Duty of Liquidator to Call Creditors’ Meeting in Case of Insolvency

Duty of Liquidator to Call Creditors’ Meeting in Case of Insolvency [Section 4951. If 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 of solvency, or that period has expired without the debts having been paid in full, he must forthwith summon a meeting of the creditors and must lay before the meeting a statement of the assets and liabilities of the company. If he fails to comply with the above requirements, he shall be punishable with fine which may extend to Rs. 5,000’.

7. Duty of the Liquidator to Inform the Income-tax Officer. Every liquidator of a company being wound up is to give notice of his appointment as liquidator to the Income-tax Officer, having jurisdiction to assess the income of the company, within thirty days of his appointment. It may also be noted that the Official Liquidator has been held to be the principal officer of the company for income-tax assessment purposes as per the decision in ITO Vs. Official Liquidator [1977] 47 Compo Cas. 54 (DB)(AP).

8. Duty of the Liquidator to Call General Meeting at the End of Each Year [Section 4961. In case winding-up continues for more than one year, the liquidator must:

(a) call a general meeting of the company at the end of the first year from the commencement of 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 (i.e., the Regional Director) may allow; and

(b) lay before the meeting an account of his acts and dealing and of the conduct

of the winding up during the preceding year.

Failure on the part of the liquidator to call general meetings, as aforesaid, shall be punishable with fine which may extend to Rs. 5,000’.

9. Final Meeting and Dissolution [Section 4971. 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.

The meeting must be called by advertisement specifying the time, place and object of the meeting, and must be published at least one month before the meeting in the Official Gazette and also in some newspaper circulating in the district where the registered office of the company is situated.