Chapter IX WINDING UP OF CO-OPERATIVE SOCIETIES

(1) If the Registrar, after an inquiry held under section 50, or an inspection made under section 51, or on receipt of an application made by not less than three-fourth of the members of a co-operative society, is of opinion that the society ought to be wound up, he may after giving the society an opportunity of making its representation, by order, direct it to be wound up. (2) The Registrar may of his own motion make an order directing the winding up of a co-operative society- (a) where it is a condition of the registration of a society that the society shall consist of at least ten members and the number of members has been reduced to less than ten; or (b) where the society has not commenced working or has ceased to function in accordance with co-operative principles. (3) The Registrar may cancel an order for the winding up of a co-operative society, at any time, in any case where, in his opinion, the society should continue to exist. (4) A copy of such order shall be communicated by registered post to the society and to the credit agency, if any, of which the society is a member, (5) Where an appeal against an order for the winding up of a co-operative society is not presented within the period specified under sub-section (2) of section 68, the order shall take effect on the expiry of that period. (6) Where an appeal against an order for the winding up of a co-operative society is presented within the period specified under sub-section (2) of section 68, the order shall not take effect until it is confirmed by the Chief Commissioner and such confirmation is communicated to the society. In an arbitration proceeding, the Registrar or the arbitrator, as the case may be, shall communicate the date, time and place of hearing of the dispute to all the parties concerned.

(1) Where the Registrar has made an order under section 57 for the winding up of a co-operative society, he may appoint a liquidator for the purpose and fix his remuneration. (2) Notwithstanding anything contained in sub-section(5) or sub-section (6) of section 57 a liquidator shall, on appointment, take into his custody or under his control all the property, effects and actionable claims to which the co-operative society is or appears to be entitled and shall take all such steps as he may deem necessary or expedient, to prevent loss or deterioration of, or damage to, such property, effects and claims and he may carry on the business of the society so far as may be necessary with the previous approval of the Registrar. (3) Where an appeal is preferred under section 58 against an order for the winding up of a co-operative society made under section 57 the liquidator shall continue to have custody or control of the property, effects and actionable claims in sub-section (2) and have authority to take the steps referred to in that sub-section until the disposal of the appeal. (4) Where an order for the winding up of a co-operative society is set aside in appeal, the property, effects and actionable claims of the society shall re-vest in the society. (5) The Registrar may, for reasons to be recorded in writing, remove a liquidator appointed under this section and appoint another liquidator in his place. The Registrar or the arbitrator, as the case may be, shall have power to appoint or remove a guardian for the party to the dispute who is a minor or who by reasons of unsound mind or mental infirmity, is incapable of protecting his interest.

(1) Subject to any rules made in this behalf, the whole of the assets of a co-operative society, in respect of which an order for winding up has been made, shall vest in the liquidator appointed under section 58 from the date on which the order takes effect and the liquidator shall have power to realise such assets by sale or otherwise, (2) Such liquidator shall also have power, subject to the control of the Registrar:- (a) to institute and defend suits and other legal proceedings on behalf of the co-operative society by the name of his office; (b) to determine, from time to time, the contribution (including debts due and costs of liquidation) to be made or remaining to be made by the members or past members or by the estate or nominees, heirs or legal representatives of deceased members or by any officers or former officers, to the assets of the co-operative society ; (c) to investigate all claims against the co-operative society and subject to the provisions of this Regulation to decide questions of priority arising between claimants ; (d) to pay claims against the co-operative society including interest up to the date of winding up according to their respective priorities, if any, in full or rateable, as the assets of the society may permit; the surplus, if any, remaining after payment of the claims being applied in payment of interest from the date of such order of winding up at a rate fixed by him but not exceeding the contract rate in any case; (e) to determine by what persons and in what proportions the costs of liquidation are to be borne; (f) to determine whether any person is a member, past member or nominee of a deceased member ; (g) to give such directions in regard to the collection and distribution of the assets of the co-operative society as may appear to him to be necessary for the winding up of its affairs ; (h) to carry on the business of the co-operative society so far as may be necessary for its beneficial winding up ; (i) to make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging to have any claim, present or future, whereby the co-operative society may be rendered liable; (j) to make any compromise or arrangements with any person between whom and the co-operative society there exists any dispute and to refer any such dispute to arbitration ; (k) after consulting the members of the co-operative society, to dispose of the surplus, if any, remaining after paying the claims against the society, in such manners as may be prescribed ; and (l) to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, subsisting or alleged to subsist between the co-operative society and a contributory or alleged contributory or other debtor or person apprehending liability to the co-operative society and all questions in any way relating to or affecting the assets or the winding up of a co-operative society on such terms as may be agreed and take any security of the discharge of any such call, liability, debt or claims and give a completed discharge in respect thereof. (3) When the affairs of a co-operative society have been wound up, the liquidator shall make a report to the Registrar and deposit the records of the society in such place as the Registrar may direct. The Registrar or the arbitrator, as the case may be, shall hear the parties and witnesses who attend. On the basis of such evidence and after consideration of any documentary evidence that may be produced by either party, he shall give a decision or award, as the case may be in accordance with justice, equity and good conscience. The decision or award shall be reduced to writing, announced to the parties and filed with the office of the Registrar. In the absence of any party duly summoned to attend the dispute may be decided exparte.

Notwithstanding anything contained in any law relating to insolvency, the contribution assessed by a liquidator shall rank next to debts due to the Government or to any local authority in order of priority in insolvency proceedings. The arbitrator or the Registrar, as the case may be, shall have the power to order the expenses of determining a dispute or the cost of either party to be borne by such party or parties to the dispute as he may deem fit. The amount of advance, if any, deposited by the party concerned with the arbitrator under rule 56 (1) shall, however, be adjusted against the cost so determined and the balance amount will be payable by the party concerned.

(1) The Registrar may after considering the report of the liquidator made to him under sub-section (3) of section 59 order the registration of the co-operative society to be cancelled. (2) An order passed under sub-section (1) shall be communicated by registered post to the president of the society and to the credit agency, if any, of which the society was a member. (1) The record of arbitration proceedings shall be kept in such place and in such manner as the Registrar may direct. (2) A copy of decision or award shall, on application, be given to a party interested in the dispute by the Registrar on payment of such fees as are laid down in rule 82 of these rules. (1) The record of arbitration proceedings shall be kept in such place and in such manner as the Registrar may direct. (2) A copy of decision or award shall, on application, be given to a party interested in the dispute by the Registrar on payment of such fees as are laid down in rule 82 of these rules.