue to be delivered to Registrar of Companies.
45. Unless
in any particular case the Court shall otherwise direct, every order
sanctioning the issue of shares at a discount shall contain a direction that a
certified copy of such order be delivered to the Registrar of Companies for
registration within one month from the date of the order, and that the order
shall not take effect until such certified copy has been so delivered.
[Sections
100 to 105]
Form of
petition for reduction of share capital and summons for directions.
46.
A petition to confirm a reduction of the share capital of a company shall be in
Form No. 18, and shall be accompanied by a summons for directions in Form No.
19.
Procedure
on hearing of summons.
47. Upon the hearing of the summons, if the Judge
is satisfied that the proposed reduction does not involve either diminution of
liability in respect of unpaid share capital or payment to any shareholder of
any paid-up share capital, and does not think fit to direct that the procedure
prescribed in section 101(2) shall apply, he shall fix a date for the hearing
of the petition and give such directions as he may think fit as to the
advertisement of the petition. The petition shall be posted for hearing on the date
fixed, and upon the hearing thereof, the judge may confirm the reduction on
such terms and conditions as he may think fit.
Directions
at the hearing of summons.
48. Where the proposed reduction involves either
diminution of liability in respect of unpaid share capital or the payment to
any shareholder of any paid-up share capital, and, in any other case, if the
Judge thinks fit to direct that the procedure prescribed in section 101(2)
shall apply, the Judge may, upon the hearing of the summons or upon any
adjourned hearing thereof, or upon the hearing of any subsequent application,
give such directions as he may think fit as to the proceedings to be taken, and
more particularly with respect to the following matters, that is to say–
(a) the proceedings to be taken for settling
the list of creditors entitled to object, including the dispensing with the
observance of the provisions of section 101(2) as regards any class or classes
of creditors;
(b) fixing the date with reference to which
the list of such creditors is to be made out;
(c) the
publication of notices; and
(d) generally fixing the time for and giving
directions as to all other necessary or proper steps in the matter.
The order made upon the summons under this
rule shall be in Form No. 20, with such variations as the circumstances may
require.
49.
The company shall, within the time allowed by the Judge, file a list in Form
No. 21 made out by an officer of the company competent to make the same,
containing the names and addresses of the creditors of the company to whom the
enquiry extends, as on the date fixed by the Judge under the last preceding
rule, and the respective amounts due to them in respect of debts, claims or
liabilities to which the enquiry extends, or, in case of any such debt payable
on a contingency or not ascertained, or any such claim admissible to proof in a
winding-up of the company, the value, so far as can be justly estimated, of
such debt or claim.
Affidavit
verifying list of creditors.
50. Such list shall be verified by an affidavit
made by an officer of the company competent to make the same, who, in such
affidavit, shall state his belief that the list verified by such affidavit is
correct, that the estimated values, as given in the list, of the debts payable
on a contingency or not ascertained, or of any claims admissible to proof in a
winding-up, are just and proper estimates of the values of such debts and
claims respectively, and that there was not, at the date fixed by the Judge
under rule 48, any debt, claim or liability which, if that date were the
commencement of the winding-up of the company, would be admissible in proof
against the company, except the debts, claims and liabilities set forth in such
list and any debts, claims or liabilities to which the enquiry does not extend,
and shall state the source of his knowledge or information and the grounds of
his belief regarding the matters deposed to in such affidavit. Such affidavit
shall be in Form No. 22, with such variations as the circumstances of the case
may require.
Inspection
of list of creditors.
51.
Copies of such list shall be kept at the registered office of the company and
at the office of the advocate for the company, and any person desirous of
inspecting the same may, at any time during the ordinary hours of business,
inspect and take extracts from the same on payment of the sum of one rupee.
52.
The company shall, within seven days after the filing of the list of creditors
referred to in rule 49 or such further or other time as the Judge may allow,
send to each creditor whose name is entered in the said list, a notice of the
presentation of the petition and of the said list, stating the amount of the
proposed reduction of capital and the amount or estimated value of the debt or
the contingent debt or claim or both for which such creditor is entered in the
said list, and the time, as fixed by the Judge, within which if he claims to be
entitled to be entered on such list as a creditor for a larger amount, he must
send in his name and address, and the particulars of his debt or claim, and the
name and address of his advocate if any, to the advocate of the company. Such
notice shall be in Form No. 23; and shall, unless the Judge otherwise directs,
be sent by pre-paid registered post for acknowledgement addressed to each
creditor at his last known address or place of abode :
Provided that where his address is not known to the company, the Judge may
direct notice to be given to such creditor in such manner as he may think fit.
Advertisement
of petition and list of creditors.
53.
Notice of the presentation of the petition and of the list of creditors under
rule 49, shall, within seven days after the filing of the said list or such
further or other time as the judge may allow, be advertised by the company in
such manner as the Judge shall direct. Such notice shall state the amount of
the proposed reduction of capital, and the places where the aforesaid list of
creditors may be inspected, and the time as fixed by the Judge within which
creditors of the company who are not entered but claim to be entitled to be
entered on the said list, must send in their names and addresses and the
particulars of their debts or claims and the names and addresses of their
advocates, if any, to the advocate of the company. Such notice shall be in Form
No. 24.
54. The
company shall, as soon as may be, file an affidavit proving the despatch and
publication of the notices referred to in rules 52 and 53. Such affidavit shall
be in Form No. 25.
Affidavit
by company as to the result of rules 52 and 53.
55.
The company shall, within the time fixed by the Judge, file a statement signed
and verified by the advocate of the company stating the result of the notices mentioned
in rules 52 and 53 respectively and verifying a list containing the names and
addresses of the persons, if any, who shall have sent in the particulars of
their debts or claims in pursuance of such notices respectively, and the
amounts of such debts or claims. Such statement shall be accompanied by an
affidavit made by a competent officer or officers of the company who shall, in
such list, distinguish which (if any) of such debts and claims are wholly, or
as to any and what part thereof, admitted by the company, and which (if any) of
such debts and claims are wholly, or as to any and what part thereof, disputed
by the company, and which (if any) of such debts and claims are alleged by the
company to be wholly, or as to any and what part thereof, not included in the
enquiry. Such affidavit shall also state which of the persons who are entered
in the list as creditors and which of the persons, who have sent in particulars
of their debts or claims in pursuance of such notices as aforesaid, have been paid
or have consented to the proposed reduction. Such statement and affidavit shall
be in Form No. 26.
Procedure
where claim is not admitted, and proof of debt.
56.
If the company contends that a person is not entitled to be entered in the list
of creditors in respect of any debt or claim, whether admitted or not, or if
any debt or claim, the particulars of which are so sent in, shall not be
admitted by the company at its full amount, then, and in every such case,
unless the company is willing to set apart and appropriate in such manner as
the Judge shall direct, the full amount of such debt or claim, the company
shall, if the Judge thinks fit so to direct, send to the creditor a notice in
Form No. 27, that he is required to come in and establish his title to be
entered on the list, or as the case may be, to come in and prove such debt or
claim or such part thereof as is not admitted by the company on the day fixed
by the Judge. Such notice shall be served not less than four clear days before
the date fixed by the Judge.
An affidavit by a creditor in proof of his
debt shall be in Form No. 28. Where the creditor is for good reason personally
unable to make the affidavit, his authorised agent may make the same.
57. The
costs of proof of a debt or claim or any enquiry under the preceding rule shall
be in the discretion of the Judge.
Certificate
by the Judge as to creditors.
58. The
result of the settlement of the list of creditors shall be stated in a
certificate which shall be prepared by the advocate of the company and signed
by the Judge. Such certificate shall—
(1) specify the debts
or claims (if any) which have been disallowed;
(2) distinguish
(a) the debts or claims, the full amount of which the company is willing to set
apart and appropriate; (b) the debts or claims (if any) the amount of which has
been fixed by enquiry and adjudication in the manner provided by section 101(2)
and these rules; and (c) the debts or claims (if any) the full amount of which
the company does not admit or is not willing to set apart and appropriate or
the amount of which has not been fixed by enquiry and adjudication as
aforesaid; and
(3) Show (a)
which of the creditors have consented to the proposed reduction, and the total
amount of the debts due to them; and (b) the total amount of the debts or claim
the payment of which has been secured in the manner provided by section 101(2)
and the persons to or by whom the same are due or claimed.
The said certificate shall also state what
creditors have under rule 56 come in and sought to establish their title to be
entered on the list and whether such claims have been allowed or not, but it
shall not be necessary to make in such certificate any further or other
reference to any creditors who are not entitled to be entered in the list or to
any debts or claims to which the enquiry does not extend or to show therein the
several amounts of the debts or claims of any persons who have consented to the
proposed reduction or the payment of whose debts or claims has been secured as aforesaid.
59. After
the expiry of not less than fourteen days from the filing of the certificate
mentioned in the preceding rule, the petition shall be set down for hearing.
Notice of the date fixed for the hearing of the petition shall be advertised
within such time and in such newspaper or newspapers as the Judge may direct
and shall be in Form No. 29.
60.
Any creditor included in the certificate whose debt or claim has not, before
the hearing of the petition, been discharged or determined or been secured in
the manner provided by section 101(2)(c) and who has not before the hearing
consented in writing to the proposed reduction of capital may, if he thinks fit
upon giving two clear days’ notice to the advocate for the company of his
intention to do so, appear at the hearing of the petition and oppose it. The
costs of his appearance shall be in the discretion of the Judge.
61.
At the hearing of the petition the Judge may, if he thinks fit, give such
directions as may seem proper with reference to securing in the manner
mentioned in section 101(2)(c) the debts or claims of any creditors who do not
consent to the proposed reduction, and the further hearing of the petition may
be adjourned to enable the company to comply with such directions.
62.Where the Judge makes an order confirming a
reduction, such order shall include directions—
(a) as to the
manner in which, the times at which and the newspaper or newspapers in which,
notice of the registration of the order and of the minute as approved by the
Judge under rule 63 shall be published;
(b) as to the
period commencing on or after the date of the order, during which the words “and
reduced” shall be added to the name of the company as the last words thereof,
in case the Court thinks fit to direct under section 102(2)(a) that the words
shall be so added; and
(c) as to the
publication, if the Judge so directs, of the reasons for reduction or the
causes that led to it or such other information in relation thereto as the
Judge may require to be published under section 102(2)(b).
63.
Unless the form of the minute has been approved by the Judge at the time of
making the order confirming the reduction, the Company shall, within 7 days
from the date of the said order, file for the approval of the Judge a draft of
the minute containing the particulars required by section 103(1)(b), and shall
take an appointment for approval of the same. The advocate for the company
shall attend when the minute comes up before the Judge for approval.
The order confirming the reduction of capital
and approving the minute shall be in Form No. 30, with such variations as may
be necessary.
Advertisement
of reasons for reduction of capital.
64. Where
the Judge makes an order under section 102(2)(b) directing the company to
publish the reasons for the reduction or such other information in regard
thereto as the Court may direct, unless the form of the statement to be
published has been approved by the Judge at the time of making the order, the
company shall, within seven days of the order, file, for the approval of the
Judge, a draft of the statement and shall take an appointment for approval of
the same. The advocate for the Company shall attend when the statement comes up
for approval before the Judge. The statement as approved shall be published in
the same newspapers in which notice of the registration of the order and the
minute had been directed to be published.
Form of
minute and notice of registration.
65.The minute may be in Form No. 31, and the
notice of registration of the order and the minute shall be in Form No. 32.
[Section
107]
Petition
to cancel variation of rights.
66.(1) Where a petition to cancel a variation of
the rights attaching to any class of shares is made on behalf of the
shareholders of that class entitled to apply for cancellation under section 107
by one or more of them, the letter of authority signed by the shareholders so
entitled, authorising the petitioner or petitioner to present the petition on
their behalf, shall be annexed to the petition, and the names and addresses of
all the said shareholders and the number of shares held by each of them shall
be set out in the schedule to the petition.
(2) The
petition shall set out the particulars of registration and the share capital,
the different classes of shares into which the share capital of the company is
divided and the rights attached to each class of shares, the provisions of the
memorandum or articles authorising the variation of the rights attached to the
various classes of shares, the total number of shares of the class whose rights
have been varied, the nature of the variation made, and, so far as may have
been ascertained by the petitioner, the number of shareholders of the class who
gave their consent to the variation or voted in favour of the resolution for
variation and the number of shares held by them, the number of shareholders who
did not consent to the variation or who voted against the resolution, and the
number of shares held by them, and the date or dates on which the consent was
given or the resolution was passed, and the reasons for opposing the variation.
Summons
for directions to convene a meeting.
67. An application under section 391(1) for an
order convening a meeting of creditors and/ or members or any class of them shall
be by a Judge’s summons supported by an affidavit. A copy of the proposed
compromise or arrangement shall be annexed to the affidavit as an exhibit
thereto. Save as provided in rule 68 hereunder, the summons shall be moved ex
parte. The summons shall be in Form No. 33, and the affidavit in support
thereof in Form No. 34.
68. Where the company is not the applicant, a
copy of the summons and of the affidavit shall be served on the company, or,
where the company is being wound-up, on its liquidator, not less than 14 days
before the date fixed for the hearing of the summons.
Directions
at hearing of summons.
69. Upon the hearing of the summons or any
adjourned hearing thereof, the Judge shall, unless he thinks fit for any reason
to dismiss the summons, give such directions as he may think necessary in
respect of the following matters: —
(1) determining
the class or classes of creditors and/or of members whose meeting or meetings
have to be held for considering the proposed compromise or arrangement;
(2) fixing the time and
place of such meeting or meetings;
(3) appointing
a chairman or chairmen for the meeting or meetings to be held, as the case may
be;
(4) fixing the
quorum and the procedure to be followed at the meeting or meetings, including
voting by proxy;
(5) determining
the values of the creditors and/or the members, or the creditors or members of
any class, as the case may be, whose meetings have to be held;
(6) notice to
be given of the meeting or meetings and the advertisement of such notice;
(7) the time
within which the Chairman of the meeting is to report to the Court the result
of the meeting; and such other matters as the Court may deem necessary.
The order made on the summons shall be in Form
No. 35 with such variations as may be necessary.
70.(1) Voting
by proxy shall be permitted, provided a proxy in the prescribed form duly
signed by the person entitled to attend and vote at the meeting is filed with
the company at its registered office not later than 48 hours before the
meeting.
(2) Where a
body corporate which is a member or creditor (including holder of debentures)
of a company authorises any person to act as its representative at the meeting
of the members or creditors of the company, or of any class of them, as the
case may be, a copy of the resolution of the Board of Directors or other
governing body of such body corporate authorising such person to act as its
representative at the meeting, and certified to be a true copy by a director,
the manager or the secretary, or other authorised officer of such body
corporate, shall be lodged with the company at its registered office not later
than 48 hours before the meeting.
(3) Rules
227 to 229 of these Rules relating to proxies shall also apply to proxies lodged
under this rule.
71.
An application under sub-section (6) of section 391 for stay of the
commencement or continuation of any suit or proceeding against the company may
be moved by a Judge’s summons ex parte, provided that where a petition for
winding up the company or a petition under section 397 or 398 is pending,
notice of the application shall be given to the petitioner in such petition.
Application
to vacate or vary order of stay.
72. Where
an order has been made staying the commencement or continuation of any suit or
proceeding under sub-section (6) of section 391, any person aggrieved by such
order may apply to the Court by a Judge’s summons to vacate or vary such order.
Notice of the application shall be given to the applicant at whose instance the
order of stay was made and to such other persons as the Court may direct.
73.
The notice of the meeting to be given to the creditors and/or members, or to
the creditors or members of any class, as the case may be, shall be in Form No.
36, and shall be sent to them individually by the Chairman appointed for the
meeting, or, if the Court so directs, by the company (or its Liquidator), or
any other person as the Court may direct, by post under certificate of posting
to their last known address not less than 21 clear days before the date fixed
for the meeting. It shall be accompanied by a copy of the proposed compromise
or arrangement and of the statement required to be furnished under section 393,
and a form of proxy in Form No. 37.
Advertisement
of the notice of meeting.
74.
The notice of the meeting shall be advertised in such newspapers and in such
manner as the Judge may direct, not less than 21 clear days before the date
fixed for the meeting. The advertisement shall be in Form No. 38.
Copy of
compromise or arrangement to be furnished by the company.
75.
Every creditor or member entitled to attend the meeting shall be furnished by
the company, free of charge and within 24 hours of a requisition being made for
the same, with a copy of the proposed compromise or arrangement together with a
copy of the statement required to be furnished under section 393, unless the
same had been already furnished to such member or creditor.
76.
The Chairman appointed for the meeting or the Company or other person directed
to issue the advertisement and the notices of the meeting shall file an
affidavit not less than 7 days before the date fixed for the holding of the
meeting or the holding of the first of the meetings, as the case may be,
showing that the directions regarding the issue of notices and the
advertisement have been duly complied with. In default thereof, the summons
shall be posted before the Judge for such orders as he may think fit to make.
Result of
the meeting to be decided by poll.
77.
The decisions of the meeting or meetings held in pursuance of the order made
under rule 69 on all resolutions shall be ascertained only by taking a poll.
Report of
the result of the meeting.
78. The
Chairman of the meeting, (or where there are separate meetings, the Chairman of
each meeting) shall, within the time fixed by the Judge, or where no time has
been fixed, within seven days after the conclusion of the meeting, report the
result thereof to the Court. The report shall state accurately the number of
creditors or class of creditors or the number of members or class of members,
as the case may be, who were present and who voted at the meeting either in
person or by proxy, their individual values and the way they voted. The report
shall be in Form No. 39.
Petition
for confirming compromise or arrangement.
79. Where
the proposed compromise or arrangement is agreed to, with or without
modification, as provided by sub-section (2) of section 391, the company, (or
its Liquidator, as the case may be), shall, within 7 days of the filing of the
report by the Chairman, present a petition to the Court for confirmation of the
compromise or arrangement. The petition shall be in Form No. 40.
Where a compromise or arrangement is proposed
for the purposes of or in connection with a scheme for the reconstruction of
any company or companies, or for the amalgamation of any two or more companies,
the petition shall pray for appropriate orders and directions under section
394.
Where the company fails to present the
petition for confirmation of the compromise or arrangement as aforesaid, it
shall be open to any creditor or contributory as the case may be, with the
leave of the Court, to present the petition and the Company shall be liable for
the costs thereof.
Where no petition for confirmation of the
compromise or arrangement is presented, or where the compromise or arrangement
has not been approved by the requisite majority under section 391(2) and
consequently no petition for confirmation could be presented, the report of the
Chairman as to the result of the meeting made under the preceding rule shall be
placed for consideration before the Judge for such orders as may be necessary.
80. The
Court shall fix a date for the hearing of the petition, and notice of the
hearing shall be advertised in the same papers in which the notice of the
meeting was advertised, or in such other papers as the Court may direct, not
less than 10 days before the date fixed for the hearing.
81. Where
the Court sanctions the compromise or arrangement, the order shall include such
directions in regard to any matter and such modifications in the compromise or
arrangement as the Judge may think fit to make for the proper working of the
compromise or arrangement. The order shall direct that a certified copy of the
same shall be filed with the Registrar of Companies within 14 days from the
date of the order, or such other time as may be fixed by the Court. The order
shall be in Form No. 41, with such variations as may be necessary.
Application
for directions under section 394.
82. Where
the compromise or arrangement has been proposed for the purposes of or in
connection with a scheme for the reconstruction of any company or companies or
the amalgamation of any two or more companies, and the matters involved cannot
be dealt with or dealt with adequately on the petition for sanction of the
compromise or arrangement, an application shall be made to the Court under
section 394, by a summons supported by affidavit, for directions of the Court
as to the proceedings to be taken. Notice of the summons shall be given in such
manner and to such persons as the Court may direct.
Directions
at hearing of application.
83. Upon
the hearing of the summons or upon any adjourned hearing thereof the Court may
make such order or give such directions as it may think fit, as to the
proceedings to be taken for the purpose of the reconstruction or amalgamation,
as the case may be, including, where necessary, an inquiry as to the creditors
of the transferor company and the securing of the debts and claims of any of
the dissenting creditors in such manner as to the Court may seem just.
84.
An order made under section 394 shall be in Form No. 42 with such variation as
the circumstances may require.
Compromise
or arrangement involving reduction of capital.
85. Where
a proposed compromise or arrangement involves a reduction of capital of the
company, the procedure prescribed by the Act and these Rules relating to the
reduction of capital, and the requirements of the Act and these Rules in
relation thereto, shall be complied with, before the compromise or arrangement
so far as it relates to reduction of capital, is sanctioned.
Report on
working of compromise or arrangement.
86. At any time after the passing of the order sanctioning the compromise
or arrangement, the Court may, either of its own motion or on the application
of any person interested, make an order directing the company, or, where the
company is being wound up, the liquidator, to submit to the Court within such
time as the Court may fix, a report on the working of the said compromise or
arrangement. On a consideration of the report, the Court may pass such orders
or give such directions as it may think fit.
87.(1) The
Company or any creditor or member thereof, or, in case of a company which is
being wound-up, the liquidator, may, at any time after the passing of the order
sanctioning the compromise or arrangement, apply to the Court for the
determination of any question relating to the working of the compromise or
arrangement.
(2) The
application shall in the first instance be posted before the Court for
directions as to the notices and the advertisement, if any, to issue, as the
Court may direct.
(3) The
Court may, on such application, pass such orders and give such directions as it
may think fit in regard to the matter, and may make such modifications in the
compromise or arrangement as it may consider necessary for the proper working
thereof, or pass such order as it may think fit in the circumstances of the
case.
[Sections
397 to 407]
Petition
under section 397 or 398.
88. (1) Where a petition is presented under
section 397 or 398 on behalf of any member of a company entitled to apply under
section 399(1), by any one or more of them, the letter of consent signed by the
rest of the members so entitled authorising the petitioner or petitioners to
present the petition on their behalf, shall be annexed to the petition, and the
names and addresses of all the members on whose behalf the petition is
presented shall be set out in a schedule to the petition, and where the company
has a share capital, the petition shall state whether the petitioners have paid
all calls and other sums due on their respective shares. Where the petition is
presented by any member or members authorised by the Central Government under
section 399(4), the order of the Central Government authorising such member or
membsers to present the petition shall be similarly annexed to the petition. A
petition under section 397 shall be in Form No. 43, and a petition under
section 398 shall be in Form No. 44.
(2) A petition
under section 397 or 398 shall not be withdrawn without leave of the Court, and
where the petition has been presented by a member or members authorised by the
Central Government under sub-section (4) of section 399, notice of the
application for leave to withdraw shall be given to the Central Government.
89.
Save where a petition is presented by or on behalf of the Central Government
under section 401, notice shall be given to the Central Government of every
petition under section 397 or 398, and a copy of the petition shall be served
on the Central Government along with the notice of the date of hearing, not
less than 14 clear days before the date fixed for the hearing of the petition.
Order
involving reduction of capital or alteration of memorandum.
90.
Where an order under section 397 or 398 involves a reduction of capital or
alteration of the memorandum of association, the provisions of the Act and
these Rules relating to such matters shall apply as the Court may direct.
Application
under section 407(1)(b) for leave to act as managing director, etc.
91. An
application under clause (b) of sub-section (1) of section 407 for leave to any
of the persons mentioned therein, to be appointed, or to act, as the managing
or other director, or manager of the company, shall state whether notice of the
intention to apply for such leave has been given to the Central Government and
shall be accompanied by a copy of such notice. Notice of the date of hearing of
the petition together with a copy of the petition shall be served on the
Central Government not less than 14 clear days before the date fixed for the
hearing.
RESTORATION
OF THE NAME OF A COMPANY TO THE REGISTER OF COMPANIES
[Section
560(6)]
Notice to
Registrar of Companies.
92.
A petition under section 560(6) to restore the name of a company to the
Register of Companies shall be served on the Registrar of Companies and on such
other persons as the Court may direct, not less than 14 days before the date
fixed for the hearing of the petition.
Delivery
of order and advertisement thereof.
93.
Where the Court makes an order restoring the name of a company to the Register
of Companies, the order shall direct that the petitioner do deliver to the
Registrar of Companies a certified copy thereof within 14 days from the date of
the order, and that on such delivery, the Registrar of Companies do, in his
official name, advertise the order in the Gazette of the State or Union
Territory concerned.
Registrar’s
costs of petition.
94.
Unless for any special reasons the Court shall otherwise order, the order shall
direct that the petitioners do pay to the Registrar of Companies his costs of,
and occasioned by, the petition.
Winding Up
Winding up by Court
Winding-up petition and its hearing
95. A
petition for winding-up a company shall be in Form No. 45, 46 or 47, as the
case may be, with such variations as the circumstances may require, and shall
be presented in duplicate. The Registrar shall note on the petition the date of
its presentation.
Admission
of petition and directions as to advertisement.
96. Upon
the filing of the petition, it shall be posted before the Judge in Chambers for
admission of the petition and fixing a date for the hearing thereof and for
directions as to the advertisements to be published and the persons, if any,
upon whom copies of the petition are to be served. The Judge may, if he thinks
fit, direct notice to be given to the company before giving directions as to
the advertisement of the petition.
Petition
by a contingent or prospective creditor.
97. A
petition for winding-up of a company presented by a contingent or prospective
creditor shall be accompanied by an application under section 439(8) for the
leave of the Court for the admission of the petition. No advertisement of the
petition shall be made unless the leave has been granted, or, where the leave
has been granted subject to any conditions precedent to the admission of the
petition, unless such conditions have been satisfied.
Copy of
petition to be furnished.
98. Every contributory or creditor of the company
shall be entitled to be furnished by the petitioner or by his advocate with a
copy of the petition within 24 hours of his requiring the same on payment of
the prescribed charges.
99. Subject to any directions of the Court, the
petition shall be advertised within the time and in the manner provided by rule
24 of these Rules. The advertisement shall be in Form No. 48.
Application
for leave to withdraw petition.
100.(1) A petition for winding-up shall not be
withdrawn after presentation without the leave of the Court.
(2) An
application for leave to withdraw a petition for winding-up which has been
advertised in accordance with the provisions of rule 99 shall not be heard at
any time before the date fixed in the advertisement for the hearing of the
petition.
Substitution
of creditor or contributory for original petitioner.
101. Where a petitioner,—
(1) is not entitled to present a petition, or
(2) fails to advertise his petition
within the time prescribed by these Rules or by order of Court or such extended
time as the Court may allow, or
(3) consents to withdraw the petition,
or to allow it to be dismissed, or the hearing to be adjourned, or fails to
appear in support of his petition when it is called on in Court on the day
originally fixed for the hearing thereof, or any day to which the hearing has
been adjourned, or
(4) if appearing, does not apply for an order in terms of the prayer
of his petition,
or
where in the opinion of the Court there is
other sufficient cause for an order being made under this rule,
the Court may, upon such terms as it may think just, substitute as petitioner any creditor or contributory who, in the opinion of the Court, would have a right to present a petition, and who is desirous of prosecuting the petition.
102.Where the Judge makes an order substituting a
creditor or contributory as petitioner in a winding-up petition, he shall
adjourned the hearing of the petition to a date to be fixed by him and direct
such amendments of the petition as may be necessary. Such creditor or
contributory shall, within 7 days from the making of the order, amend the petition
accordingly, and file two clean copies thereof together with an affidavit in
duplicate setting out the grounds, on which he supports the petition. The
amended petition shall be treated as the petition for the winding-up of the
company and shall be deemed to have been presented on the date on which the
original petition was presented.
103. Any affidavit intended to be used in
opposition to the petition shall be filed not less than 5 days before the date
fixed for the hearing of the petition, and a copy of the affidavit shall be
served on the petitioner or his advocate forthwith.
Copies of
the affidavit shall also be given to any creditor or contributory appearing in
support of the petition who may require the same on payment of the prescribed
charges.
104.An affidavit intended to be used in reply to
the affidavit filed in opposition to the petition, shall be filed not less than
2 days before the day fixed for the hearing of the petition, and a copy of the affidavit
in reply shall be served on the day of the filing thereof on the person by whom
the affidavit in opposition was filed or his advocate.
Stay of
suit or proceeding pending petition.
105.An application under section 442 for stay of
any suit or proceeding shall be made upon notice to all the parties to the suit
or proceeding sought to be stayed.
Appointment
of Provisional Liquidator.
106.(1)After the admission of a petition for the
winding-up of a company by the Court, upon the application of a creditor, or a
contributory, or of the company, and upon proof by affidavit of sufficient
ground for the appointment of a Provisional Liquidator, the Court, if it thinks
fit and upon such terms as in the opinion of the Court shall be just and
necessary, may appoint the Official Liquidator to be Provisional Liquidator of
the company pending final orders on the winding-up petition. Where the company
is not the applicant, notice of the application for appointment of Provisional
Liquidator shall be given to the company unless the Court, for special reasons
to be recorded in writing, dispenses with the notice.
(2) The order appointing the Provisional
Liquidator shall set out the restrictions and limitations, if any, on his
powers imposed by the Court. The order shall be in Form No. 49, with such
variations as may be necessary.
Rules
applicable to Provisional Liquidator.
107.The Rules relating to Official Liquidators
shall apply to Provisional Liquidators, so far as applicable, subject to such
directions as the Court may give in each case.
Costs,
etc., of Provisional Liquidator.
108.Subject to any order of the Court, all the
costs, charges and expenses properly incurred by the Official Liquidator as
Provisional Liquidator, including such sum as is or would be payable to the
Central Government under the scale of fees for the time being in force
applicable where the Official Liquidator acts as Liquidator of the company,
shall be paid out of the assets of the company;
Notice to
Official Liquidator of order.
109.Where an order for the winding-up of a company
or for the appointment of a Provisional Liquidator has been made, the Registrar
shall forthwith send to the Official Liquidator of the Court notice of the
order under the seal of the Court in duplicate in Form No. 50 or 51 as the case
may be, together with a copy of the petition and the affidavit if any filed in
support thereof.
Contents
of winding-up order and order appointing Provisional Liquidator.
110.An order to wind-up a company or for the
appointment of a Provisional Liquidator shall contain at the foot thereof a
note stating that it will be the duty of such of the persons as are liable to
make out or concur in making out the company’s statement of affairs under
section 454, to attend on the Official Liquidator at such time and place as he
may appoint and to give him all information he may require.
Order to
be sent to Official Liquidator and form of order.
111.(1)The order for winding-up shall be drawn up
by the Registrar as soon as possible, and, after it is signed and sealed, two
certified copies thereof duly sealed shall be sent to the Official Liquidator.
The order shall be in Form No. 52 with such variations as may be necessary.
(2) Except
where the company is the petitioner, the Official Liquidator shall cause a
sealed copy of the order to be served upon the company by pre-paid registered
post addressed at its registered office (if any), or, if there is no registered
office, at its principal or last known principal place of business, or upon
such other person or persons or in such manner as the Court may direct.
Directions
on making the winding-up order.
112.At the time of making the winding-up order, or
at any time thereafter, the Court shall give directions as to the advertisement
of the order and the persons if any on whom the order shall be served and the
persons if any to whom notice shall be given of the further proceedings in the
liquidation, and such further directions as may be necessary.
113.Save as otherwise ordered by the Court, every
order for the winding-up of a company by the Court, shall, within 14 days of
the date of making the order, be advertised by the petitioner in one issue each
of a newspaper in the English language and a newspaper in the regional language
circulating in the State or the Union Territory concerned and shall be served
by the petitioner upon such person, if any, and in such manner, as the Judge
may direct. The advertisement shall be in Form No. 53.
Official
Liquidator to take charge of assets and books and papers of company.
114.On a winding-up order being made, the Official
Liquidator attached to the Court shall forthwith take into his custody or under
his control all the property and effects and the books and papers of the
company, and it shall be the duty of all persons having custody of any of the
properties, books and papers of the company, to deliver possession thereof to
the Official Liquidator.
Form of
proceedings after winding-up order is made.
115.After a winding-up order is made, every
subsequent proceeding in the winding-up shall bear the original number of the
winding-up petition besides its own distinctive number, but against the name of
the company in the cause title, the words ‘in liquidation’ shall appear in
brackets.
Application
for stay of winding-up proceedings.
116.An application under section 466 for stay of
proceedings in the winding-up shall be made upon notice to the parties to the
winding-up petition and to such other persons as the Court may direct, and
where the application is made by any person other than the Official Liquidator,
notice shall be given to the Official Liquidator. Where an order is made
staying proceedings, the order shall direct that the applicant shall forthwith
file a certified copy thereof with the Registrar of Companies.
Applications under section 446.
Application
for leave to commence or continue suit or proceeding.
117.An application under section 446(1) for leave
of the Court to commence or continue any suit or proceeding against the company
shall be made upon notice to the Official Liquidator and the parties to the
suit or proceeding sought to be commenced or continued.
Application
for transfer of suit or proceeding.
118.(1)An application under section 446(3) for the
transfer to the Court of any suit or proceeding by or against the company
pending in any other Court shall be made on notice to the Official Liquidator
where he is not the applicant and to the parties to the suit or proceeding
sought to be transferred.
(2) Where an
order is made for the transfer of a suit or proceeding pending in any other
Court to the Court, the Registrar of the Court shall transmit without delay a
certified copy of the order to the Court in which such suit or proceeding is
pending, and that Court shall, on receipt of the order, transmit the records of
the suit or proceeding to the Court.
(3) Upon the
making of an order for winding-up, all suits and proceedings by or against the
company then pending or thereafter instituted in the Court or transferred to
the Court, shall be assigned to and placed in the list of the Judge for the
time being exercising jurisdiction under the Act.
119.(1) Where a winding-up order has been made by
High Court, an application for a direction that all subsequent proceedings in
the winding-up be had in a District Court subordinate to the High Court or in
any other High Court or in a District Court subordinate thereto, shall be made
to the High Court that made the winding-up order by the Official Liquidator of
that Court, or by the Official Liquidator of the Court to which the proceedings
are sought to be transferred, or by a creditor or contributory of the company.
(2) An
application for the transfer of winding-up proceedings from a District Court to
the High Court or to another District Court shall be made to the High Court by
the Official Liquidator attached to the first mentioned District Court, or by
the Official Liquidator attached to the High Court, or by a creditor or
contributory of the company.
(3) Notice
of every application for transfer of winding-up proceedings shall be given to
the Official Liquidators of both the Court from which and the Court to which, the
proceedings are sought to be transferred, and to the parties to the winding-up
petition, and if so ordered by the Court, by advertisement in such newspapers
as the Court may direct.
(4) An order
transferring winding-up proceedings from the High Court to a District Court or
from one District Court to another shall be in Form No. 54.
Transmission
of records upon transfer of proceedings.
120.(1)Where an order is made transferring the
winding-up proceedings in a High Court to another Court, the Registrar of the
High Court shall, without delay, transmit the records of the proceedings
together with a certified copy of the order of transfer to the Court to which
the proceedings are transferred.
(2) Where
the High Court makes an order withdrawing to its own file the winding-up
proceedings in a District Court, the Registrar of the High Court shall
forthwith forward a certified copy of the order to the said District Court, and
that Court shall, on receipt of the order, despatch without delay the records
of the proceedings to the High Court.
(3) Where
the High Court makes an order transferring the winding-up proceedings in a
District Court to another District Court, the Registrar of the High Court shall
forthwith forward a certified copy of the order to each of the said District
Courts, and the Court whose proceedings are transferred shall, on receipt of
the order, despatch without delay the records of the proceedings to the
District Court to which they are transferred.
Proceedings
to be re-numbered.
121. Where proceedings are transferred, they shall
receive a new distinctive number in theCourt to which they are transferred, but
below the new number in the cause-title, the previous number shall be shown in
brackets as follows:
(Transferred
Petition No......of 19..... of the High
Court/District Court of.....)
Notice to
Official Liquidator.
122.The Registrar of the Court to which the
proceedings are transferred shall, on receipt of the order of transfer, give
notice thereof to the Official Liquidator attached to the Court, and the said
Official Liquidator shall thereupon give notice of the transfer to the
Registrar of Companies.
Official
Liquidator of
123.(1)Upon an order being made by the High Court,
either of its own motion or upon application made to it as aforesaid,
transferring the winding-up proceedings, the Official Liquidator attached to
the Court to which the proceedings are transferred shall become the Liquidator
of the company in the place of the Official Liquidator of the Court which made
the winding-up order, and the winding-up proceedings shall be continued in the
Court to which the proceedings are transferred in the same manner as if the
Court had passed the order for winding-up.
(2) Upon the
order for transfer being made the Official Liquidator of the Court whose
proceedings are transferred shall forthwith hand over and transfer to the
Official Liquidator of the Court to which they are transferred, all the
property and assets and the books and papers of the company in liquidation in
his hands, subject to the retention out of the assets of the costs or expenses
incurred by him prior to the transfer.
124.A notice by the Official Liquidator requiring any
of the persons mentioned in sub- section (2) of section 454 to submit and
verify a statement of affairs of the company shall be in Form No. 55 and shall
be served by the Official Liquidator as soon as may be after the order for
winding-up or the order appointing the Official Liquidator as Provisional
Liquidator is made.
Application
by Official Liquidator under section 454(2).
125.The Official Liquidator may apply by summons
to the Court for an order directing any person who, in his opinion, is liable
to furnish a statement of affairs under section 454, to prepare and submit such
a statement or concur in making the same. Notice of the application shall be
served on the person against whom the order is sought. Where the Court makes
the order, such order shall be in Form No. 56 with such variations as may be
necessary.
Preparation
of statement of affairs.
126.Any person who under section 454 is required
to submit and verify a statement as to the affairs of the company shall be
furnished by the Official Liquidator with the necessary forms and shall be
given such instructions and afforded such reasonable facilities for preparing
the statement as the Official Liquidator may in his discretion consider
necessary.
127.The statement as to the affairs of the company
to be submitted under section 454 shall be in Form No. 57 and shall be made out
in duplicate, one copy of which shall be verified by affidavit. An affidavit of
concurrence in the statement of affairs shall be in Form No. 58. The verified
statement and the affidavit of concurrence, if any, shall be submitted to the
Official Liquidator within the time prescribed by the section, or, within such
extended time not exceeding three months from the ‘relevant date’ as defined in
the section as the Official Liquidator or the Court may, for special reasons,
appoint. The Official Liquidator shall cause the verified statement of affairs
and the affidavit of concurrence if any to be filed in the Court and shall
retain the duplicate thereof for his records.
Extension
of time for submitting statement.
128.(1)Where any person required to submit a
statement of affairs under section 454 requires an extension of time for
submitting the same, he shall apply in the first instance to the Official
Liquidator who may, if he thinks fit, give a written certificate extending the
time, which certificate shall be filed with the proceedings. The certificate
shall be in Form No. 59.
(2) Where
the Official Liquidator refuses to grant an extension of time for submitting the
statement of affairs, the person required to submit the statement may apply to
the Judge in Chambers for extension of time on notice to the Official
Liquidator.
Expenses
of preparing the statement.
129.(1)Any person required to make or concur in
making any statement of affairs of the company, shall submit to the Official
Liquidator for his sanction, a statement of the estimated costs and expenses of
the preparation and making of the statement, and shall, after the submission of
the statement of affairs, submit his bill of actual expenses.
(2) Except
by order of the Court, no person shall be paid out of the assets of the company
any costs or expenses which have not been sanctioned by the Official
Liquidator, nor shall such costs and expenses be paid until the statement of
affairs verified by affidavit has been submitted to the Official Liquidator.
(3) Any
person who has made or concurred in making the said statement and affidavit and
whose bill of costs and expenses has not been allowed in full by the Official
Liquidator, may, within 14 days of the notice of the order of the Official
Liquidator disallowing any part of his bill, apply by summons to the Judge in
Chambers upon notice to the Official Liquidator for sanction of the amount
disallowed or any part thereof and the Judge may pass such orders thereon as
may seem just.
Officers
of company to attend and give information.
130.The Official Liquidator may from time to time
hold personal interviews with any such person as is mentioned in sub-section
(2) of section 454 for the purpose of investigatng the company’s affairs, and
it shall be the duty of every such person to attend on the Official Liquidator
at such time and place as the Official Liquidator may appoint and give the
Official Liquidator all informations that he may require and answer all such
questions as may be put to him by the Official Liquidator. The Official
Liquidator shall maintain minutes of the interviews held by him or memoranda
containing the substance of such interviews.
Duty of
person making or concurring in statement.
131.After the statement of affairs of the company
has been submitted to the Official Liquidator it shall be the duty of every
person who has made or concurred in making it, if and when required, to attend
on the Official Liquidator and answer all such questions as may be put to him,
and give all such further informations as may be required of him by the
Official Liquidator in relation to the statement of affairs.
Default
in complying with section 454.
132.Any default on the part of any person in
complying with the requirements of section 454 shall be reported to the Court
by the Official Liquidator, and the Court may thereupon pass such orders or
give such directions as it may think fit.
Dispensing
with statement of affairs.
133.An application to dispense with the
requirements of section 454 shall be supported by a report of the Official
Liquidator showing the special circumstances which, in his opinion, render such
a course desirable. Where an order is made dispensing with the requirements the
Court may give such consequential or other directions as it may think fit.
Liquidator
in voluntary winding-up or winding-up subject to supervision, to submit
statement.
134.Where before the making of the winding-up
order the company was being wound-up voluntarily or subject to the supervision
of the Court, the Official Liquidator may require any liquidator or liquidators
in such winding-up to furnish him, not later than 14 days of his making the
requisition, or such other time as he may fix, with a statement as to the
manner in which the winding-up was conducted, how the assets of the company
were dealt with, and the position of the liquidation on the date of the order
for winding-up by the Court; and on the requisition being made, it shall be the
duty of the liquidator or liquidators so required to furnish the statement
within the time limited. Where the liquidator or liquidators fail to furnish
the statement as required, the Official Liquidator may apply to the Court for
such directions as may be necessary.
Reports by official liquidator
under section 455 and summons for directions
Preliminary
report by Official Liquidator.
135.The preliminary report to be submitted by the Official
Liquidator under sub-section (1) of section 455 shall be in Form No. 60 with
such veriations as may be necessary.
Inspection
of statement and preliminary report.
136.Every creditor or contributory, by himself or
by his agent, shall be entitled to inspect the statement of affairs submitted
under section 454 or the statement submitted by a liquidator under rule 134 of
these Rules, and the preliminary report of the Official Liquidator submitted
under section 455(1), on payment of a fee of Re. 1 and to obtain copies thereof
or extracts therefrom on payment of the prescribed charges.
Further
Report by Official Liquidator.
137.(1)Where the Official Liquidator makes a
further report under sub-section (2) of section 455, such report shall state
whether in the opinion of the Liquidator, any fraud has been committed by any
person in the promotion or formation of the company or by any officer in
relation to the company since its formation, and shall set out the names of the
persons by whom the fraud, in his opinion, was committed and the facts on which
such opinion is based. The report shall set out in a narrative form the facts
and matters which the Liquidator desires to bring to the notice of the Court.
(2) Where
the Official Liquidator makes a further report under sub-section (2) of section
455, the Registrar shall fix a date for the consideration thereof by the Judge
and notify the date on the notice board of the court and to the Official
Liquidator.
Consideration
of report by Court.
138.The consideration of the report (or reports)
made by the Official Liquidator pursuant to sub-section (2) of section 455,
shall be before the Judge in Chambers, and the Official Liquidator shall
personally or by counsel attend the consideration thereof and give the court
any further information or explanation with reference to the matters contained
therein which the Court may require. On a consideration of the report (or
reports), the Court may pass such orders and give such directions as it may
think fit including directions under section 478.
Summons
for directions to be taken out by Official Liquidator.
139.(1)As soon as practicable after the winding-up
order is made and in any event not later than 7 days after the filing of his
preliminary report under sub-section (1) of section 455, the Official
Liquidator shall take out a summons for directions with regard to the
settlement of the list of contributories and the list of creditors and the
exercise by the Official Liquidator of all or any of the powers under section
457(1) and any other matters requiring directions of the Court. Notice of the
summons shall be given to the petitioner on whose petition the order for
winding-up was made. Upon the hearing of the summons, the Court, after hearing
the Official Liquidator and any other person appearing on notice or otherwise,
may give such directions as it shall think fit in regard to the said matters,
including the fixing of dates for the settlement of the list of contributories
and for the filing of proofs by the creditors of the company in respect of
their debts and their claims for priority if any under section 530.
(2) Where
the preliminary report of the Official Liquidator is not filed prior to the
hearing of the summons and any of the matters in the summons cannot be properly
or fully dealt with without a perusal of such report, the Court may adjourn the
hearing of any such matter or matters on the summons until after the submission
of the preliminary report.
First
meeting of creditors and contributories.
140.The meetings of the creditors and
contributories under section 464 for the purpose of determining whether there
shall be a Committee of Inspection, and if so, what shall be its composition,
shall be convened, held and conducted in the manner hereinafter provided by
these Rules for the holding and conducting of meetings of creditors and
contributories.
Official
Liquidator to report result of meeting and apply for directions.
141.(1) As soon as possible after the holding of
the said meetings, the Official Liquidator shall report the result thereof to
the Court. Such report shall be in Form No. 61.
(2) Where
the meeting of the contributories has accepted in its entirety the decision of
the creditors’ meeting as regards the constitution and composition of a Committee
of Inspection and the persons who are to be members thereof, a Committee shall,
subject to the provisions of section 465(1), be constituted in accordance with
such decision, and the Official Liquidator shall set out in his report the
names of the members of the Committee so constituted.
(3) Where
the meeting of the contributories has not accepted the decision of the
creditors’ meeting in its entirety, the Official Liquidator shall, at the time of
making his report as aforesaid, apply to the Court for directions as to whether
there shall be a Committee of Inspection, and if so, what shall be its
composition, and who shall be the members thereof, and the Court shall
thereupon fix a date for the consideration of the resolutions and
determinations of the meetings of the creditors and contributories. Notice of
the date so fixed shall be advertised by the Official Liquidator in such manner
as the Court shall direct not less than 7 days before the date fixed. The
advertisement shall be in Form No. 62.
(4) On the
date fixed for hearing of the said application for directions, the Court may,
after hearing the Official Liquidator and any creditor or contributory who may
appear, appoint a Committee of Inspection, or dispense with the appointment of
a Committee of Inspection, or pass such orders or give such directions in the
matter, as the Court may think fit.
Application
for order not to fill vacancy in Committee.
142.An application by the Official Liquidator
under the proviso to sub-section (9) of section 465 for an order that a vacancy
occurring in the Committee of Inspection shall no be filled, shall be made upon
notice to the remaining members of the Committee of Inspection and such other
persons as the Court may direct.
Liquidator
and members of the Committee dealing with company’s assets.
143.Neither the Liquidator nor any member of the
Committee of Inspection shall, while acting as liquidator or member of such
committee in any winding-up, either directly or indirectly, by himself or any
employer, partner, clerk, agent, servant or relative, become purchaser of any
part of the company’s assets except by leave of the Court. Any such purchase
made contrary to the provisions of this Rule may be set aside by the Court on
the application of the Liquidator or of a creditor or contributory, as the case
may be, and the court may make such order as to costs as it may think fit.
Committee
of Inspection not to make profit.
144. No member of the Committee of Inspection shall,
except under and with the sanction of the Court, directly or indirectly, by
himself, or any employer, partner, clerk, agent, servant or relative, be
entitled to derive any profit from any transaction arising out of the
winding-up or to receive out of the assets any payment for services rendered by
him in connection with the administration of the assets, or for any goods
supplied by him to the Liquidator for or on account of the company. Where any
profit or payment has been made contrary to the provisions of this Rule such
payment shall be disallowed or the profit shall be recovered, as the case may
be, on the audit of the Liquidator’s accounts or otherwise.
Costs of
obtaining sanction of Court.
145.In any case in which sanction of the Court is obtained
under the last two preceding Rules, the costs of obtaining such sanction shall
be borne by the person in whose interest such sanction is obtained and shall
not be payable out of the company’s assets.
Order
sanctioning payment to Committee.
146.Where the sanction of the Court to a payment
to a member of the Committee of Inspection for services rendered by him in
connection with the administration of the company’s assets is obtained, the
order of the Court shall specify the nature of the services, and such sanction
shall only be given where the service performed is of a special nature. Except
by the express sanction of the Court, no remuneration shall be paid to a member
of the Committee for services rendered by him in the discharge of the duties attaching
to his office as a member of such Committee.
Fixing a
date for proving debts.
147.Subject to the provisions of the Act, and in a
winding-up by the Court, subject to the directions of the Court, the Official
Liquidator in a winding-up by the Court shall, and the Liquidator in any other
winding-up may, fix a certain day, which shall be not less than 14 days from
the date of the notice to be given under the next succeeding Rule, on or before
which the creditors of the company are to prove their debts or claims and to
establish any title they may have to priority under section 530, or to be
excluded from the benefit of any distribution made before such debts or claims
are proved, or, as the case may be, from objecting to such distribution.
148.(1)The Liquidator shall give not less than 14
days’ notice of the date so fixed by advertisement in one issue of a daily
newspaper in the English language and one issue of a daily newspaper in the
regional language circulating in the State or Union Territory concerned, as he
shall consider suitable. Such advertisement shall be in Form No. 63.
(2) The Liquidator shall also give not less than 14 days’ notice of the
date fixed, in a winding-up by the Court, to every person mentioned in the
statement of affairs as a creditor, who has not proved his debt, and to every
person mentioned in the statement of affairs as a preferential creditor, whose
claim to be a preferential creditor has not been established or is not admitted,
or, where there is no statement of affairs, to the creditors as ascertained
from the books of the company, and, in any other winding-up, to each person
who, to the knowledge of the Liquidator, claims to be a creditor or
preferential creditor of the company and whose claim has not been admitted, to
the last known address or place of abode of such person. Such notice shall be
in Form No. 64 or 65, as the case may be, and shall be sent to each creditor by
pre-paid letter post under certificate of posting.
(3) All the Rules hereinafter set out as to the admission or rejection
of proofs shall apply with the necessary variations to any claim to priority as
a preferential creditor.
149.(1)In a winding-up by
the Court every creditor shall, subject as hereinafter provi- ded, prove his
debt, unless the Judge in any particular case directs that any creditors or
class of creditors shall be admitted without proof.
(2) Formal proof of the debts mentioned in paragraph (d) of sub-section
(1) of section 530 shall not be required, unless the Official Liquidator shall
in any special case otherwise direct, in a winding-up by the Court.
Mode of proof and verification thereof.
150.A debt may be proved
by delivering or sending by post to the Liquidator, an affidavit verifying the
debt made by the creditor or by some person authorised by him. If the affidavit
is made by a person authorised by the creditor, it shall state the authority
and means of knowledge of the deponent. A creditor need not attend upon the
investigation unless required to do so by the Liquidator.
151.An affidavit proving
a debt shall contain or refer to a statement of account showing the particulars
of the debt, and shall specify the vouchers, if any, by which the same can be
substantiated. The affidavit shall state whether the creditor is a secured
creditor, or a preferential creditor, and if so, shall set out the particulars
of the security or of the preferential claim. The affidavit shall be in Form
No. 66.
152.In any case where
there are numerous claims for wages or accrued holiday remuneration by workmen
and others employed by the company, it shall be sufficient if one proof in Form
No. 67 for all such claims is made either by a foreman or some other person on
behalf of all such creditors. Such proof shall have annexed thereto as forming
part thereof, a schedule setting forth the names of the workmen and others and
the amounts severally due to them. Any proof made in compliance with this rule
shall have the same effect as if separate proofs had been made by each of the
said workmen and others.
Production of bills of exchange and promissory notes.
153.Where a creditor
seeks to prove in respect of a bill of exchange, promissory note or other
negotiable instrument or security of a like nature on which the company is
liable, such bill of exchange, note, instrument or security shall be produced
before the Liquidator and be marked by him before the proof is admitted.
154.The value of all debts and claims against the
company shall, as far as is possible, be estimated according to the value
thereof at the date of the order of the winding-up of the company or where
before the presentation of the petition for winding-up, a resolution has been
passed by the company for voluntary winding-up, at the date of the passing of
such resolution.
155. A creditor proving his debt shall deduct
therefrom all trade discounts, if any.
156.On any debt or
certain sum payable at a certain time or otherwise, whereon interest is not
reserved or agreed for, and which is overdue at the date of the winding-up
order, or the resolution, as the case may be, the creditor may prove for
interest at a rate not exceeding four per cent per annum up to that date from
the time when the debt or sum was payable, if the debt or sum is payable by
virtue of a written instrument at a certain time, and if payable otherwise,
then from the time when a demand in writing has been made, giving notice that
interest will be claimed from the date of demand until the time of payment.
157.When any rent or
other payment falls due at stated periods, and the order or resolution to
wind-up is made at any time other than one of those periods, the persons
entitled to the rent or payment may prove for a proportionate part thereof up
to the date of winding-up order or resolution as if the rent or payment accrued
due from day to day. Provided that where the Liquidator remains in occupation
of the premises demised to a company which is being wound-up nothing herein
contained shall prejudice or affect the right of the landlord of such premises
to claim payment by the company, or the Liquidator, of rent during the period
of the company’s or liquidator’s occupation.
Proof of debt payable at a future time.
158.A creditor may prove
for a debt not payable at the date of the winding-up order or resolution, as if
it were payable presently, and may receive dividends equally with the other
creditors, deducting only thereout a rebate of interest at the rate of four per
cent per annum computed from the date of declaration of the dividend to the
time when the debt would have become payable according to the terms on which it
was contracted.
159.The Liquidator shall,
with all convenient speed, examine every proof of debt lodged with him and the
grounds of the debt. He may call for the production of the vouchers if any
referred to in the affidavit of proof or require further evidence in support of
the debt. If he requires further evidence, or requires that the creditor should
attend the investigation in person, he shall fix a day and time at which the
creditor is required to attend or to produce further evidence and send a notice
to such creditor in Form No. 68 by pre-paid registered post so as to reach him
not later than 7 days before the date fixed.
Official Liquidator’s right to summon any person in
connection with the investigation.
160.The Official Liquidator in a winding-up by the
Court may summon any person whom he may deem capable of giving information
respecting the debts to be proved in liquidation and may require such person to
produce any documents in his custody or power relating to such debts and shall
tender with the summons such sum as appears to the Official Liquidator
sufficient to defray the travelling and other expenses of the person summoned
for one day’s attendance. Where the person so summoned fails without lawful
excuse to attend or produce any documents in compliance with the summons or
avoids or evades service, the Official Liquidator may apply to the Court for
the issue of a warrant for the apprehension of such person and the production
before him of such documents as may be required, or for other appropriate
orders.
161.For the purpose of his duties in relation to
the admission of proof of debts, the Official Liquidator may administer oaths
and take affidavits.
162. Unless otherwise ordered by the Judge, a creditor shall bear the costs
of proving his debt.
Acceptance
or rejection of proof to be communicated.
163.After such investigation as he may think
necessary, the Liquidator shall in writing admit or reject the proof in whole
or in part. Every decision of the Liquidator accepting or rejecting a proof,
either wholly or in part, shall be communicated to the creditor concerned by
post under certificate of posting where the proof is admitted and by registered
post for acknowledgement where the proof is rejected wholly or in part, provided
that it shall not be necessary to give notice of the admission of a claim to a
creditor who has appeared before the Liquidator and the acceptance of whose
claim has been communicated to him or his agent in writing at the time of
acceptance. Where the Liquidator rejects a proof, wholly or in part, he shall
state the grounds of the rejection to the creditor in Form No. 69. Notice of
admission of proof shall be in Form No. 70.
164.If a creditor is dissatisfied with the
decision of the Liquidator in respect of his proof, the creditor may, not later
than 21 days from the date of service of the notice upon him of the decision of
the Liquidator, appeal to the Court against the decision. The appeal shall be
made by a Judge’s summons; supported by an affidavit which shall set out the
grounds of such appeal, and notice of the appeal shall be given to the
Liquidator. On such appeal, the Court shall have all the powers of an appellate
Court under the Code.
Procedure
where creditor appeals.
165.(1)The Liquidator shall, upon receiving notice
of the appeal against a decision rejecting a proof wholly or in part, file with
the Registrar such proof with the order containing the grounds of rejection.
(2) It shall
be open to any creditor or contributory to apply to the Court for leave to
intervene in the appeal, and the Court may, if it thinks fit, grant the leave
subject to such terms and conditions as may be just. Where such leave has been
granted notice of the hearing of the appeal shall be given to such creditor or
contributory.
Official
Liquidator not to be personally liable for costs.
166.The Official Liquidator shall in no case be
personally liable for costs in relation to an appeal from his decision
rejecting any proof wholly or in part.
Proofs
and list of creditors to be filed in Court.
167.In a winding-up by the Court, the Official
Liquidator shall, within three months from the date fixed for the submission of
proofs under rule 147 of these rules or such further time as the Court may allow,
file in Court a certificate in Form No. 71 containing a list of the creditors
who submitted to him proofs of their claims in pursuance of the advertisement
and the notices referred to in rule 148, the amounts of debt for which they
claimed to be creditors, distinguishing in such list the proofs admitted
wholly, the proofs admitted or rejected in part, and the proofs wholly
rejected. The proofs, with the memorandum of admission or rejection of the same
in whole or in part, as the case may be, endorsed thereon, shall be filed in
Court along with the certificate.
List of
creditors not to be varied.
168.The list as certified by the Official
Liquidator and filed in Court shall be the list of the creditors of the
company, and shall not be added to or varied except under orders of Court and
in accordance with such orders. Where an order is made adding to or varying the
list of creditors, the Official Liquidator shall amend the list in accordance
with such order.
Notice of
filing the list and inspection of the same.
169.Upon the filing of the certificate containing
the list of creditors as settled by the Official Liquidator, the Registrar
shall notify the filing thereof on the Court notice board, and the certificate
and the list of creditors as settled and the proofs relating thereto shall be
open to the inspection of every creditor or contributory on payment of a fee of
one rupee.
Procedure
in the District Court regarding proof of claims.
170.Rules 163 to 169 of these rules shall not
apply to proceedings in a winding-up in the District Court and in lieu thereof
rules 171 to 175 of these rules shall apply.
List of
proofs and summons for directions.
171.Where the winding-up is in a District Court,
the Official Liquidator attached to the Court shall, after such investigation
as he may think necessary, make out and file in the Court, within two months of
the date fixed for the submission of proofs under rule 147 of these rules, or
within such extended time as the Court may allow, a list verified by his
affidavit of all the debts and claims sent to him, distinguishing in such list
which of the debts and claims or parts thereof are in his belief justly due and
proper to be allowed without further evidence, with the reasons for his belief,
and which of them ought to be proved by the creditors, and shall also file with
the list all the proofs and the evidence received by him from the several
creditors in connection with their claims. He shall at the same time take out a
summons for the settlement of the list of creditors by the Court. The affidavit
verifying the list shall be in Form No. 72 and the summons shall be in Form No.
73.
Direction
at hearing of summons.
172.It shall not be necessary to issue notice of
the summons in the first instance and the summons shall be posted before the
Court for directions together with the list of creditors and the affidavit
verifying the same, filed by the Official Liquidator. Upon the hearing thereof,
the Court may allow such of the debts and claims or such parts thereof as in
the opinion of the Court do not require further proof, and shall require
further proof of such of the debts and claims or parts thereof as in the
opinion of the Court require to be proved by the claimants. The Court shall fix
a date for the adjudication of the claims which are to be proved, and shall
adjourn the summons to the date so fixed.
Notice to
be given to creditors.
173.Not less than 14 days before the date fixed
for the proof of claims under the last preceding rule, the Official Liquidator
shall give notice by registered post individually to each of the creditors who
are required to prove their debts or claims or parts thereof, as the case may
be, to come in and prove before the Court on the date fixed. Such notice shall
be in Form No. 74. The Official Liquidator shall also give notice of the
admission of their claims by post individually to the creditors whose claims
have been admitted.
Settlement
of list of creditors.
174.On the date fixed or on any adjourned date,
the Court shall, after hearing such evidence as may be tendered, adjudicate
upon the claims and settle the list of creditors. The settlement of the list of
creditors shall be recorded in a certificate signed by the Judge in Form No.
75.
Inspection
of the list of creditors and the proofs filed.
175.The list of creditors as settled and the
proofs filed shall be open to the inspection of every creditor and contributory
on payment of a fee of one rupee.
176.(1) If after the admission of a proof, the
Liquidator has reason to think that the proof has been improperly admitted or
admitted by a mistake, he may apply to the Court upon notice to the creditor
who made the proof, to expunge the proof or reduce its amount, as the case may
be.
(2) Any creditor
or contributory may also apply to the Court to expunge a proof or reduce the
amount thereof, if the Liquidator declines to move in the matter, and on such
application, the Court may pass such orders as it may think just.
Procedure
on failure to prove the debt within the time fixed.
177.If any creditor fails to file proof of his
debt with the Liquidator within the time specified in the advertisement
referred to in rule 148, such creditor may apply to the Court for relief, and
the court may thereupon, adjudicate upon the debt or direct the Liquidator to
do so.
Right of
creditor who has not proved debt before declaration of dividend.
178.Any creditor who has not proved his debt
before the declaration of any dividend or dividends shall be entitled to be
paid out of any money for the time being in the hands of the Liquidator
available for distribution of dividend, any dividend or dividends which he may
have failed to receive before that money is applied to the payment of any
future dividend or dividends, but he shall not be entitled to disturb the
distribution of any dividend declared before his debt was proved by reason that
he has not participated therein.
Payment
of subsequent interest.
179.In the event of there being a surplus after
payment in full of all the claims admitted to proof, creditors whose proofs
have been admitted shall be paid interest from the date of the winding-up order
or of the resolution, as the case may be, up to the date of the declaration of
the final dividend, at a rate not exceeding 4 per cent per annum, on the
admitted amount of the claim, after adjusting against the said amount the
dividends declared as on the date of the declaration of each dividend.
Settlement of the list of
contributories in a winding-up by the Court
Provisional
list of contributories.
180.(1)Unless the Court dispenses with the
settlement of a list of contributories, the Official Liquidator shall prepare
and file in the Court not later than 21 days after the date of the order on the
application for directions referred to in rule 139 of these Rules, a
provisional list of contributories of the company with their names and
addresses, the number of shares or the extent of interest to be attributed to
each contributory, the amount called up and the amount paid up in respect of
such shares or interest, and distinguishing in such list the several classes of
contributories.
(2)The list
shall consist of every person who was a member of the company at the
commencement of the winding-up or his representative, and shall be divided into
two parts, the first part consisting of those who are contributories in their
own right, and the second part, of those who are contributories as being
representatives of, or liable for the debts of, others. The list shall be in
Form No. 76.
Notice to
be given of date of settlement of list.
181.(1)Upon the filing of the provisional list,
the Official Liquidator shall, subject to any directions of the Judge on the
application for directions referred to in rule 139 of these rules, fix a date
not later than one month from the date of the filing of the provisional list
for the settlement of the list before him, and shall give notice thereof to
every person included in such list, stating in such notice in what character
and for what number of shares or extent of interest such person is included in
the list, the amount called up and the amount paid up in respect of such shares
or interest. Such notice shall be in Form No. 77 and shall be sent by pre-paid
letter post under certificate of posting to every person included in the list
at the address mentioned therein so as to reach him in the ordinary course of
post not later than 14 days before the date fixed for the settlement.
(2) The person who posted the notices shall swear
to an affidavit in Form No. 78 relating to the despatch thereof and the
affidavit shall be filed with the proceedings.
182.On the date fixed for the settlement of the
list, the Official Liquidator shall hear any person who objects to being
settled as a contributory or to being settled as a contributory in such
character or for such number of shares or extent of interest as is mentioned in
the provisional list, and after such hearing, shall finally settle the list.
The list when so settled shall be the list of contributories of the company.
Certificate
of final settlement to be filed in Court.
183.Within 7 days after the settlement of the list
the Official Liquidator shall file in Court a certificate of the list of
contributories as finally settled by him. Such certificate shall be in Form No.
79.
Notice of
settlement to contributories.
184.(1)Upon the filing of the certificate, the
Official Liquidator shall forthwith give notice to every person placed on the
list of contributories as finally settled, stating in what character and for
what number of shares or interest he has been placed on the list, what amount
has been called up and what amount paid up in respect of such shares or
interest, and in the notice he shall inform such person that any application
for the removal of his name from the list or for a variation of the list, must
be made to the Court within 21 days from the date of service on the
contributory of such notice. Such notice shall be in Form No. 80, and shall be
sent to each person settled on the list by pre-paid registered post for
acknowledgement at the address mentioned in the list as settled.
(2) An
affidavit of service relating to the despatch of the notices to the
contributories under this rule shall be sworn to by the person who despatched
the said notices and shall be filed in Court within 14 days of the filing by
the Official Liquidator of his certificate of the list of contributories under
rule 183 of these rules. Such affidavit shall be in Form No. 81.
Supplemental
list of contributories.
185.The Official Liquidator may from time to time
add to the list of contributories by a supplemental list or lists and any such
addition shall be made in the same manner in all respects as the settlement of
the original list. A supplemental list shall be in Form No. 82.
186.(1)Save as provided in the last preceding
rule, the certificate of the list of contributories shall not be varied, and no
person settled on the list as a contributory shall be removed from the list, or
his liability in any way varied, except by order of Court and in accordance
with such orders.
(2)Where the
Court makes an order varying the list of contributories, the Official
Liquidator shall amend the list in accordance with the order of the Court.
Application
by Official Liquidator for rectification of list.
187.If after the settlement of the list of
contributories the Official Liquidator has reason to think that a contributory
who had been included in the provisional list has been improperly or by mistake
excluded or omitted from the list of contributories as finally settled or that
the character in which or the number of shares or extent of interest for which
he has been included in the list as finally settled or any other particular
contained therein requires rectification in any respect, he may, upon notice to
the contributory concerned, apply to the Court for such rectification of the
list as may be necessary and the Court may, on such application, rectify or
vary the list as it may think fit.
Application
by contributory to vary the list.
188.Subject to the power of the Court to extend
the time or to allow an application to be made notwithstanding the expiration
of the time limit for that purpose, no application to the Court by any person
who objects to his being settled on the list of contributories as finally
settled by the Official Liquidator shall be entertained after the expiration of
21 days from the date of service on such person of the notice of the settlement
of the list. An order varying a list of contributories shall be in Form No. 83,
and an order rectifying the Register of Members and the list of contributories
shall be in Form No. 84.
Official
Liquidator not to be personally liable for costs.
189.The Official Liquidator shall not in any case
be personally liable to pay any costs of, or in relation to, an application to
set aside or vary his act or decision settling the name of a person on the list
of contributories of a company.
Settlement
of the list of contributories in District Courts.
190. Where winding-up proceedings are held in a
District Court, the Court shall settle the list of contributories and rules 181
to 189 of these rules shall not apply and in lieu thereof rules 191 to 194 of
these rules shall apply to proceedings in a District Court.
Notice to
be given of date of settlement.
191.(1)In a District Court, upon the filing of the
provisional list of contributories mentioned in rule 180, the Official
Liquidator shall obtain an appointment from the Judge to settle the list, and
shall give notice of the date appointed to every person included in such list,
stating in such notice in what character and for what number of shares or
extent of interest such person is included in the list, the amount called up
and the amount paid up in respect of such shares or interest, and informing
such person by such notice that if he intends to object to his being settled as
a contributory in such character and for such number of shares or interest as
mentioned in the list, he should file in Court his affidavit if any in support
of his contention, and serve a copy of the same on the Official Liquidator not
less than 2 days before the date fixed for the settlement, and appear before
Court on the date appointed for the settlement in person or by advocate. Such notice
shall be in Form No. 85, and shall be sent by registered post for
acknowledgement to every person included in the list so as to reach him in the
ordinary course of post not less than 14 days before the date fixed for the
settlement.
(2) The
person who posted the notices shall swear to an affidavit in Form No. 78
relating to the despatch thereof, and file the same in Court not later than 2
days before the date fixed for the settlement of the list.
192.On the date appointed for the settlement of
the list, the Court shall hear any person who objects to being settled as a
contributory or as a contributory in such character or for such number of
shares or extent of interest as is mentioned in the list, and after such
hearing, shall finally settle the list. The list when settled shall be
certified by the Judge under his signature and shall be in Form No. 86.
Supplemental
list of contributories.
193.The Court may from time to time add to the
list of contributories by a supplemental list or lists and any such addition
shall be made in the same manner in all respects as the settlement of the
original list.
Application
for rectification of list.
194.If after the settlement of the list of contributories
the Official Liquidator has reason to think that a contributory who had been
included in the provisional list has been improperly or by mistake excluded or
omitted from the list of contributories as finally settled or that the
character in which or the number of shares or extent of interest for which he
has been included in the list as finally settled or any other particular
contained therein, requires rectification in any respect, he may, upon notice
to the contributory concerned, apply to the Court for such rectification of the
list as may be necessary, and the Court may, on such application, rectify or
vary the list as it may think fit.
List of
contributories consisting of past members.
195.It shall not be necessary to settle a list of
contributories consisting of the past members of a company unless so ordered by
the Court. Where an order is made for settling a list of contributories
consisting of the past members of a company, the provisions of these Rules
shall apply to the settlement of such list in the same manner as they apply to
the settlement of the list of contributories consisting of the present members.
List of
contributories under section 104(1)(b).
196.Where on the application of a creditor made
under section 104(1)(b) the Court thinks fit to direct that a list of persons
liable to contribute to his debt or claim be settled, such list shall be
settled in the same manner as a list of ordinary contributories of a company in
a winding-up.
‘Court
meetings’, ‘Liquidator’s meetings’ and ‘voluntary Liquidation meetings’.
197.(1)In addition to the meetings of creditors
and contributories which may be directed to be held by the Court under section
557, hereinafter referred to as Court meetings of creditors and contributories,
the Official Liquidator may, in a winding-up by the Court, as and when he
thinks fit, summon and hold meetings of the creditors and contributories,
herein- after referred to as Liquidator’s meetings of creditors and
contributories, for the purpose of ascertaining their wishes in all matters
relating to the winding-up and such meetings shall be summoned, held and
conducted in the manner provided by these Rules and subject to the control of
the Court.
(2) In a
creditors’ voluntary winding-up, the liquidator may himself from time to time
summon, hold and conduct meetings of creditors for the purpose of ascertaining
their wishes in all matters relating to the winding up—(Such meetings and all
meetings of creditors which a liquidator of a company is by the Act required to
convene in or immediately before such a voluntary winding-up and all meetings
convened by a creditor in a voluntary winding-up under these Rules are
hereinafter called voluntary liquidation meetings).
Application
of Rules to meetings.
198.(1)Except where and so far as the nature of
the subject matter or the context may otherwise require, the Rules as to
meetings as hereinafter set out shall apply to Court meetings, Liquidator’s
meetings of creditors and contributories and voluntary liquidation meetings,
provided that in the case of Court meetings, the Rules shall apply only subject
to any directions given by the Court.
199.(1)The Liquidator shall summon all meetings of
creditors and contributories by giving not less than 14 days notice of the time
and place appointed for the meeting by advertisement in one daily newspaper in
the English language and one daily newspaper in the regional language
circulating in the State or Union territory concerned as the liquidator may
consider suitable, and by sending individually to every creditor of the company
notice of the meeting of creditors, and to every contributory of the company
notice of the meeting of contributories, by pre-paid letter post under
certificate of posting so as to reach such person in the ordinary course of
post not less than 14 days before the date fixed for the meeting.
(2) The
notice to each creditor shall be sent to the address given in his proof or, if
he has not proved, to the address given in the statement of affairs, or, if
there is no statement of affairs, to the address given in the books of the
company, or to such other address as may be known to the person summoning the
meeting. The notice to each contributory shall be sent to the address mentioned
in the books of the company as the address of such contributory or to such
other address as may be known to the person summoning the meeting.
(3) In the case of meetings under section 506, the
continuing liquidator, or if there is no continuing liquidator, any creditor
may summon the meeting.
(4) The
notices shall be in such of the Form Nos. 87 to 91 as may be appropriate, and
Form Nos. 90 and 91 may be used suitably altered in the case of voluntary
liquidation meetings.
(5) This rule shall not apply to meetings under
section 500 or 509.
200.Every meeting shall be held at such place and
time as the person convening the same considers most convenient for the
majority of the creditors or contributories or both. Different times or places
or both may, if thought fit, be appointed for the meetings of creditors and the
meetings of contributories.
Notice of
first or other meeting to officers of company.
201.(1)In a winding-up by the Court, the Official
Liquidator shall also give to each of the officers of the company, who in his
opinion ought to attend the first or any other meeting of creditors or contributories,
fourteen days’ notice of the time and place appointed for such meeting. The
notice may either be delivered personally or sent by registered post for
acknowledgement as may be convenient. It shall be the duty of every officer who
receives notice of such meeting to attend if so required by the Liquidator, and
if any such officer fails to attend, the Liquidator may report such failure to
the Court. Such notice shall be in Form No. 92.
(2) The
Official Liquidator, if he thinks fit, may, instead of requiring any of the
officers of the company to attend the meeting as aforesaid, require such
officer to answer any interrogatories or to furnish in writing any information
that he may require for purposes of such meeting, and if such officer fails to
answer the interrogatories or furnish such information, he shall report such
failure to the Court.
202.An affidavit by the clerk of the Official
Liquidator, or by any person who sent the notices, that such notices have been
duly sent, shall be sufficient evidence of the notices having been sent to the
persons to whom the same were addressed. In the case of Court meetings, the
affidavit shall be filed in Court and in the case of Liquidator’s meetings, the
affidavit shall be filed with the Official Liquidator. Such affidavit shall be
in Form No. 93.
Costs of
calling meetings at instance of creditor or contributory.
203.Where a creditor or contributory desires the
liquidator to convene a meeting, the liquidator may require such creditor or
contributory to deposit as a condition precedent thereto a sum sufficient for
the costs thereof, to be computed as hereinafter provided; and on any
application to the Court by a creditor or contributory to direct the Liquidator
to convene a meeting, the Judge may, if he thinks fit, require the applicant to
deposit a similar sum for such costs. Such sum shall include all disbursements
necessary to be made for printing, stationary, postage and hire of room, to be
calculated at the rate of Re. 1 for each creditor or contributory up to the
first 25 creditors or contributories, 50 Paise for each creditor or
contributory for the next 75 creditors or contributories, 25 Paise for each
creditor or contributory above the first 100 creditors or contributories. The
sum so deposited shall be repaid to the person depositing the same out of the
assets of the company, if the Court shall by order, or if the creditors shall
by resolution, so direct.
This Rule shall not apply to meetings to be
summoned by the Official Liquidator under section 460(3)(b) or to a meeting
summoned at the instance of a creditor under section 506.
204.Where a meeting is summoned by the liquidator,
the liquidator, or some person nominated by him, shall be the chairman of the
meeting. The nomination shall be in Form No. 94. At every other meeting of
creditors or contributories, not being Court meetings of creditors and
contributories, the chairman shall be such person as the meeting by resolution
shall appoint. This Rule shall not apply to meetings under section 500.
Resolution
at creditors’ meeting.
205.At a meeting of creditors, a resolution shall
be deemed to be passed, when a majority in number and value of the creditors
present personally or by proxy, and voting on the resolution, have voted in
favour of the resolution. In a winding-up by the Court, the value of a creditor
shall, for the purposes of a first meeting of the creditors or of a meeting
held under section 464, be deemed to be the value as shown in the books of the
company, or the amount mentioned in his proof, whichever is less, and for the
purposes of any other meeting, the value for which the creditor has proved his
debt or claim.
Resolution
at contributories’ meeting.
206.At a meeting of the contributories, a
resolution shall be deemed to be passed when a majority in number and value of
the contributories present personally or by proxy and voting on the resolution
have voted in favour of the resolution. The value of the contributories shall
be determined according to the number of votes to which each contributory is
entitled as a member of the company under the provisions of the Act, or the
regulations of the company, as the case may be.
Copies of
resolutions to be filed.
207.In a winding-up by the Court, the Official
Liquidator shall file in Court a copy certified by him of every resolution
passed at a meeting of creditors or contributories. The Registrar shall keep in
each case a file of such resolutions.
Non-receipt
of notice by a creditor or contributory.
208.Where a meeting of creditors or contributories
is summoned by notice, the proceedings and resolutions at the meeting shall,
unless the Court otherwise orders, be valid notwithstanding that some creditors
or contributories may not have received the notice sent to him.
209.The chairman may, with the consent of the
meeting, adjourn it from time to time, but the adjourned meeting shall be held
at the same place as the original meeting unless in the resolution for
adjournment another place is specified or unless the Court otherwise orders.
210.A meeting may not act for any purpose except
for adjournment thereof unless there are present or represented thereat in the
case of a creditors meeting at least three creditors entitled to vote or in the
case of a meeting of contributories at least three contributories, or all the
creditors entitled to vote or all the contributories if the number of creditors
entitled to vote or the number of contributories, as the case may be, shall not
exceed three.
Procedure
in the absence of quorum.
211.If, within half an hour from the time
appointed for the meeting, a quorum of creditors or contributories, as the case
may be, is not present or represented, the meeting shall be adjourned to the same
day in the following week at the same time and place, or to such other day, or
time or place as the chairman may appoint, but the day appointed shall be not
less than 7 or more than 14 days from the day from which the meeting was
adjourned. If at such adjourned meeting, a quorum be not present, two creditors
or contributories present in person shall form a quorum and may transact the
business for which the meeting was convened.
212.In the case of a meeting of creditors held
under section 464 or of any adjournment thereof, a person shall not be entitled
to vote as a creditor unless he has duly lodged with the Official Liquidator,
not later than the time mentioned for that purpose in the notice convening the
meeting, a proof of the debt which he claims to be due to him from the company.
In the case of other meetings of creditors a person shall not be entitled to
vote as a creditor unless he has lodged with the Official Liquidator a proof of
the debt which he claims to be due to him from the company and such proof has
been admitted wholly or in part before the date on which the meeting is held :
Provided that this rule and the next four following rules shall not apply to a
court meeting of creditors held prior to the meeting of creditors under section
464 :
Provided further that this rule shall not apply to any
creditors or class of creditors who by virtue of these rules or any directions
given thereunder are not required to prove their debts, or to any voluntary
liquidation meetings.
Cases to
which creditors may not vote.
213.A creditor shall not vote in respect of any
unliquidated or contingent debt or any debt the value of which is not
ascertained, nor shall a creditor vote in respect of any debt on or secured by
a current bill of exchange or promissory note held by him unless he is willing
to treat the liability to him thereon of every person who is liable thereon
antecedently to the company, and against whom no order of adjudication has been
made, as a security in his hands, and to estimate the value thereof, and for
the purposes of voting, but not for purposes of dividend, to deduct it from his
proof.
When
secured creditor can vote.
214.(1)For the purposes of voting at a meeting, in
a winding-up by the Court, a secured creditor shall unless he surrenders his
security, state in his proof the particulars of his security, the date when it
was given and the value at which he assesses it, and shall be entitled to vote
only in respect of the balance due to him, if any, after deducting the value of
his security.
(2) For the
purposes of voting at any voluntary liquidation meetings, a secured creditor
shall, unless he surrenders his security, lodge with the liquidator, or where
there is no liquidator, at the registered office of the company, before the
meeting, a statement giving the particulars of his security, the date when it
was given and the value at which he assesses it, and shall be entitled to vote
only in respect of the balance due to him, if any, after deducting the value of
his security.
Effect of
voting by a secured creditor.
215.If a secured creditor votes in respect of his
whole debt, he shall be deemed to have surrendered his security, unless the
Court on application is satisfied that the omission to value the security was
due to inadvertence.
Procedure
when secured creditor votes without surrendering security.
216.The liquidator may within 28 days from the
date of the meeting at which a secured creditor voted on the basis of his
valuation of the security, require him to give up the security for the benefit
of the creditors generally on payment of the value so estimated by him, and
may, if necessary, apply to the court for an order to compel such creditor to
give up the security :
Provided that the Court may, for good cause shown, permit a creditor to correct
his valuation before being required to give up the security, upon such terms as
to costs as the Court may consider just.
Admission
or rejection of proofs for purposes of voting.
217.The chairman shall have power to admit or
reject a proof for the purpose of voting, but his decision shall be subject to
appeal to the Court. If he is in doubt whether a proof shall be admitted or
rejected, he shall mark it as objected to and allow the creditor to vote
subject to the vote being declared invalid in the event of the objection being
sustained.
218.(1)The chairman shall cause minutes of the
proceedings at the meeting to be drawn up and fairly entered in the Minutes
Book and the minutes shall be signed by him or by the chairman of the next
meeting.
(2) A list
of creditors and contributories present at every meeting shall be made and kept
as in Form No. 95.
219.Where a meeting is summoned under the direction
of the Court, the chairman shall, within the time fixed by the court, or if no
time is fixed within 7 days of the conclusion of the meeting, report the result
thereof to the Court. Such report shall be in Form No. 96.
220.A creditor or contributory may vote either in
person or by proxy. Where a person is authorised in the manner provided by
section 187 to represent a Corporation at any meeting of creditors or
contributories, such person shall produce to the Official Liquidator or other
chairman of the meeting a copy of the resolution so authorising him. Such copy
must be certified to be a true copy by a director, the manager, the secretary
or other officer of the company duly authorised in that behalf who shall
certify that he is so authorised.
221.A creditor or contributory may give a general
proxy or a special proxy to any person. A General proxy shall be in Form No. 97
and a special proxy in Form No. 98.
Proxies
to Liquidator or Chairman.
222.A creditor or contributory in a winding-up by
the Court may appoint the Official Liquidator, and in a voluntary winding up
the liquidator, or if there is no liquidator, the Chairman of the meeting, to
act as his general or special proxy.
223.Where an Official Liquidator who holds any
proxies cannot attend the meeting for which they are given, he may in writing
depute some person under his official control to use the proxies on his behalf
and in such manner as he may direct.
224.Forms of proxies shall be sent to the
creditors and contributories with the notice summoning the meeting. No name
shall be inserted or printed in the form before it is sent.
225.A proxy shall be lodged not later than 48
hours before the meeting at which it is to be used, with the Official
Liquidator in a winding-up by the court, with the company at its registered
office for a meeting under section 500, and with the liquidator, or if there is
no liquidator, with the person named in the notice convening the meeting to
receive the same, in a voluntary winding-up.
Holder of
proxy not to vote on matter in which he is financially interested.
226.No person acting either under a general or
special proxy shall vote in favour of any resolution which would directly or
indirectly place himself, his partner or employer in a position to receive any
remuneration out of the assets of the company otherwise than as a creditor
ratably with the other creditors of the company.
Minor not
to be appointed proxy.
227. No person shall be appointed as a general or special proxy who is a
minor.
Filling in
proxy where creditor or contributory is blind or incapable.
228.The proxy of a creditor or a contributory
blind or incapable of writing may be accepted if such creditor or contributory has
attached his signature or mark thereto in the presence of a witness who shall
add to his signature his description and address :
Provided that all insertions in the proxy are in the handwriting of the witness
and such witness shall have certified at the foot of the proxy that all such
insertions have been made by him at the request and in the presence of the
creditor or contributory before he attached his signature or mark.
Proxy of
person not acquainted with English.
229.The proxy of a creditor or contributory who
does not know English may be accepted if it is executed in the manner
prescribed in the last preceding rule and the witness certifies that it was
explained to the creditor or contributory in the language known to him, and
gives the creditor’s or contributory’s name in English below the signature.
Attendance and appearance of
creditors and contributories
230.(1) Save as otherwise provided by these rules
or by an order of Court, every person for the time being on the list of
contributories of the company and every creditor whose debt has been admitted
by the Official Liquidator wholly or in part shall be at liberty at his own
expense to attend the proceedings before the Court or before the Official
Liquidator and shall be entitled upon payment of the costs occasioned thereby
to have notice of all such proceedings as he shall, by request in writing
addressed to the Official Liquidator, desire to have notice of ; but if the
court shall be of opinion that the attendance of any such person has occasioned
any additional costs which ought not to be borne by the funds of the company,
it may direct such costs or a gross sum in lieu thereof to be paid by such
person and such person shall not be entitled to attend any further proceedings
until he had paid the same.
(2) No
contributory or creditor shall be entitled to attend any proceedings before the
Judge, unless and until he or an Advocate on his behalf has filed an appearance
with the Registrar. The Registrar shall keep an ‘Appearance Book’ in which all
such appearances shall be entered. Such book shall be open to the inspection of
the Official Liquidator.
Representation
of creditors and contributories before Court.
231.The court may, if it thinks fit, appoint from
time to time any one or more of the creditors or contributories to represent
before the court at the expense of the company all or any class of creditors or
contributories upon any question or in relation to any proceedings before the
court, and may remove any person so appointed. If more than one person is
appointed under this rule to represent one class, the persons so appointed
shall employ the same advocate to represent them, and where they fail to agree
as to the advocate to be employed, the Judge may nominate an advocate for them.
Collection and distribution of assets in a winding-up by court
Powers of
Official Liquidator.
232.The duties imposed on the Court by sub-section
(1) of section 467 with regard to the collection of the assets of the company
and the application of the assets in discharge of the company’s liabilities
shall be discharged by the Official Liquidator as an officer of the Court
subject to the control of the Court and to the proviso in section 643(2).
Official
Liquidator to be in the position of a Receiver.
233.For the discharge by the Official Liquidator
of the duties imposed by sub-section (1) of section 467 and the last preceding
rule the Official Liquidator shall, for the purpose of acquiring and retaining possession
of the property of the company, be in the same position as if he were a
Receiver of the property appointed by the Court, and the court may on his
application enforce such acquisition or retention accordingly.
Company’s
property to be surrendered to Official Liquidator on requisition.
234.The powers conferred on the Court by section
468 may be exercised by the Official Liquidator. Any contributory for the time
being on the list of contributories, trustee, receiver, banker or agent or
officer of a company which is being wound up under order of the Court, shall on
notice from the Official Liquidator and within such time as he shall by notice
require, pay, deliver, convey, surrender or transfer to or into the hands of
the Official Liquidator any money, property or documents, books or papers which
happen to be in his hands for the time being and to which the company is prima
facie entitled. Where the person so required fails to comply with the notice,
the Official Liquidator may apply to the Court for appropriate orders. The
notice shall be in Form No. 99.
Calls in a winding-up by the court
Calls by
the Official Liquidator.
235.Subject to the proviso to sub-section (2) of
section 643, the powers and duties conferred upon the court by section 470 in
relation to making calls, may be exercised by the Official Liquidator as
hereinafter provided.
Official
Liquidator to realise uncalled capital.
236.Notwithstanding any charge or encumbrance on
the uncalled capital of the company, the Official Liquidator shall alone be
entitled to call and realise the uncalled capital of the company and to collect
the arrears if any due on calls made prior to the winding-up, but shall hold
all moneys so realised subject to the rights, if any, of the holder of any such
charge or encumbrance.
Application
for leave to make call.
237.(1)The Official Liquidator shall not make any
call without obtaining the leave of the Court for the purpose.
(2) At any time after the settlement of the list
of contributories, the Official Liquidator may apply by summons to the Court
for leave to make a call on the contributories. The summons shall state the
proposed amount of such call and shall be in Form No. 100. It shall be
supported by the affidavit of the Official Liquidator which shall be in Form No.
101.
238.Notice of an application for leave to make a
call shall be served on every contributory proposed to be included in such
call, by post under certificate of posting so as to reach such contributory in
the ordinary course of post not less than 7 clear days before the date
appointed for the hearing thereof, or if the Court so directs, notice of the
application may be given by advertisement in Form No. 102, in such papers as
the Court shall direct not less than 7 clear days before the date appointed for
the hearing, without a separate notice to each contributory. The affidavit of
service relating to the despatch of notice to each contributory, or to the
advertisement, as the case may be, shall be filed three days before the date
fixed for the hearing.
Order
granting leave to make a call and document making the call.
239.The order granting leave to make a call shall
be in Form No. 103, and shall contain directions as to the time within which
such calls shall be paid. When an order has been made granting leave to make a
call, the Official Liquidator shall file in Court a document making the call in
Form No. 104 with such variations as circumstances may require.
240.Soon after filing the document making the call
under the last preceding rule, the Official Liquidator shall serve by
registered post a copy of the order granting leave to make the call upon each
of the contributories included in such call together with a notice in Form No.
105 specifying the amount or balance due from such contributory in respect of
such call. The order granting leave to make a call need not be advertised
unless the Court otherwise orders for any special reason.
241.The Official Liquidator may apply to the Court
for an order against any contributory or contributories for payment of moneys
due on the calls made by him. The application shall be made by summons in Form
No. 106 and shall be supported by an affidavit in Form No. 107. Notice of the
application together with a copy of the affidavit shall be served on the
contributory by registered post for acknowledgement not less than 14 days
before the date fixed for the hearing of the summons. The order for payment
shall be in Form No. 108.
Other
moneys due by contributories.
242.Where any money is due to the company from a
contributory or from the estate of the person whom he represents, other than
moneys due on calls made subsequent to the winding-up, but including moneys due
on calls made prior to the winding-up, the Official Liquidator may make an
application to the Court supported by an affidavit for an order against such
contributory for the payment of such moneys. Notice of the application shall be
given to such contributory by registered post not less than 14 days prior to
the date fixed for the hearing of the application.
Examination under sections 477 and 478
Application
for examination under section 477.
243.(1)An application for the examination of a
person under section 477 may be made ex parte, provided that where the
application is made by any person other than the Official Liquidator, notice of
the application shall be given to the Official Liquidator.
(2) The
summons shall be in Form No. 109 and, where the application is by the Official
Liquidator, shall be accompanied by a statement signed by him setting forth the
facts on which the application is based. Where the application is made by a
person other than the Official Liquidator, the summons shall be supported by an
affidavit of the applicant setting forth the matters in respect of which the
examination is sought and the grounds relied on in support of the summons.
Directions
at hearing of summons.
244.Upon the hearing of the summons the Judge may,
if satisfied that there are grounds for making the order, make an order
directing the issue of a summons against the person named in the order for his
examination and/or for the production of documents. Unless the Judge otherwise
directs, the examination of such person shall be held in Chambers. The order
shall be in Form No. 110.
Examination
on commission or by interrogatories.
245.The Court may, if it thinks fit, instead of
issuing a summons to any person for his appearance before the Court for
examination, issue a commission to the District Judge within whose jurisdiction
such person resides for the examination of such person, or make an order for
his examination by interrogatories, as the Court may think fit.
246.The summons issued in pursuance of the order
shall be in Form No. 111 and shall be served on the person to be examined not
less than 7 days before the date fixed for the examination. When the summons is
served in person, there shall be paid or tendered to the person summoned along
with the summons a reasonable sum for his expenses to be fixed by the Judge or
Registrar with due regard to the scale of fees in force in the Court. When the
summons is served by registered post, such sum shall be sent to such person by
postal money order.
247.(1)The Official Liquidator shall have the
conduct of an examination under section 477, provided that the Court may, if
for any reasons it thinks fit to do so, entrust the conduct of the examination
to any contributory or creditor. Where the conduct of the examination is
entrusted to any person other than the Official Liquidator, the Official
Liquidator shall nevertheless be entitled to be present at the examination in
person or by advocate, and may take notes of the examination for his own use
and put such questions to the person examined as the Court may allow.
(2) Save as
aforesaid, no person shall be entitled to take part in an examination under
section 477 except the Official Liquidator and his advocate, but any person
examined shall be entitled to have the assistance of his advocate who may
re-examine the witness :
Provided that the Court may permit, if it thinks fit, any creditor or
contributory to attend the examination subject to such conditions as it may
impose.
(3) Notes of
the examination may be permitted to be taken by the witness or any person on
his behalf on his giving an undertaking to the Court that such notes shall be
used only for the purpose of the re-examination of the witness. On the conclusion
of the examination, the notes shall, unless otherwise directed, be handed over
to the Court for destruction.
248.(1) The notes of the deposition of a person
examined under section 477 shall be signed by such person and shall be lodged
in the Office of the Registrar. But the notes shall not be open to the
inspection of any creditor, contributory or other person, except the Official
Liquidator, nor shall a copy thereof or extract therefrom be supplied to any
person other than the Official Liquidator, save upon orders of Court.
(2) The
Court may from time to time give such general or special directions as it shall
think expedient as to the custody and inspection of such notes and the
furnishing of copies thereof or extracts therefrom.
Order for
public examination under section 478.
249.(1)Where an order is made for the examination
of any person or persons under section 478, the examination shall be held before
the Judge ; provided that in the case of a High Court, the Judge may direct
that the whole or any part of the examination of any such person or persons, be
held before any of the officers mentioned in sub-section (10) of the said
section as may be mentioned in the order. Where the date of the examination has
not been fixed by the order, the Official Liquidator shall take an appointment
from the Judge or officer before whom the examination is to be held as to the
date of the examination. The order directing a public examination shall be in
Form No. 112.
(2) The
Judge may, if he thinks fit, either in the order for examination or by any
subsequent order, give directions as to the specific matters on which such
person is to be examined.
250.Not less than 7 clear days before the date
fixed for the examination, the Official Liquidator shall give notice thereof to
the creditors and contributories of the company by advertisement in Form No.
113 in such newspapers as the Judge shall direct, and shall within the same
period, serve, either personally or by registered post, on the person or
persons to be examined, a notice in Form No. 114 of the date and hour fixed for
the examination and the officer before whom it is to be held, together with a
copy of the order directing the examination. Where a public examination is
adjourned, it shall not be necessary to advertise the adjournment or serve
notice thereof unless otherwise ordered.
Adjournment
of public examination to Court.
251.Where on an examination held before an officer
appointed by the Judge under rule 249 of these rules, such officer is of the
opinion that the examination is being unduly or unnecessarily protracted, or,
for any other sufficient cause he is of the opinion that the examination should
be held before the Judge, such officer may adjourn the examination of any
person, or any part of the examination, to be held before the Judge and submit
his report to the Judge. The Judge may thereupon hold the examination himself
or pass such orders as he may think fit.
252.If a person examined before an officer
appointed by the Judge under rule 249 of these rules refuses to answer to the
satisfaction of such officer any question which he may put or allow to be put,
such officer shall report such refusal to the Judge and upon such report being
made the person in default shall be in the same position and be dealt with in
the same manner as if he had made default in answering before the Judge.
The report shall be in writing and shall set
forth the question or questions put and the answer or answers given (if any) by
the person examined, and the officer shall notify the person examined of the
date when he should attend before the Judge. The report shall be in Form No.
115. Upon receiving the report, the Judge may take such action thereon as he
shall think fit.
253.The notes of every public examination shall,
after being signed as required by sub- section (8) of section 478, form part of
the records of winding-up. The Official Liquidator, the person examined and any
creditor or contributory of the company shall be entitled to obtain a copy
thereof from the court on payment of the prescribed charges.
Shorthand
notes of examination under sections 477 and 478.
254.In respect of any examination under section
477 or 478, the court may order that the evidence be taken down in shorthand.
Where such order is made, the Judge or the officer before whom the evidence is
taken shall nominate a person to take down the evidence and the costs, if any,
occasioned thereby shall be paid out of the assets of the company. The
shorthand note of the examination shall be transcribed and the transcript shall
be read over to or by the person examined, and signed by him.
Application
under section 478(7)(a).
255.(1)An application under sub-section (7)(a) of
section 478 by any person ordered to be publicly examined, to be exculpated
from any charges made or suggested against him, shall be made upon notice to
the Official Liquidator and to such other persons as the Court may direct.
Default
in attending examination under section 477 or 478.
256.(1)If any person who has been directed by the
court to attend for examination under section 477 or section 478 fails to
attend at the time and place appointed for holding or proceeding with the same,
and no good cause is shown by him for such failure, or if before the day
appointed for such examination, the Official Liquidator satisfies the court
that such person has absconded or that there is reason to believe that he is
about to abscond with the view of avoiding the examination, the Court may, if
satisfied that notice of the date and hour fixed for the examination was duly
served on such person, issue without any further notice a warrant in Form No.
116 for the arrest of the person required to attend, or make such other order
as the Court thinks just.
(2)Every
warrant of arrest of any person issued under these rules shall remain in force
until it is cancelled by the court which issued it or by the Court to which
appeals ordinarily lie from the decisions of such court, or until it is
executed.
Prison to
which person arrested on warrant is to be taken.
257.Where the Court issues a warrant for the
arrest of a person under these rules, the prison (to be named in the warrant)
to which the person shall be committed shall, unless the Court otherwise
orders, be the prison to which commitments are made by the court in the
exercise of its ordinary civil jurisdiction.
A warrant committing a person to prison shall
be in Form No. 117 and an order releasing him on bail in Form No. 118.
Execution
of warrant of arrest outside ordinary jurisdiction of Court.
258.(1)Where a warrant has been issued by the
Court under these rules for the arrest of any person who is or is believed to
be outside the ordinary jurisdiction of the Court, the court issuing the
warrant may send the warrant of arrest for execution to the District Court, or
to the Court of Small Causes at Bombay, Calcutta or Madras (if the warrant has
to be executed in any of these places), within the ordinary jurisdiction of
which such person shall then be or be believed to be, with a requisition in
Form No. 119 annexed thereto under the seal of the Court requesting execution
of the warrant by the Court to which it is sent, and the last mentioned Court
shall seal the warrant with its seal and shall cause the arrest to be made by
its own officers or by a Court subordinate to itself, and all police officers
shall aid and assist within their respective jurisdictions in the execution of
such warrant.
(2) The Court making the arrest shall send the
person arrested in proper custody to the Court by which the warrant of arrest
was originally issued, unless he furnishes the required security to the
satisfaction of the former Court for his appearance before the latter Court, in
which case the Court shall release him on such security and inform the Court by
which the warrant of arrest was originally issued accordingly.
Public
examination under section 519.
259.Where, in a voluntary winding-up, an order is
made under section 519 for the public examination of any of the persons
mentioned in the said section, the rules relating to a public examination under
section 478 in a winding-up by the Court shall apply mutatis mutandis in
respect of such examination.
Applications against delinquent directors, promoters and
officers of the company
Applications
under section 542 or 543.
260.An application under sub-section (1) of
section 542 or under sub-section (1) of section 543, shall be made by a summons
returnable in the first instance in Chambers. The summons shall state the
nature of the declaration or order for which the application is made, and the
grounds of the application, and shall be served on every person against whom an
order is sought not less than 8 days before the day named in the summons for
the hearing of the application. It shall not be necessary to file any affidavit
or report before the return of the summons. The summons shall be in Form No.
120 or 121 with such variations as may be necessary.
Directions
at preliminary hearing of summons.
261.On the return of the summons the Court may
give such directions as it shall think fit as to whether points of claim and
defence are to be delivered, as to the taking of evidence wholly or in part by
affidavit or orally, as to the cross-examination, before the Judge on the
hearing, either in Court or in Chambers, of any deponents to affidavits in
support of or in opposition to the application, as to any report it may require
the Liquidator to make, and generally as to the procedure on the summons and
for the hearing thereof. Points of claim to be delivered shall be in Form No.
122 or 123 with such variations as may be necessary.
262.Where the Court has directed that points of
claim and defence shall be delivered it shall be open to either party who
wishes to apply for any further direction as to any interlocutory matter, to
apply, by restoration of the summons, before the summons has been set down for
trial, for such direction, upon giving two clear days’ notice in writing to the
other party stating the grounds of the application. A copy of the notice shall
be filed with the Registrar two clear days before the day fixed for the hearing
of the application.
263.(1)An application for leave to disclaim any
part of the property of a company pursuant to sub-section (1) of section 535
shall be made by a summons supported by an affidavit setting out the full facts
relating to the property, the parties interested and the nature of their
interests, and stating whether the company is solvent and whether any notice
has been served on the liquidator by any party under sub-section (4) of the
said section requiring him to elect whether or not he will disclaim.
(2) Form
Nos. 124 to 130 shall be used in respect of the matters to which they relate
with such variations as may be necessary.
Preliminary
hearing of the summons.
264.The summons shall be posted before the Court
ex parte in the first instance for directions as to the persons on whom notice
of the summons should be served, and the Court shall thereupon fix a date for
the hearing of the summons and give such directions as may be necessary as to
the persons on whom notice of the summons should be served.
Claimant
to furnish statement of his interest.
265.Where a person claims to be interested in any
part of the property of a company which the Liquidator wishes to disclaim, such
person shall, if so required by the Liquidator, furnish a statement of the
interest claimed by him.
266.Notice of the date fixed for the hearing of
the summons shall be in Form No. 131 and shall be served not less than 7 days before
the date fixed for the hearing, together with a copy of the summons and of the
affidavit filed in support thereof. The notice shall require that any affidavit
in opposition to the summons shall be filed in Court and a copy thereof served
on the Liquidator of the company not later than 2 days before the date fixed
for the hearing.
Order
granting leave to disclaim.
267.On the hearing of the summons, the Court may
after hearing the Liquidator and such parties as may appear in response to the
notices issued, and such other persons appearing and interested as the Court
may think fit to hear, grant leave to the Liquidator and to disclaim on such
terms and conditions if any as to the Court may seem just. The order granting
leave to disclaim shall be in Form No. 132.
Disclaimer
to be filed in Court.
268.Every disclaimer shall be filed in Court by
the Liquidator and shall not be operative until it is so filed. Where the
disclaimer is in respect of a leasehold interest, it shall be filed in Court
forthwith. Notice of the filing of the disclaimer shall be given to the persons
interested in the property. The disclaimer shall contain particulars of the
interest disclaimed and a statement of the persons to whom notice of the
disclaimer has been given. A disclaimer shall be in Form No. 133, and a notice
of disclaimer in Form No. 134.
(2) Where a disclaimer has been filed in
Court, the Liquidator shall file a copy thereof with the Registrar of
Companies.
Vesting
of disclaimed property.
269.Where the disclaimed property is a leasehold
interest and an application is made under sub-section (6) of section 535 for an
order vesting the property in any person and it appears that there is an
under-lessee or mortgagee or holder of a charge by way of a demise in respect
of such property, claiming under the company, the Court may direct that notice
shall be given to such under-lessee, mortgagee or holder of charge, that if he
does not elect to accept and apply for a vesting order upon the terms required
by the above-mentioned sub-section and such other terms as the Court may think
just, within a time to be fixed by the Court and stated in the notice, he will
be excluded from all interest in and security upon the property. The Court may
adjourn the application for such notice to be given and for such under-lessee,
mortgagee or holder of charge, to be added as a party to and served with a copy
of the application, and to make, if he sees fit, such election and application
as is mentioned in the notice. If at the expiration of the time so fixed by the
Court, such under-lessee, mortgagee or holder of charge, fails to make such
election and application, the Court may make an order vesting the property in
the applicant or other person who, in the opinion of the Court, may be entitled
thereto, and excluding such under-lessee, mortgagee or holder of charge, from
all interest in or security upon the property.
An order requiring parties interested in a
disclaimed lease to apply for a vesting order or to be excluded from all
interests in the lease shall be in Form No. 135, and an order vesting lease and
excluding persons who have not elected to apply, shall be Form No. 136.
Compromise or abandonment of claims
No claim
to be compromised or abandoned without sanction of Court.
270.In a winding-up by or subject to the
supervision of the Court no claim by the company against any person shall be
compromised or abandoned by the Liquidator without the sanction of the Court
upon notice to such person as the Court may direct.
Application
for sanction of compromise.
271.Every application for sanction of a compromise
or arrangement with any person under clauses (ii) and (iii) of sub-section (1)
of section 546 shall be accompanied by a copy of the proposed compromise or
arrangement and shall be supported by an affidavit of the Liquidator stating
that for the reasons set out in the affidavit he is satisfied that the proposed
compromise or arrangement is beneficial to the company. The Court may, if it
thinks fit, direct notice of the application to be given to the Committee of
Inspection; if there is one, and to such other persons as it may think fit.
Sales by the official liquidator
272.Unless the Court otherwise orders, no property
belonging to a company which is being wound-up by the Court shall be sold by
the Official Liquidator without the previous sanction of Court, and every sale
shall be subject to confirmation by the Court.
273.Every sale shall be held by the Official
Liquidator, or, if the Judge shall so direct, by an agent or an auctioneer
approved by the Court and subject to such terms and conditions, if any, as may
be approved by the Court. All sales shall be made by public auction or by
inviting sealed tenders or in such manner as the Judge may direct.
274.Where property forming part of a company’s
assets is sold by the Official Liquidator through an auctioneer or other agent,
the gross proceeds of the sale shall, unless the Court otherwise orders, be
paid over to the Liquidator by such auctioneer or agent, and the charges and
expenses connected with the sale shall afterwards be paid to such auctioneer or
agent in accordance with the scales, if any, fixed by the Court.
Dividends and returns of capital in a winding-up by Court
Declaration
of dividend or return of capital.
275.No dividend to creditors or return of capital
to contributories shall be declared by the Official Liquidator without the
sanction of the Court.
276.The Official Liquidator shall give notice of
the declaration of dividend not less than one month prior to the date fixed for
the payment thereof. Unless otherwise directed by the Judge, such notice shall
be given by advertisement in such newspapers as the Judge shall direct and by
sending by prepaid letter post under certificate of posting a notice to every
person whose name appears in the list of creditors as on such date. The
advertisement shall be in Form No. 137 and the notice to creditor in Form No.
138.
Form of
authority to pay dividend.
277.A person to whom dividend is payable may lodge
with the Official Liquidator an authority in writing to pay such dividend to
another person named therein. Such authority shall be in Form No. 139.
Transmission
of dividends by post.
278.Dividends and returns of capital may, at the
request and risk of the person to whom they are payable be transmitted to him
by registered post or by money order as may be appropriate.
Form of
order directing return of capital.
279.Every order by which the Official Liquidator
is authorised to make a return to contributories of the company, shall, unless
the Court otherwise directs, contain or have appended thereto a schedule or
list (which the Official Liquidator shall prepare) setting out in a tabular form
the full names and addresses of the persons to whom the return is to be paid,
and the amount of money payable to each person, and particulars of the
transfers of shares (if any) which have been made or the variations in the list
of contributories which have arisen since the date of the settlement of the
list of contributories and such other information as may be necessary to enable
the return to be made. The schedule or list shall be in Form No. 140 with such
variations as circumstances shall require and the Official Liquidator shall
send a notice of return to each contributory by ordinary post under certificate
of posting in Form No. 141.
Payment
of dividend or return of capital due to a deceased creditor or contributory.
280.Where a claim made in respect of a dividend
due to a deceased creditor or a return of capital due to a deceased
contributory is Rs. 500 or less, the Official Liquidator may, upon satisfying
himself as to the claimant’s right and title to receive the dividend or the
return as the case may be, apply to the Court for sanctioning the payment of
such dividend or return to the claimant without the production of a succession
certificate or like authority. Where the Court sanctions the payment, the
Official Liquidator shall make the payment upon obtaining a personal indemnity
from the payee.
Official
Liquidator to apply for dissolution.
281.As soon as the affairs of the company have
been fully wound-up, the Official Liquidator in a winding-up by the Court shall
file his final account into Court and apply for orders as to the dissolution of
the company subject to his final account being passed in accordance with these
Rules. The application shall not be set down for hearing until the completion
of the audit of the final account and the filing of the auditor’s certificate
in relation thereto.
282.Upon the hearing of the application, the Court
may, after hearing the Official Liquidator and any other person to whom notice
may have been ordered by the Court, and upon perusing the account as audited,
make such orders as it may think fit as to the dissolution of the company, the
application, subject to the provisions of the Act, of the balance in the hands
of the Official Liquidator or the payment thereof into the Companies
Liquidation Account in the public account of India in the Reserve Bank of
India, and the disposal of the books and papers of the company and of the
Liquidator.
Liquidator
to pay the balance into public account.
283.Upon an order for dissolution being made, the
Official Liquidator shall forthwith pay into the Companies Liquidation Account
in the public account of India in the Reserve Bank of India any unclaimed
dividends payable to creditors, or undistributed assets refundable to contributories
in his hands on the date of the order of dissolution, and such other balance in
his hands as he has been directed by the Court to deposit into the Companies
Liquidation Account in the Reserve Bank of India. Every order of dissolution
shall direct that the Official Liquidator do forward a certified copy of the
order to the Registrar of Companies not later than 14 days from the date of the
order. Along with the copy of the order shall be filed with the Registrar of
Companies a statement signed by the Official Liquidator that the directions of
the Court regarding the application of the balance as per his final account
have been duly complied with.
284. The winding-up of a company shall, for
purposes of section 551, be deemed to be concluded—
(a) in the
case of a company wound-up by order of the Court, at the date on which the
order dissolving the company has been reported by the Liquidator to the
Registrar of Companies;
(b) in the case
of a company wound-up voluntarily, or under the supervision of the Court, at
the date of the dissolution of the company, unless at such date any fund or
assets of the company remain unclaimed or undistributed in the hands or under
the control of the liquidator, or any person who has acted as liquidator, in
which case the winding-up shall not be deemed to be concluded until such funds
or assets have either been distributed or paid into the Companies Liquidator
Account in the Reserve Bank of India.
Application
to declare dissolution void.
285.An application under section 559 shall be made
upon notice to the Central Government and the Registrar of Companies. Where the
Court declares the dissolution to have been void, the order shall direct that
the applicant do file a certified copy of the order with the Registrar of
Companies not later than 21 days from the date of the order.
Registers and books of account of
the official liquidator
Registers
and Books to be maintained by the Official Liquidator.
286. (1) The Official Liquidator shall maintain the
following Registers and Books :—
1. Register
of Liquidations in Form No. 142-A.
2. Central
Cash Book in Form No. 142-B.
3. Company’s
Cash Book in Form No. 142-C.
4. General
Ledger in Form No. 142-D.
5. Cashier’s
Cash Book in Form No. 142-E.
6. Bank
Ledger in Form No. 142-F.
7. Register
of Assets in Form No. 142-G.
8. Securities
& Investment Register in Form No. 142-H.
9. Register
of Book Debts & Outstandings in Form No. 142-I.
10. Tenants Ledger in
Form No. 142-J.
11. Suits Register in
Form No. 142-K.
12. Decree Register in
Form No. 142-L.
13. Sales Register in
Form No. 142-M.
14. Register of Claims
& Dividends in Form No. 142-N.
15. Contributories
Ledger in Form No. 142-O.
16. Dividends Paid
Register in Form No. 142-P.
17. Commission
Register in Form No. 142-Q.
18. Suspense Register
in Form No. 142-R.
19. Documents Register
in Form No. 142-S.
20. Books Register in
Form No. 142-T.
21. Register
of unclaimed dividends and undistributed assets, deposited into the companies
liquidation account in the Reserve Bank, in Form No. 142-U, and
22. A Record
Book for each company in which shall be entered all minutes of proceedings and
the resolutions passed at any meeting of the creditors or contributories or of
the Committee of Inspection, the substance of all orders passed by the Court in
the liquidation proceedings, and all such matters other than matters of account
as may be necessary to furnish a correct view of the administration of the company’s
affairs.
In
maintaining the registers and books mentioned above, the Official Liquidator
shall follow the instructions contained in the respective forms prescribed for
the said books and registers.
(2)The Official Liquidator shall, in addition
to the Registers and Books prescribed above, maintain such books as may be
necessary for the proper and efficient working of his office such as Petty Cash
Register, Correspondence Register, Despatch Register, Daily Register of Money
Orders and Cheques received, and so on, and shall also keep the necessary files
of correspondence and of proceedings in respect of each company under
liquidation in his charge.
(3)Where the accounts of the company are incomplete, the Official
Liquidator shall, with all convenient speed as soon as the order for winding-up
is made, have them completed and brought up to date.
(4)(i)Where the Official Liquidator is authorised to carry on
the business of the company, he shall keep separate books of account in respect
of such business and such books shall, as far as possible, be in conformity
with the books already kept by the company in the course of its business. The
Official Liquidator shall incorporate in the Central Cash Book and in the
Company’s Cash Book, the total weekly amounts of the receipts and payments on
such trading account.
(ii)The trading
account shall from time to time, not less than once in every month, be verified
by affidavit, and the Official Liquidator shall thereupon submit such account
to the Committee of Inspection (if any) or such member thereof as may be
appointed by the Committee for that purpose, who shall examine and certify the
same.
(5)The
Official Liquidator shall also keep a counterfoil Receipt Book in triplicate in
Form No. 143, the leaves of which shall be machine numbered serially, from
which shall be issued all receipts for payments made to the Official
Liquidator. The duplicate and the triplicate shall bear the same number as the
original.
(6)The
Official Liquidator shall keep proper vouchers for all payments made or
expenses incurred by him. The vouchers shall be serially numbered.
(7)In
respect of companies the winding-up of which was commenced under the Act prior
to the coming into force of these rules and is pending on the date these rules
come into force, the Official Liquidator shall, as soon as may be and not later
than 3 months after the coming into force of these rules or such extended time
as may be allowed by the Court, prepare and bring up to date the books and
registers prescribed under sub-rule (1) of this rule, provided that the Court
may if it thinks fit dispense with this requirement in any particular case.
Banking account of the official liquidator
All
moneys to be paid into the Reserve Bank.
287.The Official Liquidator shall pay into the
public account of India in the Reserve Bank of India (hereinafter referred to
as the Bank) to the credit of an account in his official name, all moneys
received by him as the Official Liquidator of any company, and the realisations
of each day shall be paid into the Bank without deduction not later than the
next working day of the Bank, provided that the remittance of moneys into the
Bank may be deferred until the realisations exceed Rs. 100. The money needed
for meeting expenses or for making payments in cash shall be drawn from the
Bank by cheques drawn upon the Bank by the Official Liquidator. All payments
out of the account by the Official Liquidator above Rs. 50 shall ordinarily be
made by cheques drawn against the said account.
(2) The Official Liquidator shall maintain a Bank
remittance challan book in counterfoil, the leaves of which shall be serially
numbered in which the acknowledgement of the Bank shall be obtained for all
moneys (whether in cash or cheque) deposited into the Bank to the credit of the
account mentioned in clause (1) above. The Form of the challan book shall be
settled by the Official Liquidator in consultation with the Bank.
Bills,
cheques and securities to be deposited into Bank.
288.All bills, cheques, hundies, notes and other
securities of a like nature payable to the company or to the Official
Liquidator thereof shall, as soon as they come into the hands of the Official
Liquidator, be deposited by him with the Bank for the purpose of being
presented for acceptance and payment or for payment only, as the case may be,
and the proceeds when realised shall be credited by the Bank to the account of
the Official Liquidator.
Payments
into Bank under section 471.
289.Where the Court makes an order directing any
person to pay any money due to the company into the public account of India in
the Reserve Bank of India instead of to the Official Liquidator, the person so
directed shall, at the time of making the payment, produce to the Bank a
certified copy of the order or a payment in challan endorsed by the Official
Liquidator under his signature. The money so paid shall be credited to the
Official Liquidator’s account with the Reserve Bank of
Official
Liquidator’s Dividend Account.
290.The Official Liquidator shall also open a
separate dividend account for each company under liquidation either in the
State Bank of India or its subsidiaries, or, with the sanction of the court, in
any other Scheduled Bank, as may be convenient, under the name ‘the Dividend
Account of..............(name of the company) in liquidation by its Official
Liquidator’, into which account he shall, upon a declaration of dividend being
made in the winding-up of any company, deposit by transfer from his account
with the Reserve Bank of India the total amount of the dividends payable upon
such declaration. There shall be a separate account in respect of each
declaration of dividend. All payments of dividend shall be made from the said
Official Liquidator’s dividend account and any unpaid balance in the account
shall be transferred back to the Official Liquidator’s account in the Reserve Bank
of
All payments of dividends above Rs. 50 shall
ordinarily be made by cheques drawn against the said account.
[Note : In
this rule, the word ‘dividend’ includes refund of capital to contributories.]
Fees to
be credited to Central Government.
291. In every winding-up where the Official Liquidator becomes or acts as
Liquidator, there shall be paid into the public account of India in the Reserve
Bank of India to the credit of the Central Government, from out of the assets
of the company in liquidation (or by the petitioner as provided in clause (1)
below), the fees determined in accordance with the following provisions :—
(1) Where the Official
Liquidator acts as Provisional Liquidator only,
Such fees as the Court may consider reasonable, to be paid
out of the assets of the company or by the petitioner as the Court may direct,
in respect of the services of the Official Liquidator as Provisional Liquidator.
(2) Where a
winding-up order is made and the Official Liquidator acts as liquidator of a
company,
(i) Upon the total assets, including produce of
calls on contributories, interest on investments, and rents from properties,
realised or brought to credit by the Official Liquidator, after deducting sums
on which fees are chargeable under clauses (3) and (4) below and the amount
spent out of the money received in carrying on the business of the company,
upon each year’s collections.
On the first Rs. 10,000 or fraction thereof |
3 per cent |
|
On the
next Rs. 40,000 or fraction thereof |
2 per cent |
|
On the
next Rs. 50,000 or fraction thereof |
1 per cent |
|
Above Rs.
1,00,000 |
3/4 per cent |
(ii) On the total amount distributed in dividend or
paid to contributories, preferential creditors, and debenture holders by the
Official Liquidator, half the above percentages.
Note: (a) In computing the collections of each
year, the year shall be taken as ending with the 31st day of March.
(b) The said fees shall include the Official
Liquidator’s services as provisional liquidator, and shall be subject to
clauses (8) & (9) hereunder.
(3) Where the Official Liquidator collects, calls or realises property for debenture holders,
The same scale of fees as under clause (2) to
be paid out of the proceeds of such calls or property.
(4) Where the Official Liquidator realises property for secured creditors other than debenture holders.
On the
amount realised for each secured creditor,
On the first Rs. 10,000 or fraction thereof |
4 per cent |
|
On the
next Rs. 40,000 or fraction thereof |
2½per cent |
|
On the
next Rs. 50,000 or fraction thereof |
2 per cent |
|
Above Rs.
1,00,000 |
1½ per cent |
(5) When the Official Liquidator acts as trustee, under a scheme of
arrangement,
Such fees not exceeding the scale of fees under clause (2)
above, as the court shall allow.
(6) When the Official Liquidator performs any special duties not
provided for above,
Such fees as the Court may fix on the application of the
Official Liquidator, in addition to any other fees payable.
(7) Where the Official Liquidator acts
as liquidator in a creditors’ voluntary winding-up,
Such fees as the Court may fix,
not exceeding the scale under clause (2) above.
(8) Where under section 527, the Court
appoints any persons who are already liquidators in a winding-up subject to the
supervision of the Court to be additional liquidators in a winding-up of the
Company by the Court, subject to the control of the Official Liquidator,
Such fees as may be fixed by the Court after
taking into consideration the remuneration payable to such additional
liquidators.
(9) Where the court has sanctioned the
reconstruction of the company under liquidation or a scheme of arrangement of
its affairs, or where for any reason the court is of the opinion that the fees
prescribed in paragraphs (2) and (3) above would be excessive, such reduction
may be made in the said fees as the Court thinks fit.
Where the
company has no available assets.
292.Where a company against which a winding-up
order has been made has no available assets, the Official Liquidator may, with
the leave of the court, incur any necessary expenses in connection with the
winding-up out of any permanent advance or other fund provided by the Central
Government, and the expenses so incurred shall be recouped out of the assets of
the company in priority to the debts of the company:
Provided that where any money has been advanced to the Official Liquidator by
the petitioning or other creditor or contributory for meeting any preliminary
expenses in connection with the winding-up, the Official Liquidator may incur
any necessary expenses out of such amount, and the money so advanced shall be paid
out of the assets of the company in priority to the debts of the company.
293.All such money for the time being standing to
the credit of the Official Liquidator at the Bank as is not immediately required
for the purposes of winding-up, shall be invested in Government securities or
in interest bearing deposits in the State Bank of India, or, with the previous
sanction of the court, in interest bearing deposits in any other Scheduled
Bank, in the name of the Official Liquidator as Official Liquidator of the
company to which the funds belong.
Official
Liquidator to examine the accounts for purposes of investment.
294.The Official Liquidator shall, at the end of
every three months, examine the account of each liquidation in his charge to
ascertain what moneys are available for investment, and shall make an entry at
the end of every three months in the Record Book relating to the company of his
having examined the account for the purpose and of the decision taken by him
regarding the investment, and in case he decides not to invest any surplus
funds, the reasons for such decision.
Investments
to be made by the Bank.
295.All investments shall be made by the Bank upon
the written request of the Official Liquidator. The securities shall be
retained in the Bank in the name and on behalf of the Official Liquidator and
shall not be sold except by the Bank and under the written instructions of the
Official Liquidator. When the securities are sold the proceeds shall be
credited by the Bank to the account of the Official Liquidator.
Note: In this rule, the word ‘Bank’ shall mean
the Reserve Bank of
Dividend
and interest to be credited.
296.All dividends and interest accruing from any
securities or investments shall from time to time be received by the Bank and
placed to the credit of the account of the Official Liquidator, and intimation
thereof shall be given to the Official Liquidator, who shall thereupon credit
such dividend or interest in his accounts to the company to which the security
or the investment relating thereto belongs.
297.The Official Liquidator shall claim such
refunds of income-tax as may be due in respect of any dividends or interest received
on the securities or investments and credit the same when realised to the
appropriate account.
Filing and audit of the official liquidator’s accounts
Half-yearly
accounts to be filed.
298.Unless otherwise ordered by the Court, the
Official Liquidator shall file his accounts into Court twice a year. Such
accounts shall be made up to the 31st of March and 30th of September every
year, the account for the period ending 31st March being filed not later than
the 30th of June following, and the account for the period ending 30th
September, not later than the 31st of December following:
Provided that the final account of the Official Liquidator shall be filed as
soon as the affairs of the company have been fully wound up, irrespective of
the periods prescribed above.
299.The account shall be a statement of receipts
and payments in Form No. 144, and shall be prepared in accordance with the
instructions contained therein. Three copies thereof shall be filed, and the
account shall be verified by an affidavit of the Official Liquidator in Form
No. 145. The final account shall be in Form No. 146.
300.Where the Official Liquidator has not during
the period of account received or paid any sum of money on account of the
assets of the company, he shall file an affidavit of no receipts or payments on
the date on which he shall have to file his accounts for the period.
Registrar
to send copy of account to the auditor.
301.As soon as the accounts are filed, the
Registrar shall forward to the auditor one copy thereof for purposes of audit
with a requisition in Form No. 147 requesting that the accounts may be audited
and a certificate of audit issued to the Court not later than 2 months from the
date of receipt of the copy of the account.
Audit of
the Official Liquidator’s accounts.
302.The accounts shall be audited by one or more
Chartered Accountants appointed by the Court or, if the Court so directs, by
the Examiner of Local Fund Accounts of the State concerned. The audit shall be
a complete check of the accounts of the Official Liquidator and of each of the
companies in liquidation in his charge. The Official Liquidator shall produce
before the auditor all his books and vouchers for the purposes of the audit,
and shall give the auditor all such explanations as may be required of him in
respect of the accounts.
Audit
certificate to be filed.
303.After the audit of each of the accounts of the
Official Liquidator filed in Court, the auditor shall forward to the Registrar
a certificate of audit relating to the account with his observations and
comments if any on the account, together with a copy thereof, and shall forward
another copy to the Official Liquidator. The Registrar shall file the original
certificate with the records and forward the copy to the Registrar of Companies
together with a copy of the account to which it relates.
304.(1) Audit
fees according to the following scale on the gross amount brought to credit,
including the produce of calls on contributories, interest on investments and
rents from properties, but after deducting (a) the amount spent out of the
money received in carrying on the business of the company and (b) the amounts
paid by the Official Liquidator to secured creditors (other than
debenture-holders), shall be paid to the auditor and debited to the account of
the liquidation to which the audit relates :—
|
On the
amount brought to credit including the produce of calls on contributories,
interest on investments and rents from properties, but after deducting (a)
the amount spent out of the money received in carrying on the business of the
company, and (b) amounts paid by the Official Liquidator to secured creditors
(other than debenture holders) |
..... ½ per cent |
|
On disbursements,
other than payments to secured creditors not being debenture holders |
..... ½ per cent |
(2) here the
audit is by the Examiner of Local Funds Accounts, audit fees calculated on the
above scale shall be paid into the public account of
Inspection
of the account and certificate of audit.
305.Any creditor or contributory shall be entitled
to inspect the accounts and the auditor’s certificate in the office of the
Court on payment of a fee of Re. 1, and to obtain a copy thereof on payment of
the prescribed charges.
Account
and auditor’s report to be placed before Judge.
306.Upon the audit of the account, the Registrar
shall place the statement of account and the auditor’s certificate before the
Judge for his consideration and orders.
Legal
assistance for the Official Liquidator.
307.The Official Liquidator shall, as far as
possible, personally appear and conduct all proceedings before the Court in the
liquidation, provided that the Official Liquidator may apply to the Court for
sanction to employ an advocate or advocates to assist him, and the Court may,
on such application, sanction such employment or pass such further or other
orders as it may think fit.
Employment
of additional or special staff.
308.Where the Official Liquidator is of opinion
that the employment of any special or additional staff is necessary in any
liquidation, he shall apply to the Court for sanction, and the Court may
sanction such staff as it thinks fit on such salaries and allowances as to the
Court may seem appropriate.
Apportionment
of expenses of common staff.
309.Where any staff is employed to attend to the
work of more than one liquidation, or any establishment or other charges are
incurred for more than one liquidation, the expenses incurred on such staff and
the common establishment and other charges, shall be apportioned by the
Official Liquidator between the several liquidations concerned in such
proportions as he may think fit, subject to the directions of the Judge, if
any.
Applications
under section 463(2) and section 545(3).
310.An application under section 463(2) to examine
on oath the Liquidator or any other person concerning the winding-up, and an
application under section 545(3) for an order conferring on any person
designated by the Central Government the powers of investigating the affairs of
the company concerned, shall be made ex parte and shall be supported by an
affidavit stating the circumstances in which the application is made.
Annual
statement by the Official Liquidator under section 551.
311.(1)The Official Liquidator shall file his
first annual statement under section 551(1) within one month after the expiry
of a year from the date of the commencement of the winding-up and thereafter
his subsequent statements at intervals of one year until the conclusion of the
winding-up. The annual statements to be filed by the Official Liquidator shall
be in Form No. 148.
(2) Upon the
filing of the statement, the Registrar shall obtain orders of the Judge fixing
a date for the consideration thereof and notify the date on the notice board of
the Court and to the Official Liquidator. The Official Liquidator shall attend
the consideration of the statement and shall give the Judge any explanation or
information with reference to the matters contained therein as the Judge may
require.
(3) Any
creditor or a contributory shall be entitled to inspect the statement on
payment of a fee of Re. 1 and to obtain a copy thereof on payment of the
prescribed charges.
Voluntary winding-up and winding-up subject to supervision
312.(1)Where an application is made to the Court
under the provisions of the Act in the voluntary winding-up of a company,
whether or not an order shall have been made that the voluntary winding-up
shall continue subject to the supervision of the Court, these Rules, so far as
may be, shall be applied to the subject matter and mode of such application.
(2) Save as
aforesaid, Rules which from their nature and subject matter, or by the
headlines above the group in which they are contained or by their terms are
made applicable only to proceedings in a winding-up by the Court or only to
such proceedings and to proceedings in a creditors’ voluntary winding-up, shall
not apply to proceedings in a voluntary winding-up, or, as the case may be, in
a members’ voluntary winding-up, whether any such voluntary winding-up is or is
not being continued under the supervision of the Court.
Declaration
of solvency in a members’ voluntary winding-up.
313.The declaration of solvency to be made by the
directors of a company under section 488(1) shall be in Form No. 149, with such
variations as the circumstances may require.
Statement
to be laid before meeting of creditors under section 495(1).
314.The statement of the assets and liabilities of
the company to be laid before a meeting of creditors by a liquidator in a members’
voluntary winding-up under section 495(1) shall be in Form No. 150 with such
variations as may be necessary.
Liquidator in voluntary winding-up
Notice of
appointment of liquidator.
315.The notice of his appointment which every
liquidator is required to publish in the Official Gazette under section 516
shall be in Form No. 151 and the notice of the appointment to be delivered to
the Registrar of Companies shall be in Form No. 152.
Order for
winding-up subject to supervision.
316.Upon an order being made for winding-up of a
company subject to the supervision of the Court, the liquidator of the company
shall, within 21 days from the date of the order, advertise the order in one
issue of the Official Gazette of the State or Union Territory concerned, and in
one issue of a newspaper in the English language or a newspaper in the regional
language circulating in the State or Union Territory concerned, as the Court
may direct, and also within the said period file a certified copy of the order
with the Registrar of Companies.
Security
by liquidator appointed by Court.
317.(1)Unless otherwise ordered, every liquidator
appointed by the Court in a voluntary winding-up, other than the Official
Liquidator, shall, before entering upon his duties as liquidator, furnish
security in such sum and in such manner as the Court may direct, for the due
discharge of his duties as liquidator. The cost of furnishing the required
security, including any premiums which he may pay to a Guarantee Society, shall
be borne by the liquidator personally, and shall not be charged against the
assets of the company as an expense incurred in the winding-up.
(2) If it shall appear at any time to the Court
that the security furnished by the liquidator is inadequate, the Court may
require the liquidator to furnish additional security. Where the security
furnished is excessive, the liquidator may apply to the Court for reducing the
amount of security, and the Court may make such order thereon as it thinks fit.
Limit of
remuneration of liquidator.
318.A liquidator shall not, under any
circumstances whatever, make any arrangement for, or accept from any advocate,
auctioneer or any other person connected with the company of which he is the
liquidator, or employed in or in connection with the winding-up of the company,
any gift, remuneration, or pecuniary or other benefit whatever beyond the
remuneration to which under the Act and the Rules he is entitled as liquidator,
nor shall he make any arrangement for giving up, or give up any part of such
remuneration to any such person.
Restriction
on purchase of goods by liquidator.
319.Where the liquidator carries on the business
of the company, he shall not, without the express sanction of the Court,
purchase goods for the carrying on of such business from any person whose
connection with him is of such a nature as would result in his obtaining
directly or indirectly any benefit out of the transaction. Where the liquidator
applies for sanction, he shall disclose in his application the nature of his
interest in the transaction, and the cost of obtaining sanction of Court shall
be borne by the liquidator personally.
Office of
liquidator vacated by his insolvency.
320.A liquidator against whom an order of
adjudication is made shall thereby vacate his office, and for the purposes of
the application of the Act and the Rules, he shall be deemed to have been
removed.
321.(1) In a members’ voluntary winding-up, a
liquidator who desires to resign his office shall summon a meeting of the
company and submit his resignation to it.
(2) In a creditors’ voluntary winding-up, a
liquidator who desires to resign his office shall summon separate meetings of
the creditors and contributories of the company to decide whether or not his
resignation shall be accepted. If the creditors and contributories by ordinary
resolution both agree to accept the resignation of the liquidator, the
resignation shall take effect. In any other case, the liquidator shall report
to the Court the result of the meetings and apply for appropriate orders of the
Court and the Court may, upon such application, determine whether or not the
resignation of the liquidator shall be accepted, and may give such directions
and make such orders as it considers necessary.
(3) The liquidator shall, along with his
resignation, submit an account of his acts and dealings as liquidator and a
statement as to the position of the liquidation, in a form in all respects
similar to the statement prescribed under these Rules under section 551(1),
commencing from the date when the last previous statement if any under the said
section terminated, or from the date of his appointment as liquidator,
whichever is later, and brought down to the date of his resignation.
(4) The expenses of summoning a meeting of the company
under sub-rule (1) of this rule, or of the meetings of creditors and
contributories under sub-rule (2) and of the application to be made to the
Court under sub-rule (2), shall be part of the expenses of the liquidation.
Duty of
liquidator upon resignation.
322.Upon a liquidator resigning or being released
or removed from his office, he shall deliver over to the new liquidator all
books kept by him, and all other books, documents, papers and accounts in his
possession relating to the company or to the office of the liquidator.
Books to
be kept by the liquidator.
323.(1) The liquidator shall keep proper books of
account showing all receipts and payments made by him in the course of the
liquidation.
(2) In a creditors’ voluntary winding-up, he shall
keep such books as the Committee of Inspection, or if there is no such
Committee, as the creditors, direct, and submit all the books and accounts and
documents and papers in his possession relating to his office as liquidator or
to the company, to the Committee of Inspection, or if there is none, to the
creditors whenever required by the Committee or creditors as the case may be.
(3) In addition to the books of account, the
liquidator shall keep a record book in which shall be entered all minutes of
proceedings and the resolutions passed at any meeting of the creditors or
contributories or of the Committee of Inspection, particulars of all his
transactions and negotiations in relation to the winding-up and all such
matters other than matters of account as may be necessary to furnish a correct
view of the administration of the company’s affairs. He shall also keep a book
showing the dates at which all notices to creditors and shareholders were sent
out and posted. The person who despatched the notices shall initial the entries
in the book relating thereto.
(4) The accounts of the liquidator shall be open
to the inspection of every creditor or contributory during office hours upon
payment of a fee of Re. 1 for every hour of inspection or part thereof.
Banking
account of the liquidator.
|
324. The liquidator
shall open a special account of the liquidation called the “Liquidation
Account of.................................................... |
Company Ltd.” |
|
|
Company Private Ltd.” |
|
|
Company.” |
in a Scheduled Bank, or, with the previous
sanction of the Court, in any other Bank, as provided in section 553(1), into
which he shall pay all moneys received by him as liquidator, and the
realisations of each day shall be paid into the said account without deduction
not later than the next working day of the Bank, provided that the remittance
of moneys into the Bank may be deferred until the realisations exceed Rs. 100.
The money needed for meeting the expenses of liquidation or for making any
payments by the liquidator in cash shall be drawn from the Bank by cheques
drawn upon the Bank by the liquidator. All payments by the liquidator above Rs.
50 shall ordinarily be made by cheque.
Unless the contrary appears, all references in
these Rules to the Bank in a voluntary winding-up shall mean references to the
Bank in which an account has been opened as aforesaid.
Bills,
cheques and securities to be deposited in Bank.
325.All bills, cheques, hundies, notes and other
securities of a like nature payable to the company or to the liquidator thereof
shall, as soon as they come into the hands of the liquidator be deposited by
him with the Bank for the purpose of being presented for acceptance and payment
or for payment only as the case may be, and the proceeds when realised shall be
credited by the Bank to the account of the liquidator.
326.(1) All such moneys for the time being
standing to the credit of the liquidation account as is not immediately required
for the purposes of the winding-up, shall be invested by the liquidator in
Government or trust securities or in interest bearing deposits in a Scheduled
Bank.
(2) Rules 294 to 297 of these Rules relating to
investments shall apply mutatis mutandis to investments made by the liquidator
in every voluntary winding-up.
Liquidator’s
statements under section 551.
327.In a voluntary winding-up or a winding-up
under the supervision of the Court, the statements required to be filed under
section 551 with respect to the proceedings in and position of the liquidation
of a company the winding-up of which is not concluded within a year after its
commencement, shall be filed with the Registrar of Companies twice in every
year as follows :—
(1) The first statement, commencing from the date
when a liquidator was first appointed and brought down to the end of twelve
months from the commencement of the winding-up, shall be filed within one month
from the expiration of such twelve months, and subsequent statements shall be filed
at intervals of half a year, each statement being brought down to the end of
the half year for which it is filed. Where the winding-up is concluded before
the expiration of a half-yearly interval, the final statement of account
brought down to the close of the winding-up shall be filed forthwith.
(2) Where the time for filing the statement has
expired, the Court may on application extend the time, and unless the Court
otherwise orders, the costs of such application shall be borne by the
liquidator personally.
(3) The statement shall be in Form No. 153 (with
such variations as may be necessary in the case of the final account), and
shall be prepared in accordance with the instructions contained in the Form,
and verified by an affidavit in Form No. 154.
(4) Where the liquidator has not, during any
period for which the statement has to be filed, received or paid any money on
account of the company, he shall, at the period when he is required to file his
statement, file with the Registrar of Companies the prescribed statement in the
above Form No. 153, in duplicate, containing the particulars therein required
with respect to the proceedings in and the position of the liquidation,
together with an affidavit of no receipts or payments.
(5) Every statement shall be filed in duplicate
with the Registrar of Companies, and, in a winding-up under the supervision of
the Court, a copy of the statement shall also be filed in the Court, within the
time prescribed in clause (1) above.
Annual
statement under sections 496(1)(b) and 508(1)(b).
328.The statement to be laid, in the case of
members voluntary winding-up, before a general meeting of the company under
section 496(1)(b), and, in the case of a creditors’ voluntary winding-up,
before a general meeting of the company and a meeting of the creditors under
section 508(1)(b), shall be prepared in the same form as the Liquidator’s
statements under section 551.
Notice
convening final meeting and the account to be laid before the meeting.
329.The notice convening the final meeting of the
company in a members’ voluntary winding-up, or the final meetings of the
company and the creditors in a creditors’ voluntary winding-up, shall be in
Form No. 155. The account of the winding-up to be laid by the liquidator before
the said meeting or meetings shall be in Form No. 156. In a winding-up subject
to supervision of the Court, a copy of the account shall also be filed in the
Court.
Consideration
by Court of the statements under section 551 and the final account, in a
winding-up subject to the supervision of the Court.
330.In a winding-up subject to the supervision of
the Court, upon the filing into Court of each of the statements under section
551(1) referred to in rule 327 or of the account referred to in the last
preceding rule, the Registrar shall obtain orders of the Judge fixing a date
for the consideration thereof by the Judge, and notify the date on the notice
board of the Court and to the liquidator. The liquidator shall attend the
consideration of the statement or of the final account, as the case may be, and
shall give the Judge such further explanation or information with reference to
the matters contained therein as the Judge may require.
Returns
to Registrar of Companies.
331.The returns to be made to the Registrar of
Companies under sub-sections (3) and (4) of sections 497 and 509 shall be in
Form Nos. 157 and 158 respectively.
Inspection
by creditor or contributory of statements filed by liquidator.
332.Any creditor or contributory of a company
which is being wound-up, shall be entitled to inspect any of the statements
filed under sections 496, 497, 508, 509 and 551 on payment of a fee of Re. 1
each, and to obtain a copy thereof or extract therefrom on payment of the
prescribed charges.
Audit of
the liquidator’s accounts.
333.The company in general meeting in a members’
voluntary winding-up, and the creditors in a creditors’ voluntary winding-up,
may, if and when they think fit, appoint an auditor to audit the accounts of
the liquidator, and shall fix the fees to be paid to such auditor.
Applications
under section 518.
334.(1) An application under section 518 shall be
made by a Judge’s summons, and notice of the application shall be given to the
liquidator where he is not the applicant, to the respondents if any named in
the application, and to such other persons and in such manner as the Court may
direct.
(2) Where an order is made under section 518
staying the proceedings in the winding-up, the order shall direct that the
applicant at whose instance the order for stay was made shall, within 10 days
of the making of the order, file a certified copy thereof with the Registrar of
Companies.
Statement
to accompany payment.
335.(1) The statement to be furnished, under
section 555(3) to the Officer appointed by the Central Government, by the
Official Liquidator in a winding-up, by the Court and by a Liquidator in a
voluntary winding-up, when making any payment of unclaimed dividends or
undistributed assets into the Companies Liquidation Account in the Reserve Bank
of India under section 555(1) and (2), shall be in Form No. 159.
(2) The Liquidator shall, whenever called upon by
the Central Government to do so, certify whether a person claiming payment from
the Companies Liquidation Account under section 555(7) is or is not entitled to
the whole or any part of the amount claimed.
Unclaimed
dividends or undistributed assets under investment.
336.For purposes of payment of unclaimed dividends
and undistributed assets into the Companies Liquidation Account, money invested
or deposited at interest by the liquidator shall be deemed to be money in his
hands, and when such money forms part of the unclaimed dividends or
undistributed assets of the company, the liquidator shall realise the
investment or withdraw the deposit and shall pay the proceeds into the
Companies Liquidation Account.
Application
by person for payment of money paid into the Companies Liquidation Account.
337.An application under sub-section (7)(a) of
section 555 by any person claiming to be entitled to any money paid into the
Companies Liquidation Account for payment of such money shall state whether the
applicant had made an application to the Central Government for the payment,
and if so, the result of the application.
Costs and
expenses payable out of the assets in a winding-up by the Court.
338.(1)The assets of a
company in a winding-up by the Court remaining after payment of the fees and
expenses properly incurred in preserving, realising or getting in the assets
including, where the company has previously commenced to be wound-up
voluntarily, such remuneration, costs and expenses as the Court may allow to
the liquidator in such voluntary winding-up, shall, subject to any order of the
Court and to the rights of secured creditors, if any, be liable to the
following payments which shall be made in the following order of priority,
namely—
|
First— |
the taxed costs of the
petition, including the taxed costs of any person appearing on the petition
whose costs are allowed by the Court; |
|
Next— |
the costs and
expenses of any person who makes, or concurs in making, the company’s
statement of affairs; |
|
Next— |
the necessary
disbursements of the Official Liquidator other than expenses properly
incurred in preserving, realising or getting in the properties of the
company; |
|
Next— |
the cost of any
person properly employed by the Official Liquidator; |
|
Next— |
the fees to be
credited to Government under section 451(2); |
|
Next— |
the actual out of
pocket expenses necessarily incurred by the members of the Committee of
Inspection, and sanctioned by the Court. |
(2) Save as otherwise ordered by the Court, no payments in respect of
bills of advocates, shall be allowed out of the assets of the company without
proof that the same have been considered and allowed by the taxing officer of
the Court. The Taxing Officer shall, before passing the bills or charges of an
advocate satisfy himself that the appointment of an advocate to assist the
liquidator in the performance of his duties has been duly sanctioned.
(3) Nothing contained in this rule shall apply to or
affect costs which, in the course of legal proceedings by or against the
company which is being wound-up by the Court, are ordered by the Court in which
such proceedings are pending, to be paid by the company or the liquidator, or
the rights of the person to whom such costs are payable.
Part IV—Costs and taxation of costs
Taxation of costs in
339.Notwithstanding anything contained in these rules, costs of all
proceedings under the Act or these Rules in the High Courts of Bombay,
Registrar to be Taxing Officer.
340. The Registrar shall
be the Taxing Officer of the Court for the purpose of these rules.
Costs in the discretion of the
Court.
341.(1)Costs shall be in the discretion of the Court and no costs of, or
incidental to, a proceeding shall be allowed between party and party, unless
the same are expressly awarded by an order of the Court.
(2) The
Court may, in any proceeding where costs are awarded to a party, direct payment
of a sum in gross in lieu of taxed costs.
Costs to be taxed in accordance
with the practice and procedure of the Court.
342.Save as provided by these rules, the costs shall be taxed in accordance
with the practice and procedure of the Court relating to taxation in its other
proceedings.
All proper charges to be
allowed.
343.The Taxing Officer shall allow all such costs, charges and expenses as
appear to have been necessary and proper and shall not allow any costs, charges
or expenses which appear to him to have been incurred or increased
unnecessarily or through negligence or mistake.
344.Every bill of costs shall be properly dated throughout, and shall show
in separate columns professional charges and out of pocket expenses. The bill
shall be signed by the advocate of the party on whose behalf it is presented,
or where, the party has appeared in person in the proceeding to which the bill
relates, by the party or his duly authorised agent.
345.Every bill of costs shall, wherever possible, be accompanied by
vouchers, and every item of disbursement and the nature thereof shall be
distinctly specified, and no payment out of pocket shall ordinarily be allowed
except on production of the necessary voucher, and, in the case of advocate’s
fees in a taxation between party and party, without a certificate signed by the
advocate that the fee has been paid:
Provided that in the
case of an advocate appearing for the Government or for the Official
Liquidator, the fee may be allowed without the production of a certificate that
the fee has been paid.
346.(1)Within four weeks from the date of the order awarding costs to any
party, or within such further time as the Court may allow, the party to whom
costs have been awarded shall lodge the bill of costs and vouchers with the Taxing
Officer, and shall serve a copy of the bill on the party liable to pay the
costs and file proof of such service with the Taxing Officer. The Taxing
Officer shall fix a date for taxation of the bill and notify the parties of the
date fixed.
(2) bill of costs presented out of time shall
be returned to the party and the Taxing Officer shall not receive or tax the
bill without an order of the Court.
Bill of costs by advocate or
other person employed by Official Liquidator.
347.Every advocate, accountant, auctioneer or other person employed by the
Official Liquidator in a winding-up by the Court, shall, on request by the
Official Liquidator (to be made in sufficient time before the declaration of a
dividend) deliver his bill of costs or charges to the Official Liquidator, and
if he fails to do so within 4 weeks of the receipt of the request or such
extended time as the Court may allow, the Official Liquidator shall declare and
distribute the dividend without regard to such person’s claim, and the claim
shall be forfeited : provided that the Court may, at any time before the
declaration of the final dividend, for good cause shown, restore the claim and
order the bill to be received without prejudice to the distribution of
dividends declared prior to the making of the order. The request by the
Official Liquidator shall be in Form No. 160, and shall be served personally or
by registered post.
348.Save as otherwise provided by these rules or by an order of the Court,
the Taxing Officer shall allow on taxation fees to advocates not exceeding the
scales set out in Appendix III hereof, having regard to the nature and
complexity of the case.
Fees in misfeasance proceedings.
349.In a proceeding against the promoters or officers of a company under
section 542 or 543, the fees to advocates shall, subject to any order of the
Court and to rule 351 hereunder, be allowed on the same scale as if the
proceeding were a suit for the amount claimed in such proceeding, and the
scales of fees relating to suits in the Courts concerned shall be applied to
such proceedings.
Fees when proceeding is
compromised.
350.Where a proceeding is compromised prior to its being set down for
hearing, the fees to be allowed to advocates between party and party shall be
not more than half the amounts specified in Appendix III.
Fees to more than one advocate.
351.The Taxing Officer shall not allow a fee for more than one advocate for
the same party unless the Court has certified for more than one advocate. Where
such a certificate is given, the fee for the second advocate shall be allowed
at three-fifths of the fee prescribed in Appendix III.
Costs of parties having common
interest.
352.(1)Where two or more petitions or applications raise a common issue and
are heard together and decided by a common judgment, unless the Court otherwise
orders, only one set of costs shall be allowed to all the parties together in
the said petitions or applications who have a common interest.
(2) Where
different parties in the same proceeding have a common interest, only one set
of fees shall be allowed to all of them together, though they may be
represented by different advocates, unless the Court otherwise orders.
353(1) Nothing in these rules shall be deemed to prevent the Court from
fixing a fee for any matter not provided for in these rules, or from fixing a
higher or a lesser fee than the fees prescribed in Appendix III, if in any
particular case the Court considers it necessary to do so in the interests of
justice.
(2) In
any case where the contest has not been of a substantial nature, the Court may
direct that the costs shall be on the uncontested scale.
Reference to Judge in Chambers.
354.Where any question arises in taxation on which the Taxing Officer
considers it necessary to obtain the directions of the Court, he may refer the
matter to the Judge in Chambers for necessary directions, and the taxation
shall proceed in accordance with such directions.
355.The allowances to be made to witnesses shall be on the same scales as
are in force in the Court in respect of its other proceedings.
Taxation between advocate and
client.
356.(1) Where a dispute arises between an advocate and his client as to the
fees and charges payable to the advocate, either party may apply to the Judge
in Chambers for an order to have the bill taxed, and on an order for taxation
being made, the Taxing Officer may proceed to tax the bill. The application
when made by the advocate shall be accompanied by a copy of the bill to be
taxed:
Provided that where
the client has expressed his consent in writing to the taxation of costs
between himself and his advocate in any proceeding, the advocate may present
the bill of costs in such proceeding for taxation without an order of the Judge
and the Taxing Officer shall thereupon proceed to tax the bill.
(2) In
every case of taxation between advocate and client, the client shall be duly
summoned by the Taxing Officer to attend the taxation, and the summons shall be
served not less than 14 days prior to the date fixed for taxation.
(3) Subject
to any agreement in writing to the contrary, the rules regulating the taxation
of costs between party and party shall be applicable, as far as may be, to
taxation between advocate and client:
Provided that all such
charges and expenses as in the opinion of the Taxing Officer were necessary or
proper or were incurred at the instance of the client, shall be allowed.
(4) No
agreement between the advocate and his client to pay fees higher than those
prescribed in Appendix III shall be recognised unless the same has been
recorded in writing and is signed by the client and has been filed along with
the appearance of the advocate in the case.
(5) Where
the Taxing Officer is of opinion that any such agreement as aforesaid is unfair
or unreasonable he may refer the matter to the Judge who may thereupon make such
order as he thinks just, and the taxation shall proceed in accordance with such
order.
(6) This
rule shall not apply to a taxation of a bill of costs as between an advocate
employed by the Official Liquidator and the Official Liquidator, which shall be
taxed, subject to any order of the Court, according to the rules regulating
taxation of the costs between party and party.
357.(1) Any party who is dissatisfied with the allowance or disallowance by
the Taxing Officer of all or any of the items in the Bill of Costs may, within
10 days of the passing of the Bill on taxation, apply to the Taxing Officer to
review his decision in respect thereof.
(2) An
application for review shall be made by a summons returnable before the Taxing
Officer, and shall be accompanied by a statement of objections specifying the
items or parts of the Bill with respect to which the review is sought and the
grounds of objection. The summons together with a copy of the statement shall
be served on the opposite party not less than four clear days before the date
fixed for hearing the review.
(3) Upon
an application to review his order, the Taxing Officer shall reconsider the
taxation and may, where he thinks fit, receive further evidence in respect
thereof, and shall state in a certificate the grounds of his decision on such
review.
358.(1)Any party dissatisfied with the decision of the Taxing Officer on
review may, not later than seven days from the date of the decision, or such
further time as the Judge may allow, appeal to the Judge in Chambers against
the decision of the Taxing Officer. The appeal shall be made by a Judge’s
summons and shall be accompanied by a memorandum setting out the grounds of
appeal. The summons together with a copy of the memorandum shall be served on
the opposite party not less than four clear days before the date fixed for the
hearing. On such appeal, the Judge may pass such orders as may seem just.
(2)Subject to the orders of the Court on such
appeal, if any, the decision of the Taxing Officer shall be final.
359.Upon the Bill of Costs being taxed and subject to the orders of the
Judge on appeal, if any, the Taxing Officer shall issue a certificate of
taxation showing the amount as taxed.
360(1)Every duly authorised officer of the Central Government, and, save as
otherwise provided by these Rules, every person who has been a director or
officer of a company which is being wound-up, shall be entitled, free of
charge, at all reasonable times to inspect the file of proceedings of the
liquidation and to take copies or extracts from any document therein, and on
payment of the prescribed charges, to be furnished with such copies or
extracts.
(2) Save
as otherwise provided by these rules, every contributory and every creditor
whose claim or proof has been admitted, shall be entitled, on payment of the
prescribed charges, at all reasonable times to inspect the file of proceedings
and to be furnished with copies and extracts from any document therein.
Saving of rules under Special
Acts.
361.Nothing in these rules shall affect the
operation of any rules framed under the Banking Companies Act, 1949, or the
Insurance Act, 1938, or other Special Acts relating to any class of companies,
and these rules shall apply to such companies subject to the rules, if any,
made under the said Special Acts.