Chapter XII SUSPENSION, CANCELLATION AND DISSOLUTION

1. (1) The Registrar, if he has reasonable cause to believe that a society is defunct and is not carrying on business or operations, shall issue a show cause notice to such society, at its registered office enquiring as to whether it is carrying on its business or operations and directing them to file such documents or returns, within a period of ninety days, from the date of issuance of notice.
2. (2) Where the defunct society responds to such notice within specified period and submits the requisite documents or informs along with evidence that it is carrying on business or operations, the Registrar shall, after due verification of records, pass an appropriate order.
3. (3) If the Registrar receives a reply from the defunct society to the effect that it is not carrying on any business or operations, he may direct the society to convene a meeting of its General Body and pass a special resolution for its dissolution after settling all its liabilities and thereafter apply for dissolution of the society, whereupon it shall be incumbent upon such society to carry out such directions, within specified period.
4. (4) Where the Registrar does not receive any reply within specified period, he shall cause a public notice to be issued stating that on the expiration of such period as may be specified in such notice, the registration of such defunct society shall be suspended.
5. (5) If no response is received from the defunct society, its member, creditor or claimant within the specified period, the Registrar shall order suspension of registration of such society and after passing of such order, the society shall not be competent to carry on any business.
6. (6) An order under sub-section (5) suspending the registration of the society shall be notified through a public notice for the information of general public.
7. (7) The society, member, creditor or claimant aggrieved with such suspension, may, within a period of three months from the date of order of suspension, submit a representation to the Registrar.
8. (8) The Registrar, on being satisfied that the society at the time of its suspension, was carrying on business or operations or otherwise and it is just and equitable that the name of the society be restored to the register, may revoke the suspension.
9. (9) The society whose registration is restored shall be deemed to have continued in existence, as if its registration had not been suspended.
10. (10) No claims, whatsoever, shall be valid and entertained against a society on expiry of a period of three months from the date of suspension of its registration.
11. (11) If no representation against the suspension order is received within a period of three months from the date of suspension of registration, the Registrar may, unless contrary is shown, strike off the name of the society from the register and cancel its registration.

A society, which has no assets or liabilities to its account and is not desirous of carrying on with its business or operations, may, after passing a special resolution, apply for cancellation of its registration to the Registrar and the Registrar shall, after giving a public notice of not less than ninety days inviting objections, strike out its name from the register of societies, after considering objections, if any.

1. (1) The Registrar may, if he is satisfied,––
   • (i) that the society has contravened any of the provisions of this Regulation or the rules made thereunder;
   • (ii) that the society is insolvent;
   • (iii) that the business of any such society is conducted fraudulently or not in accordance with its bye-laws or the aims and objects specified in its Memorandum; or
   • (iv) that it is carrying on any unlawful activity or allowing unlawful activity to be carried on in the premises under its control, he may order an inquiry to be conducted by any other officer authorised by him.
2. (2) On receipt of inquiry report, the Registrar may, give a show cause notice to the society specifying briefly the grounds of the proposed cancellation.
3. (3) A public notice inviting objections shall also be published after giving an opportunity to the society and after issuing public notice inviting objections, as to why the registration of the society be not cancelled and after considering the objections filed by society and public, the Registrar may cancel the registration. Explanation.––For the removal of doubts, it is hereby clarified that, an activity shall be deemed to be unlawful if such activity is an offence punishable under any provision of law, for the time being in force in the Union territory.

When the registration of a society is cancelled, the society shall forthwith cease to carry on its business, except in so far as it may be required for the beneficial winding up of its affairs, for which purpose it shall pass a special resolution and dissolve itself in the manner as provided in this Regulation:

Procedure on cancellation of registration

1. (1) Where the registration of a society is cancelled, the Registrar shall––
   • (i) direct the society to complete the process of its dissolution by passing a special resolution, collect all its receivables and settle all its liabilities, provide the details of any of its assets left over after settlement of the liabilities and submit a proposal for transfer of its left-over assets to any other society in existence with identical aims and objects;
   • (ii) assess the credentials of a society to whom any such assets are proposed to be transferred by the society under clause (i) and may either approve such proposal or direct the society to place such assets at the disposal of the District Collector;
   • (iii) constitute a committee of members of such society to carry out the process of dissolution of the society where there is no Governing Body or General Body to carry out the directions under clause (i);
   • (iv) be competent to complete the dissolution of the affairs of the society of his own or by appointing any of his subordinates to do the needful where it is not found feasible to constitute a committee of members of such society and in such case the Registrar shall associate any two members from any other society in existence for this purpose.
2. (2) If on dissolution and after settlement of all the liabilities, a society is left with any movable or immovable assets, the Registrar shall, in the first instance, make efforts to transfer all such assets to any other society in existence with identical aims and objects in operation against a proper receipt, failing which, all such assets shall vest in the custody of the District Collector.
3. (3) Where any assets are placed at the disposal of the District Collector, he may either direct the transfer thereof to a society in operation with identical aims and objects or use such assets preferably for the same purpose or for any other public purpose.

1. (1) A society may resolve to dissolve itself by passing a special resolution in a meeting of the General Body convened for the purpose.
2. (2) On passing of the special resolution under sub-section (1), the Governing Body shall take all necessary steps for settlement of all claims and liabilities, as it may consider appropriate in accordance with its bye-laws and if there are no bye-laws, in accordance with the provisions of this Regulation.
3. (3) If any dispute arises amongst the members of the society, the Governing Body, or the special committee, regarding the winding up of the affairs of the society, it shall be referred to the Registrar for such directions, as he may consider appropriate: Provided that the special resolution for dissolution of the society shall not be deemed to be a matter in dispute.
4. (4) If the Central Government or Government or any of its instrumentalities is a member of or a contributory to or otherwise interested in any society, such society shall not be dissolved without the consent of the Central Government or Government, as the case may be.
5. (5) After completion of all necessary formalities, the Governing Body shall send a report to the Registrar, mentioning about the surplus assets, if any.
6. (6) The Registrar shall thereupon cause a public notice issued at the expense of the society inviting objections for dissolution of society from any person interested in the affairs of such society within the period specified in the notice, which shall in no case be less than three months from the date of notice.
7. (7) If no objection is received from any claimant, creditor or member of the society within three months from the date of issue of such public notice, and after the surplus assets, if any, have been disposed of under section 39, the Registrar shall make an order confirming the dissolution and thereupon the society shall stand dissolved and the Registrar shall record the order of dissolution in the register maintained in his office and strike off the name of the society from such register.
8. (8) If any objection is received from any claimant or creditor or member or any other interested person within the period mentioned in sub-section (7), the Registrar shall not make an order confirming the dissolution of the society unless he is satisfied that the relevant claim or liability have been duly settled and the surplus assets, if any, have been disposed of as provided in this Regulation.

1. (1) Where the registration of a society is cancelled and it is found to be fit for dissolution under section 32 or where the Government consents to dissolve a society under section 37, the Registrar General or the Registrar, as the case may be, shall order dissolution of such society in accordance with the procedure specified in this Regulation.
2. (2) Upon dissolution of a society under sub-section (1), the Registrar General or the Registrar, as the case may be, shall take action for winding up the affairs of the dissolved society in accordance with the provisions contained in this Regulation.

1. (1) Notwithstanding anything contained in section 36, after the settlement of claims and liabilities of society, where any surplus assets are left, such assets shall not be paid to or distributed amongst the members of the society, but shall be taken over and vest in the Government: Provided that in case of a housing society or a resident welfare association is registered as a society, the operation, management and maintenance of facilities for the residents or civic amenities of any defined area, the successor-in-interest shall step in the shoes of original member, subject to fulfilment of qualifications as laid down in the bye-laws of the society and the provisions of this Regulation.
2. (2) The Government shall place such assets at the disposal of the District Collector, who may,––
   • (i) in the first instance identify any other society in operation with identical aims and objects and transfer such assets to such society;
   • (ii) use such assets, preferably for the purpose for which such assets were created; or
   • (iii) for any other public purpose, as deemed appropriate.
3. (3) The records of accounts shall be maintained for a period of three years from the date of dissolution and in case any matter pertaining to any such society is pending before any court, such records shall be maintained till the final disposal of such matter by the competent court.