Chapter IX DISSOLUTION

(1) A co-operative may, by a special resolution, authorize its own dissolution; Provided that a copy of the notice of the general meeting shall be sent by registered post with an invitation to attend, to the Registrar, to all to whom the co-operative owes money, to any secondary co-operative to which the co-operative is affiliated, and to any co-operative/s with which a partnership contract has been entered into. (2) Invitees under the proviso of sub-section (1) shall have the right to make a presentation to the general body, if they so wish to, on the issue of the proposed dissolution. (3) Within fifteen days of such authorization for dissolution, the co-operative shall send to the Registrar a copy by registered post of the authorization to dissolve the co-operative. (4) The authorization approved in pursuance of sub-section (1) is required to set out: (a) the assets and liabilities of the co-operative; (b) the claims of creditors; (c) the number of members; (d) the nature and extent of the members’ interest in the co-operative; (e) the name and address of the liquidator appointed by the co-operative. (5) When the Registrar receives the special resolution passed in pursuance of sub-section(1): (a) where the Registrar is satisfied that the co-operative has no assets or liabilities, the Registrar may dissolve the co-operative, strike off its name from the register of co-operatives and issue a certificate of dissolution; or (b) the Registrar shall, within thirty days of such approval, cause at the expense of the co-operative a notice of the special resolution to be published once a week for two consecutive weeks in a newspaper published or distributed in the district where the registered office of the co-operative is located. (6) In the case of dissolution, the Registrar may require, till the certificate of dissolution is issued by him/her, from the liquidator appointed by the co-operative or any other person who is required to furnish information, a periodical return showing: (a) the progress of dissolution; (b) the distribution of any undistributed surplus or reserve; and (c) any other relevant information that the Registrar may require.

(1) Where the Registrar has reasonable cause to believe that a cooperative: (a) has not commenced business within two years after the date shown on its certificate of registration; or (b) has not carried on business for two consecutive years; He/she shall send to the cooperative a letter by registered post, inquiring whether the cooperative is carrying on business. (2) Where the Registrar does not, within thirty days of the date he/she sent a letter in pursuance of sub-section (1), receive an answer to the letter, he/she shall, within, fifteen days after the expiry of thirty days, send to the cooperative a letter stating that: (a) a letter was sent to the cooperative in pursuance of sub-section (1); (b) no answer to that letter has been received by him/her, and (c) if an answer is not received to the letter sent under this sub-section within thirty days from the date it is sent, a notice will be published in the Gazette to dissolve the cooperative. (3) Where the Registrar: (a) receives an answer from the cooperative that it is not carrying on business; or (b) does not, within thirty days after the date that he/she sent a letter in pursuance of Sub-section (2), receive an answer to that letter; he/she may publish in the Gazette and send to the cooperative a notice that, at the expiry of thirty days from the date of that notice, the cooperative will have its name struck off the register, or, unless cause is shown to the contrary, be dissolved. (4) At the expiry of thirty days after the date of the issue of the notice in pursuance of sub-section (3), the Registrar may, unless cause to the contrary is previously shown by the cooperative: (a) where he/she is satisfied that the cooperative has no assets or liabilities, dissolve the cooperative, strike off its name from the register of cooperatives and issue a certificate of dissolution; or (b) appoint a liquidator to dissolve the cooperative, in accordance with section 53. (5) Where a cooperative fails to file returns and furnish information, a required under section 45, even after a lapse of two hundred and forty days from the close of the cooperative’s financial year, the Registrar shall require the board to call a special general meeting for the purpose of considering the annual returns to be filed with the information to be furnished to the Registrar. (6) Where the board fails to call a special general meeting within the time period specified in Section 28 (2), the Registrar may call the special general meeting: (a) to review the affairs of the cooperative; and (b) to ascertain whether the general body desires to continue the cooperative. (7) Where: (a) a quorum of members is not present at a special general meeting called in pursuance of sub-section(5) or (6); or (b) the general body fails to pass a resolution to the effect that: (i) the cooperative is to carry on business; (ii) the board must present, within Sixty days from the date of the special general meeting, to the general body the annual returns to be filed with and the information to be furnished to the Registrar; and (iii) the cooperative will file the returns with and furnish the information to the Registrar within ninety days from the date of the special general meeting; or (c) the cooperative fails to file the returns with and furnish the information to the Registrar within ninety days from the date of the special general meeting; the Registrar may: (i) where he/she is satisfied that the cooperative has no assets or liabilities, dissolve the cooperative, strike off its name from the register of cooperatives and issue a certificate of dissolution; or (ii) appoint a liquidator to dissolve the cooperative, in accordance with section 53.

(1) The Registrar or an interested person may, after giving the cooperative ninety days notice of the proposed application, apply to the Court for an order dissolving a cooperative, where the cooperative: (a) obtained its registration by fraud or mistake; (b) exists for an illegal purpose; (c) has willfully, after notice by the Registrar, violated any of the provisions of this Act or its articles of association; or (d) is no longer operating on a cooperative basis. (2) Where an interested person applies to a Court in pursuance of this section, he/she shall give the Registrar notice of his/her application and the Registrar is entitled to appear and be heard in person or by counsel. (3) Where the Court receives an application in pursuance of this section, it may order that the cooperative be dissolved or liquidated and dissolved under the supervision of the Registrar. (4) where the Registrar receives an order made in pursuance of sub-section (3), he/she shall: (a) if the order is to dissolve the cooperative, dissolve it, strike off its name form the register of cooperatives and issue a certificate of dissolution; or (b) if the order is to liquidate and dissolve the cooperative, appoint any person as a liquidator to wind up the affairs of the cooperative.

Where a co-operative is to be dissolved and no liquidator is appointed by the general body, the Registrar may appoint any person as a liquidator to wind up the affairs of the co-operative with the direction that the liquidation proceedings be made final within two years two years from the date of appointment as liquidator.

A liquidator shall: (a) immediately give notice to each claimant and creditor, known to the liquidator; (b) immediately publish a notice regarding his/her appointment as liquidator in the Gazette, and once a week for two consecutive weeks in a local newspaper of the area where the co-operative has its registered office; (c) place in the notice mentioned in clause (a) and (b), a provision requiring any person; (i) indebted to the co-operative, to render an account and pay to the liquidator at the time and place specified any amount owing; (ii) possessing property to the co-operative, to deliver it to the liquidator at the time and place specified; and (iii) having a claim against the co-operative, whether liquidated, un-liquidate, future or contingent, to present particulars of the claim in writing to the liquidator; Not later than sixty days from the first publication of the notice. (d) take into custody and control the property of the co-operative; (e) open and maintain a trust account for the moneys of the co-operative; (f) keep accounts of the moneys of the co-operative received and paid out by him/her; (g) maintain separate lists of the members, creditors and other persons having claims against the co-operative; (h) where at any time the liquidator determines that the co-operative is unable to pay or adequately provide for the discharge of its obligation, apply to the Registrar/ general body as the cause may be, for directions; and (i) deliver to the Registrar/general body, periodically as the Registrar/ general body may require, financial statements of the co-operative in any form that the liquidator considers proper or that the Registrar/general body may require.

(1) The liquidator may-- (a) retain lawyers, accountants, engineers, appraisers and other professional advisors; (b) bring, defend or take part in any civil, criminal or administrative proceeding in the name and on behalf of the co-operative; (c) carry on the business of the co-operative as required for an orderly liquidation; (d) sell by public auction or private sale any property of the co-operative; (e) do all acts execute any documents in the name and on behalf of the co-operative; (f) borrow money on the security of the property of the co-operative; (g) settle or compromise any claims by or against the co-operative; and (h) do all other things that the liquidator considers necessary for the liquidation of the co-operative and distribution of its property. (2) Where a liquidator has reason to believe that any person has in his/her possession or under his/her control, or has concealed, withheld or misappropriated any property of the co-operative, the liquidator may apply to the court for an order requiring that person to appear before the Court at the time and place designated in the order and to be examined. (3) Where the examination mentioned in sub-section (2) discloses that a person has concealed, withheld or misappropriates property of the co-operative, the Court may order that person to restore the property or pay compensation to the liquidator on behalf on the co-operative. (4) The liquidator shall not purchase, directly or indirectly, any part of the stock-in-trade, debts or assets of the co-operative. (5) The liquidator shall submit the progress of the liquidation proceedings and also render accounts from time to time, to the registrar or general body, as the case may be.

(1) The liquidator shall pay the costs of liquidation out of the property of the co-operative and shall pay or make adequate provision for all claims against the co-operative. (2) After paying or making adequate provision for all claims against the co-operative, the liquidator shall apply to the Registrar for approval of the final accounts and for permission to distribute in money or in kind the remaining property of the co-operative in accordance with the articles of association. (3) Where the Registrar approves the final accounts rendered by a liquidator in pursuance of sub-section (2), he/she shall: (a) issue directions with respect to the custody or disposal of the documents and records of the co-operative; and (b) Discharge the liquidator. (4) Where the Registrar discharges a liquidator in pursuance of sub-section (3), he/she shall dissolve the co-operative, issue a certificate of dissolution and strike off its name from the register of co-operatives. (5) The co-operative ceases to exist on the date shown in the certificate of dissolution.