12 Meetings of Creditors and Contrbutories
(1) Notice of meeting - (i) The Company Liquidator shall summon meetings of the creditors and contributories by giving not less than fourteen days notice of the time and place appointed for the meeting by an advertisement in one daily newspaper in the English language and one daily newspaper in the principal regional language circulating in the State or Union Territory where the registered office of the Company is situated, and by sending individually to every creditor of the company notice of the meeting of creditors, and to every contributory of the company notice of the meeting of contributories, by sending letters by Registered AD or other recognized modes of service as per section 20 of the Act so as to reach such person in the ordinary course of post not less than seven days before the date appointed for the meeting.
(ii) The notice to each creditor shall be sent to the address given in his proof or, if he has not proved, to the address given in the statement of affairs, or, to the address given in the books of the company, or to such other address as may be known to the person summoning the meeting. The notice to each contributory shall be sent to the address mentioned in the books of the company as the address of such contributory or to such other address as may be known to the person summoning the meeting.
(iii) The notices shall be in Forms No. 27 as may be applicable.
(2) Place and time of meeting. - Every meeting shall be held at such place and time as the Company Liquidator considers most convenient for the majority of the creditors or contributories or both. Different times or places or both may, if thought fit, be appointed for the meetings of creditors and the meetings of contributories.
(3) Notice of first or other meeting to officers of company.-
(i) The Company Liquidator shall also give, to each of the officers of the company, who in his opinion ought to attend the first or any other meeting of creditors or contributories, seven days notice in Form No. 28 of the time and place appointed for such meeting. The notice may either be delivered personally or sent by Registered AD or other recognized modes of service as per section 20 of the Act for acknowledgment as may be convenient. It shall be the duty of every officer who receives notice of such meeting to attend if so required by the Company Liquidator, and if any such officer fails to attend, the Company Liquidator may report such failure to the Tribunal and the Tribunal may issue such directions to such person as it thinks fit.
(ii) The Company Liquidator, if he thinks fit, may instead of requiring any of the officers of the company to attend the meeting as aforesaid, require such officer to answer any interrogatories or to furnish in writing any information that he may require for purposes of such meeting, and if such officer fails to answer the interrogatories or furnish such information, he shall report such failure to the Tribunal and the Tribunal may issue such directions to such person as it may think fit.
(4) Proof of notice - A declaration by way of Affidavit by the Company Liquidator who sent the notices, that such notices have been duly sent, shall be sufficient evidence of the notices having been sent to the persons to whom the same were addressed. The declaration supported with proof of service shall be filed in the Tribunal in Form No. 29.
(5) Costs of meetings -The cost of convening and conductingthe meetings of the creditors or contributories shall be met out of the assets of the company.
(6) Chairman of meetings - The Company Liquidator or some person nominated by him shall be the chairman of the meeting. The nomination shall be in Form No. 30.
(7) Resolution at creditors meeting - At a meeting of creditors, a resolution shall be deemed to be passed, when a majority in number and value of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution. In a winding-up by the Tribunal, the value of a creditor, shall, for the purposes of a first meeting of the creditors held under section 287, be deemed to be the value as shown in the books of the company, or the amount mentioned in his proof, whichever is less and for the purposes of any other meeting, the value which the creditor has proved his debt or claim.
(8) Resolution of contributories meeting - At a meeting of the contributories, a resolution shall be deemed to be passed when a majority in number and value of the contributories present personally or by proxy and voting on the resolution have voted in favour of the resolution. The value of the contributories shall be determined according to the number of votes to which each contributory is entitled as a member of the company under the provisions of the Act, or the articles of the company, as the case may be.
(9) Copies of resolutions to be filed.- The Company Liquidator shall file in the Tribunal, a copy certified by him of every resolution passed at a meeting of creditors or contributories. The Registrar shall keep in each case a file of such resolutions.
(10) Non-receipt of notice by a creditor or contributory.- Where a meeting of creditors or contributories is summoned by notice, the proceedings and resolutions at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding that some creditors or contributories may not have received the notice sent to them.
(11) Adjournments.- The chairman may, with the consent of the meeting, adjourn it, but the adjourned meeting shall be held not later than seven days at the same place as the original meeting unless in the resolution for adjournment another place is specified or unless the Tribunal otherwise orders.
(12) Quorum.- A meeting may not act for any purpose except for adjournment thereof unless there are present or represented thereat in the case of a creditors meeting at least three creditors entitled to vote or in the case of a meeting of contributories at least three contributories or all the creditors entitled to vote or all the contributories, if the number of creditors entitled to vote or the number of contributories as the case may be shall not exceed three.
(13) Procedure in the absence of quorum.- If, within half an hour from the time appointed for the meeting, a quorum of creditors or contributories, as the case may be, is not present or represented, the meeting shall be adjourned to the same day in the following week at the same time and place. If at such adjourned meeting, a quorum be not present, two creditors or contributories present in person shall form a quorum and may transact the business for which the meeting was convened.
Provided that at the adjourned meeting two creditors or the contributories, as the case may be, are not present, the chairman shall submit his report to the Tribunal for such directions as the Tribunal may deem fit.
(14) When creditor can vote.- In the case of a meeting of creditors held under section 287 or of any adjournment thereof a person shall not be entitled to vote as a creditor unless he has duly lodged with the Company Liquidator not later than the time mentioned for that purpose in the notice convening the meeting, a proof of the debt which he claims to be due to him from the company. In the case of other meetings of creditors, a person shall not be entitled to vote as a creditor unless he has lodged with the Company Liquidator a proof of the debt which he claims to be due to him from the company and such proof has been admitted wholly or in part before the date on which the meeting is held:
Provided that this Rule and the next four following Rules shall not apply to a meeting of creditors held prior to the meeting of creditors under section 287:
Provided further that these Rules shall not apply to any creditors or class of creditors who by virtue of these Rules or any directions given thereunder are not required to prove their debts, or to any voluntary liquidation meetings.
(15) Cases to which creditors may not vote. - A creditor shall not vote in respect of any unliquidated or contingent debt or any debt the value of which is not ascertained, nor shall a creditor vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him unless he is willing to treat liability to him thereon of every person who is liable thereon antecedently to the company, and against whom no order of adjudication has been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for purposes of dividend, to deduct it from his proof.
(16) When secured creditor can vote. -
(i) For the purposes of voting at a meeting, in a winding-up by the Tribunal, a secured creditor shall, unless he surrenders his security, state in his proof the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to vote only in respect of the balance due to him, if any, after deducting the value of his security.
(ii) For the purposes of voting at any voluntary liquidation meeting, a secured creditor shall, unless he surrenders his security, lodges with the liquidator, or where there is no liquidator, at the registered office of the company, before the meeting, a statement giving the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to vote only in respect of balance due to him, if any, after deducting the value of his security.
(17) Effect of voting by a secured creditor.- If a secured creditor votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Tribunal on application is satisfied that the omission to value the security was due to inadvertence.
(18) Procedure when secured creditor votes without surrendering security.- The liquidator may within fifteen days from the date of the meeting at which a secured creditor voted on the basis of his valuation of the security, require him to give up the security for the benefit of the creditors generally on payment of the value so estimated by him, and may, if necessary, apply to the Tribunal for an order to compel such creditor to give up the security: Provided that the Tribunal may, for reasoned cause shown, permit a creditor to correct his valuation before being required to give up the security, upon such terms as to costs as the Tribunal may consider just.
(19) Admission or rejection of proofs for purposes of voting.- The chairman shall have power to admit or reject a proof for the purposes of voting, but his decision shall be subject to appeal to the Tribunal. If he is in doubt whether a proof shall be admitted or rejected, he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained.
(20) Minutes of proceedings - (i) The chairman shall cause minutes of the proceedings at the meeting to be drawn up and entered in the Minute Book and the minutes shall be signed by him or by the chairman of the next meeting.
(ii) A list of creditors and contributories present at every meeting shall be made and kept as in Form No. 31.
(21) Report to the Tribunal “ The Company Liquidator shall, within seven days of the conclusion of the meeting, report the result thereof to the Tribunal in Form No. 24. The report shall include the details of advices given by the Official Liquidator or his nominee and in case of disagreement with his advices; the reasons thereto shall also be mentioned in the report. |