11 Advisory Committee
(1) Meeting of creditors and contributories -The meeting of the creditors and contributories in accordance with the provisions of sub-section (3) of section 287 for the purpose of determining the persons who shall be the members of the Advisory Committee, shall be convened, held and conducted in the manner hereinafter provided by these rules for the holding and conducting of meetings of creditors and contributories. However, on application made by the company liquidator the Tribunal may exempt any procedure or manner of conducting the meetings or prescribe any alternative procedure or manner, considering the availability of fund with the company liquidator or number of creditors and contributories.
(2) Company Liquidator to report result of meeting -
(i) The Company Liquidator shall not later than seven days after the holding of the meetings of the creditors or contributories, report the result thereof to the Tribunal. Such report shall be in Form No. 24.
(ii) Where the creditors and contributories have agreed upon the constitution and composition of the Advisory Committee and the persons who are to be members thereof, an Advisory committee shall, subject to the provisions of sub-section (2) of section 287, be constituted in accordance with such decision, and the Company Liquidator shall set out in his report the names of the members of the Advisory Committee so constituted.
(iii) Where the creditors and contributories have not agreed upon the constitution and composition of the Advisory Committee and the persons who are to be members thereof, the Company Liquidator shall, at the time of making his report as aforesaid, apply to the Tribunal for directions as to whether there shall be an Advisory Committee, and if so, what shall be its composition, and who shall be the members thereof, and the Tribunal shall thereupon fix a date for the consideration of the report of the Company Liquidator. Notice of the date so fixed shall be advertised by the Company Liquidator in such manner as the Tribunal shall direct not less than seven days before the date fixed. The advertisement shall be in Form No. 25.
(iv) On the date fixed for hearing of the said application for directions, the Tribunal may, after hearing the Company Liquidator and any creditor or contributory who may appear, appoint an Advisory Committee, or dispense with the appointment of an Advisory Committee, or pass such orders or give such directions in the matters, as the Tribunal may think fit.
(v) Notwithstanding anything contained in this rule, in regard to composition of the Advisory Committee, where the Liquidator of the company is from the panel maintained by the Central Government, the Committee shall include the Official Liquidator of the concerned jurisdiction or his nominee who is not below the rank of the Assistant Official Liquidator as one of the members of the Advisory Committee.
(vi) In case the Official Liquidator or his nominee is not able to attend the meeting of the Advisory Committee, he may forward his advice in writing to the Company Liquidator.
(vii) In the event of disagreement with the advice rendered by the Official Liquidator or his nominee, the reasons of such disagreement shall be recorded in the minutes of the Advisory Committee meeting.
(viii) As per sub-section (1) of section 288, the Company Liquidator shall make quarterly reports to the Tribunal in Form No. 26 with respect to the progress of winding up of the company.
(3) Filling - up of the vacancy in Advisory Committee -
(i) On a vacancy occurring in the Advisory Committee, the Company Liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, within a period of seven days to fill the vacancy; and the meeting may, by resolution, re-appoint the same, or appoint another, creditor or contributory to fill the vacancy:
Provided that if the Company Liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled, he may apply to the Tribunal and the Tribunal may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order.
The continuing members of the Advisory committee, if not less than two, may act notwithstanding any vacancy in the Advisory committee.
Where the creditors or contributories, as the case may be, fail to fill the vacancy for whatever reason, the Company Liquidator shall forthwith report such failure to the Tribunal and Tribunal may, by order, fill such vacancy.
(4) Company Liquidator and members of the Advisory Committee dealing with company s assets - Neither the Company Liquidator nor any member of the Advisory Committee shall, while acting as liquidator or member of such committee in any winding-up, either directly or indirectly, by himself or through his employer, partner, clerk, agent, servant, or relative, become a purchaser of any part of the company s assets, except by leave of the Tribunal. Any such purchase made contrary to the provisions of this rule may be set aside by the Tribunal on the application of the Company Liquidator or of a creditor or contributory, as the case may be, and the Tribunal may make such order as to costs as it may think fit.
(5) Cost of obtaining sanction of Tribunal - In any case in which sanction of the Tribunal is obtained under the last two preceding rules, the costs of obtaining such sanction shall be borne by the person in whose interest such sanction is obtained and shall not be payable out of the company s assets.
(6) Meetings of the Advisory Committee - For the purposes of sub-section (5) of section 287 -
(i) The advisory committee shall meet at such times as it may from time to time appoint and the Company liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.
(ii) The quorum for a meeting of the advisory committee shall be one-third of the total number of the members, or two, whichever is higher.
(iii) The advisory committee may act by a majority of its members present at a meeting, but shall not act unless a quorum is present.
(iv) A member of the advisory committee may resign by notice in writing signed by him and delivered to the Company Liquidator.
(v) If a member of the advisory committee is adjudged an insolvent, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee without the leave of those members who, together with himself, represent the creditors or contributories, as the case may be, his office shall become vacant.
(vi) A member of the advisory committee except the Official Liquidator or his nominee appointed as committee member may be removed at a meeting of creditors if he represents creditors, or at a meeting of contributories if he represents contributories, by an ordinary resolution of which seven days notice has been given, stating the object of the meeting. |