section 17
Compromise or arrangement for satisfaction of liabilities and reconstruction of societies
The Chhattisgarh Co-operative Societies Act, 1960Corporate1960195 sections
Statutory text
- (1) Notwithstanding anything contained in this Act or in the rules made thereunder, where (a) a compromise or arrangement is proposed between a society and its creditors or any class of them; and (b) a compromise or arrangement is proposed between a society and its members or any class of them, the Registrar may, on the application of the society or of any member or of any creditor of the society or in the case of a society which is being wound up, on the application of the liquidator, order such meeting of the members or creditors or both, as the case may be, to be called, held and conducted in such manner as may be prescribed: Provided that the Registrar may, for the purpose of making any compromise or arrangement, also order a meeting to be called suo motu. (2) If a majority in number representing three-fourths of the members or, as the case may be, the creditors, who are present and voting in person at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if confirmed by the Registrar, be binding on all members or all creditors, as the case may be, and also on the society or, in the case of a society which is being wound up, on the liquidator: Provided that the Registrar shall not confirm any compromise or arrangement unless he is satisfied that all those members or creditors whose interests are affected by such compromise or arrangement had received notice of such meeting: Provided further that in the case of a co-operative bank, the Registrar shall confirm the compromise or arrangement only with the prior written sanction of the Reserve Bank and not otherwise. (3) When any order for calling a meeting to consider any compromise or arrangement between a society and its creditors or any class of them is passed under sub-section (1) or its proviso, the Registrar may give notice of such order to the civil court in which any proceedings in respect of any such liability of the society as is due to any such creditor, to whom a copy of the said order has been sent, are pending, whether the said proceedings were instituted before or after the said order, and upon receipt of such notice, the civil court shall stay those proceedings. If any such compromise or arrangement is not confirmed under sub-section (2), the Registrar shall inform the civil court accordingly and the proceedings which were stayed shall be resumed. (4) If any compromise or arrangement between a society and its creditors or any class of them is confirmed under sub-section (2), the proceedings, if any, which were stayed under sub-section (3) shall abate and no proceedings shall be entertained in any civil court in respect of any such liability of the society as is involved in that compromise or arrangement. (5) The Registrar, with the prior approval of the State Government, may grant exemption to any class of creditors from the operation of this section or any of its provisions. (6) No such compromise or arrangement, which has been confirmed by the Registrar, shall be questioned in any civil court. (7) If any creditor, in respect of whom a compromise or arrangement has been confirmed by the Registrar under sub-section (2), does not receive the amount due to him under such compromise or arrangement after due notice has been given to him for doing so, within the period specified in such notice, such society or liquidator, as the case may be, shall deposit that amount in such manner as may be directed by the Registrar, and on such deposit being made, it shall be deemed that the payment of that amount, which was due to the creditor under that compromise or arrangement, has been made up to the extent of the deposit. (8) Any compromise or arrangement, which has been made between a society and its creditors or any class of them and has been confirmed by the Registrar under sub-section (2), shall cease to operate as soon as the entire amount of the liability determined under it, whether under the provisions of this section or otherwise, has been paid or deemed to have been paid, even if the period originally fixed for the discharge of such liability has not expired. (9) After such compromise or arrangement ceases to operate, no further claim shall remain against such society or against any such movable or immovable property which that society may acquire subsequently, in respect of the liability which was the subject matter of the said compromise or arrangement and the society shall be free to carry on its normal business.
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