VOLUNTARY WINDING UP AS PER COMPANIES ACT 1956

SEC 490 - POWER OF COMPANY TO APPOINT AND FIX REMUNERATION OF LIQUIDATORS.

• (1) THE COMPANY IN GENERAL MEETING SHALL -
• (A) APPOINT ONE OR MORE LIQUIDATORS FOR THE PURPOSE OF WINDING UP THE AFFAIRS AND DISTRIBUTING THE ASSETS OF THE COMPANY ; AND
• (B) FIX THE REMUNERATION, IF ANY, TO BE PAID TO THE LIQUIDATOR OR LIQUIDATORS.
• (2) ANY REMUNERATION, SO FIXED SHALL NOT BE INCREASED IN ANY CIRCUMSTANCES WHATEVER, WHETHER WITH OR WITHOUT THE SANCTION OF THE COURT.
• (3) BEFORE THE REMUNERATION OF THE LIQUIDATOR OR LIQUIDATORS IS FIXED AS AFORESAID, THE LIQUIDATOR, OR ANY OF THE LIQUIDATORS, AS THE CASE MAY BE, SHALL NOT TAKE CHARGE OF HIS OFFICE.�

SEC 491- BOARD'S POWERS TO CEASE ON APPOINTMENT OF A LIQUIDATOR.

• ON THE APPOINTMENT OF A LIQUIDATOR, ALL THE POWERS OF THE BOARD OF DIRECTORS AND OF THE MANAGING OR WHOLE-TIME DIRECTORS AND MANAGER, IF THERE BE ANY OF THESE, SHALL CEASE, EXCEPT FOR THE PURPOSE OF GIVING NOTICE OF SUCH APPOINTMENT TO THE REGISTRAR IN PURSUANCE OF SECTION 493 OR IN SO FAR AS THE COMPANY IN GENERAL MEETING OR THE LIQUIDATOR MAY SANCTION THE CONTINUANCE THEREOF.

SEC 492 - POWER TO FILL VACANCY IN OFFICE OF LIQUIDATOR.

• (1) IF A VACANCY OCCURS BY DEATH, RESIGNATION OR OTHERWISE IN THE OFFICE OF ANY LIQUIDATOR APPOINTED BY THE COMPANY, THE COMPANY IN GENERAL MEETING MAY, SUBJECT TO ANY ARRANGEMENT WITH ITS CREDITORS, FILL THE VACANCY.
• (2) FOR THAT PURPOSE, A GENERAL MEETING MAY BE CONVENED BY ANY CONTRIBUTORY, OR BY THE CONTINUING LIQUIDATOR OR LIQUIDATORS, IF ANY.
• (3) THE MEETING SHALL BE HELD IN THE MANNER PROVIDED BY THIS ACT OR BY THE ARTICLES, OR IN SUCH OTHER MANNER AS THE COURT MAY, ON APPLICATION BY ANY CONTRIBUTORY OR BY THE CONTINUING LIQUIDATOR OR LIQUIDATORS, DETERMINE.

SEC 493 - NOTICE OF APPOINTMENT OF LIQUIDATOR TO BE GIVEN TO REGISTRAR.

• (1) THE COMPANY SHALL GIVE NOTICE TO THE REGISTRAR OF THE APPOINTMENT OF A LIQUIDATOR OR LIQUIDATORS MADE BY IT UNDER SECTION 490, OF EVERY VACANCY OCCURRING IN THE OFFICE OF LIQUIDATOR, AND OF THE NAME OF THE LIQUIDATOR OR LIQUIDATORS APPOINTED TO FILL EVERY SUCH VACANCY UNDER SECTION 492.
• (2) THE NOTICE AFORESAID SHALL BE GIVEN BY THE COMPANY WITHIN TEN DAYS OF THE EVENT TO WHICH IT RELATES.
• (3) IF DEFAULT IS MADE IN COMPLYING WITH SUB-SECTION (1) OR (2), THE COMPANY, AND EVERY OFFICER OF THE COMPANY (INCLUDING EVERY LIQUIDATOR OR CONTINUING LIQUIDATOR) WHO IS IN DEFAULT, SHALL BE PUNISHABLE WITH FINE WHICH MAY EXTEND TO ONE THOUSAND RUPEES FOR EVERY DAY DURING WHICH THE DEFAULT CONTINUES.

SEC 494 - POWER OF LIQUIDATOR TO ACCEPT SHARES, ETC. AS CONSIDERATION FOR SALE OF PROPERTY OF COMPANY.

• (1) WHERE
• (A) A COMPANY (IN THIS SECTION CALLED " THE TRANSFEROR COMPANY ") IS PROPOSED TO BE, OR IS IN COURSE OF BEING, WOUND UP ALTOGETHER VOLUNTARILY ; AND
• (B) THE WHOLE OR ANY PART OF ITS BUSINESS OR PROPERTY IS PROPOSED TO BE TRANSFERRED OR SOLD TO ANOTHER COMPANY, WHETHER A COMPANY WITHIN THE MEANING OF THIS ACT OR NOT (IN THIS SECTION CALLED " THE TRANSFEREE COMPANY ") ;
• THE LIQUIDATOR OF THE TRANSFEROR COMPANY MAY, WITH THE SANCTION OF A SPECIAL RESOLUTION OF THAT COMPANY CONFERRING ON THE LIQUIDATOR EITHER A GENERAL AUTHORITY OR AN AUTHORITY IN RESPECT OF ANY PARTICULAR ARRANGEMENT,

• (I) RECEIVE, BY WAY OF COMPENSATION OR PART COMPENSATION FOR THE TRANSFER OR SALE, SHARES, POLICIES, OR OTHER LIKE INTEREST IN THE TRANSFEREE COMPANY, FOR DISTRIBUTION AMONG THE MEMBERS OF THE TRANSFEROR COMPANY ; OR
• (II) ENTER INTO ANY OTHER ARRANGEMENT WHEREBY THE MEMBERS OF THE TRANSFEROR COMPANY MAY, IN LIEU OF RECEIVING CASH, SHARES, POLICIES, OR OTHER LIKE INTERESTS OR IN ADDITION THERETO, PARTICIPATE IN THE PROFITS OF, OR RECEIVE ANY OTHER BENEFIT FROM, THE TRANSFEREE COMPANY.
• (2) ANY SALE OR ARRANGEMENT IN PURSUANCE OF THIS SECTION SHALL BE BINDING ON THE MEMBERS OF THE TRANSFEROR COMPANY.
• (3) IF ANY MEMBER OF THE TRANSFEROR COMPANY WHO DID NOT VOTE IN FAVOR OF THE SPECIAL RESOLUTION EXPRESSES HIS DISSENT THERE FROM IN WRITING ADDRESSED TO THE LIQUIDATOR, AND LEFT AT THE REGISTERED OFFICE OF THE COMPANY WITHIN SEVEN DAYS AFTER THE PASSING OF THE RESOLUTION, HE MAY REQUIRE THE LIQUIDATOR EITHER

• (A) TO ABSTAIN FROM CARRYING THE RESOLUTION INTO EFFECT ; OR
• (B) TO PURCHASE HIS INTEREST AT A PRICE TO BE DETERMINED BY AGREEMENT, OR BY ARBITRATION IN THE MANNER PROVIDED BY THIS SECTION.
• (4) IF THE LIQUIDATOR ELECTS TO PURCHASE THE MEMBER'S INTEREST, THE PURCHASE MONEY SHALL BE PAID BEFORE THE COMPANY IS DISSOLVED, AND BE RAISED BY THE LIQUIDATOR IN SUCH MANNER AS MAY BE DETERMINED BY SPECIAL RESOLUTION.
• (5) A SPECIAL RESOLUTION SHALL NOT BE INVALID FOR THE PURPOSES OF THIS SECTION BY REASON ONLY THAT IT IS PASSED BEFORE OR CONCURRENTLY WITH A RESOLUTION FOR VOLUNTARY WINDING UP OR FOR APPOINTING LIQUIDATORS; BUT IF AN ORDER IS MADE WITHIN A YEAR FOR WINDING UP THE COMPANY BY OR SUBJECT TO THE SUPERVISION OF THE COURT, THE SPECIAL RESOLUTION SHALL NOT BE VALID UNLESS IT IS SANCTIONED BY THE COURT.
• (6) THE PROVISIONS OF THE ARBITRATION ACT, 1940 (10 OF 1940), OTHER THAN THOSE RESTRICTING THE APPLICATION OF THAT ACT IN RESPECT OF THE SUBJECT MATTER OF THE ARBITRATION, SHALL APPLY TO ALL ARBITRATIONS IN PURSUANCE OF THIS SECTION.

SEC 495 - DUTY OF LIQUIDATOR TO CALL CREDITORS' MEETING IN CASE OF INSOLVENCY.

• (1) IF, IN THE CASE OF A WINDING UP COMMENCED AFTER THE COMMENCEMENT OF THIS ACT, THE LIQUIDATOR IS AT ANY TIME OF OPINION THAT THE COMPANY WILL NOT BE ABLE TO PAY ITS DEBTS IN FULL WITHIN THE PERIOD STATED IN THE DECLARATION UNDER SECTION 488, OR THAT PERIOD HAS EXPIRED WITHOUT THE DEBTS HAVING BEEN PAID IN FULL, HE SHALL FORTHWITH SUMMON A MEETING OF THE CREDITORS, AND SHALL LAY BEFORE THE MEETING A STATEMENT OF THE ASSETS AND LIABILITIES OF THE COMPANY.
• (2) IF THE LIQUIDATOR FAILS TO COMPLY WITH SUB-SECTION (1), HE SHALL BE PUNISHABLE WITH FINE WHICH MAY EXTEND TO FIVE THOUSAND RUPEES.

SEC 496 - DUTY OF LIQUIDATOR TO CALL GENERAL MEETING AT THE END OF EACH YEAR.

• (1) SUBJECT TO THE PROVISIONS OF SECTION 498, IN THE EVENT OF THE WINDING UP CONTINUING FOR MORE THAN ONE YEAR, THE LIQUIDATOR SHALL -
• (A) CALL A GENERAL MEETING OF THE COMPANY AT THE END OF THE FIRST YEAR FROM THE COMMENCEMENT OF THE WINDING UP, AND AT THE END OF EACH SUCCEEDING YEAR, OR AS SOON THEREAFTER AS MAY BE CONVENIENT WITHIN THREE MONTHS FROM THE END OF THE YEAR OR SUCH LONGER PERIOD AS THE CENTRAL GOVERNMENT MAY ALLOW ; AND
• (B) LAY BEFORE THE MEETING AN ACCOUNT OF HIS ACTS AND DEALINGS AND OF THE CONDUCT OF THE WINDING UP DURING THE PRECEDING YEAR, TOGETHER WITH A STATEMENT IN THE PRESCRIBED FORM AND CONTAINING THE PRESCRIBED PARTICULARS WITH RESPECT TO THE PROCEEDINGS IN, AND POSITION OF, THE LIQUIDATION.
• (2) IF THE LIQUIDATOR FAILS TO COMPLY WITH SUB-SECTION (1), HE SHALL BE PUNISHABLE, IN RESPECT OF EACH FAILURE, WITH FINE WHICH MAY EXTEND TO ONE THOUSAND RUPEES.

SEC 497 - FINAL MEETING AND DISSOLUTION.

• (1) SUBJECT TO THE PROVISIONS OF SECTION 498, AS SOON AS THE AFFAIRS OF THE COMPANY ARE FULLY WOUND UP, THE LIQUIDATOR SHALL
• (A) MAKE UP AN ACCOUNT OF THE WINDING UP, SHOWING HOW THE WINDING UP HAS BEEN CONDUCTED AND THE PROPERTY OF THE COMPANY HAS BEEN DISPOSED OF ; AND
• (B) CALL A GENERAL MEETING OF THE COMPANY FOR THE PURPOSE OF LAYING THE ACCOUNT BEFORE IT, AND GIVING ANY EXPLANATION THEREOF.
• (2) THE MEETING SHALL BE CALLED BY ADVERTISEMENT
• (A) SPECIFYING THE TIME, PLACE AND OBJECT OF THE MEETING ; AND
• (B) PUBLISHED NOT LESS THAN ONE MONTH BEFORE THE MEETING IN THE OFFICIAL GAZETTE, AND ALSO IN SOME NEWSPAPERS CIRCULATING IN THE DISTRICT WHERE THE REGISTERED OFFICE OF THE COMPANY IS SITUATED.

• (3) WITHIN ONE WEEK AFTER THE MEETING, THE LIQUIDATOR SHALL SEND TO THE REGISTRAR AND THE OFFICIAL LIQUIDATOR A COPY EACH OF THE ACCOUNT AND SHALL MAKE A RETURN TO EACH OF THEM OF THE HOLDING OF THE MEETING AND OF THE DATE THEREOF. IF THE COPY IS NOT SO SENT OR THE RETURN IS NOT SO MADE, THE LIQUIDATOR SHALL BE PUNISHABLE WITH FINE WHICH MAY EXTEND TO FIVE HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE DEFAULT CONTINUES.
• (4) IF A QUORUM IS NOT PRESENT AT THE MEETING AFORESAID, THE LIQUIDATOR SHALL, IN LIEU OF THE RETURN REFERRED TO IN SUB-SECTION (3), MAKE A RETURN THAT THE MEETING WAS DULY CALLED AND THAT NO QUORUM WAS PRESENT THEREAT. UPON SUCH A RETURN BEING MADE WITHIN ONE WEEK AFTER THE DATE FIXED FOR THE MEETING, THE PROVISIONS OF SUB-SECTION (3) AS TO THE MAKING OF THE RETURN SHALL BE DEEMED TO HAVE BEEN COMPLIED WITH.
• (5) THE REGISTRAR, ON RECEIVING THE ACCOUNT AND EITHER THE RETURN MENTIONED IN SUB-SECTION (3) OR THE RETURN MENTIONED IN SUB-SECTION (4), SHALL FORTHWITH REGISTER THEM.
• (6) THE OFFICIAL LIQUIDATOR, ON RECEIVING THE ACCOUNT AND EITHER THE RETURN MENTIONED IN SUB-SECTION (3) OR THE RETURN IN SUB-SECTION (4), SHALL, AS SOON AS MAY BE, MAKE, AND THE LIQUIDATOR AND ALL OFFICERS, PAST OR PRESENT, OF THE COMPANY SHALL GIVE THE OFFICIAL LIQUIDATOR ALL REASONABLE FACILITIES TO MAKE, A SCRUTINY OF THE BOOKS AND PAPERS OF THE COMPANY AND IF ON SUCH SCRUTINY THE OFFICIAL LIQUIDATOR MAKES A REPORT TO THE COURT THAT THE AFFAIRS OF THE COMPANY HAVE NOT BEEN CONDUCTED IN A MANNER PREJUDICIAL TO THE INTERESTS OF ITS MEMBERS OR TO PUBLIC INTEREST, THEN, FROM THE DATE OF THE SUBMISSION OF THE REPORT TO THE COURT THE COMPANY SHALL BE DEEMED TO BE DISSOLVED.

• (6A) IF ON SUCH SCRUTINY THE OFFICIAL LIQUIDATOR MAKES A REPORT TO THE COURT THAT THE AFFAIRS OF THE COMPANY HAVE BEEN CONDUCTED IN A MANNER PREJUDICIAL AS AFORESAID, THE COURT SHALL BY ORDER DIRECT THE OFFICIAL LIQUIDATOR TO MAKE A FURTHER INVESTIGATION OF THE AFFAIRS OF THE COMPANY AND FOR THAT PURPOSE SHALL INVEST HIM WITH ALL SUCH POWERS AS THE COURT MAY DEEM FIT.
• (6B) ON THE RECEIPT OF THE REPORT OF THE OFFICIAL LIQUIDATOR ON SUCH FURTHER INVESTIGATION THE COURT MAY EITHER MAKE AN ORDER THAT THE COMPANY SHALL STAND DISSOLVED WITH EFFECT FROM THE DATE TO BE SPECIFIED BY THE COURT THEREIN OR MAKE SUCH OTHER ORDER AS THE CIRCUMSTANCES OF THE CASE BROUGHT OUT IN THE REPORT PERMIT.
• (7) IF THE LIQUIDATOR FAILS TO CALL A GENERAL MEETING OF THE COMPANY AS REQUIRED BY THIS SECTION, HE SHALL BE PUNISHABLE WITH FINE WHICH MAY EXTEND TO FIVE THOUSAND RUPEES.

SEC 498 - ALTERNATIVE PROVISIONS AS TO ANNUAL AND FINAL MEETINGS IN CASE OF INSOLVENCY.

• WHERE SECTION 495 HAS EFFECT, SECTIONS 508 AND 509 SHALL APPLY TO THE WINDING UP, TO THE EXCLUSION OF SECTIONS 496 AND 497, AS IF THE WINDING UP WERE A CREDITORS' VOLUNTARY WINDING UP AND NOT A MEMBERS' VOLUNTARY WINDING UP :
• PROVIDED THAT THE LIQUIDATOR SHALL NOT BE REQUIRED TO CALL A MEETING OF CREDITORS UNDER SECTION 508 AT THE END OF THE FIRST YEAR FROM THE COMMENCEMENT OF THE WINDING UP, UNLESS THE MEETING HELD UNDER SECTION 495 HAS BEEN HELD MORE THAN THREE MONTHS BEFORE THE END OF THAT YEAR.