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Part XV
Chapter 1 Preliminary
Modes of Winding Up
401. (1) The winding up of a company may be effected -
(a) by the court; or
(b) voluntarily; or
(c) subject to the supervision of the court.
(2) The provisions of this Decree with respect to winding up shall apply, unless the contrary appears, to the winding up of a company in any of those modes.
Contributories
402. In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company as provided in section 92 of this Decree.
403. The term "contributory" means every person liable to contribute to the assets of a company in the event of its being wound up and for the purposes of all proceedings for determining and all proceedings prior to the final determination of the persons who are to be deemed contributories, the expression shall include any person alleged to be a contributory.
404. The liability of a contributory shall create a debt of the nature of a specialty accruing and due from him the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.
405. (1) If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives and his heirs and devises, shall be liable in due course of administration to contribute to the assets of the company in discharge of his liability and they shall be contributories accordingly.
(2) Where the personal representatives are placed on the list of contributories, the heirs or devisees need not be added; but they may be added as and when the court thinks fit.
(3) If the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the whole or any part of the estate of the deceased contributory, and for compelling payment out of it of the money due.
406. (1) If a contributory becomes bankrupt, either before or after he has been placed on the list of contributories, then-
(a) his trustee in bankruptcy shall represent him for all the purposes of the winding up, and shall be a contributory accordingly, and may be called on to admit to proof against the estate of the bankrupt, or otherwise to allow to be paid out of his assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the assets of the company; and
(b) there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as already made.
(2) The provisions of this section shall extend and apply with all necessary changes to the case of an insolvent person.
Chapter 2 Winding up by the Court
Jurisdiction
407. (1) The court having jurisdiction to wind up a company shall be the Federal High Court within whose area of jurisdiction the registered office or head office of the company is situate.
(2) For the purpose of this section, "registered office or head office" means the place which has longest been the registered office or head office of the company during the 6 months immediately preceding the presentation of the petition for winding up.
Cases in which company may be wound up by Court
408. A company may be wound up by the court if -
(a) the company has by special resolution resolved that the company be wound up by the court;
(b) default is made in delivering the statutory report to the Commission or in holding the statutory meeting;
(c) the number of members is reduced below two;
(d) the company is unable to pay its debts;
(e) the court is of opinion that it is just and equitable that the company should be wound up.
409. A Company shall be deemed to be unable to pay its debts if -
(a) a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 2,000 then due has served on the company, by leaving it at its registered office or head office, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor; or
(b) execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) the court, after taking into account any contingent or prospective liability of the company is satisfied that the company is unable to pay its debts.
Petitions for winding up and effects thereof
410. (1) An application to the court for the winding up of a company shall be by petition presented subject to the provisions of this section, either by -
(a) the company;
(b) a creditor, including a contingent or prospective creditor of the company;
(c) the official receiver;
(d) a contributory;
(e) a trustee in bankruptcy to, or a personal representative of a creditor or contributory;
(f) the Commission under section 323 of this Decree;
(g) a receiver if authorised by the instrument under which he was appointed; or
(h) by all or any of those parties, together or separately.
(2) Notwithstanding anything in subsection (1) of this section -
(a) a contributory shall not be entitled to present a petition for winding up a company unless -
(i) the number of members is reduced below two; or
(ii) the shares in respect of which he is contributory or some of them, were originally allotted to him or have been held by him, and registered in his name, for at least 6 months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder;
(b) a winding up petition shall not, if the ground of the petition is default in delivering the statutory report to the Commission or in holding the statutory meeting, be presented by any person except a shareholder, or before the expiration of 14 days after the last day on which the meeting should have been held;
(c) the court shall not hear a winding up petition presented by a contingent or prospective creditor until sufficient security for costs has been given, and a prima facie case for winding up has been established to its satisfaction;
(d) in any case falling within section 320 or 321 of this Decree (proceedings on inspector's reports) or paragraph (e) of section 408 of this Decree, a winding up petition may be presented by the Commission with the approval of the Attorney-General of the Federation.
(3) Where a company is being wound up voluntarily or subject to supervision, a winding up petition may be presented by the official receiver attached to the court, as well as by any other person authorised in that behalf under the other provisions of this section; but the court shall not make a winding up order on any such petition unless it is satisfied that the voluntary winding up or winding up subject to supervision cannot be continued with due regard to the interests of the creditors or contributories.
(4) A contributory shall be entitled to present a winding up petition notwithstanding that there may not be assets available on the winding up for distribution to contributories.
411. (1) On hearing a winding up petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit; but the court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.
(2) Unless it appears to the court that some other remedy is available and that the petitioners are acting unreasonably in seeking a winding up order instead of pursuing that remedy, the court, on hearing a petition by contributory members of a company for relief by winding up on the ground that it would be just and equitable so to do, shall make the order as prayed if of opinion that the petitioners are entitled to the relief sought.
(3) Where a petition is presented on the ground of default in delivering the statutory report to the Commission or in holding the statutory meeting, the court instead of making a winding up order, may direct the delivery of the statutory report or the holding of a meeting as the case may require, and order the costs to be paid by the persons who, ion the opinion of the court, are responsible for the default.
412. Where a winding up petition has been presented and an action or other proceeding against a company is instituted or pending in any court (in this section referred to as "the court concerned"), the company or any creditor or contributory may, before the making of the winding up order, apply to the court concerned for an order staying proceedings; and the court concerned may, with or without imposing terms, stay or restrain proceedings, or if it thinks fit, refer the case to the court hearing the winding up petition.
413. In a winding up by the court, any disposition of the property of the company, including things in action and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up shall, unless the court otherwise orders, be void.
414. Where a company is being wound up by the court, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void.
Commencement of Winding up
415. (1) Where, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
(2) In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.
Consequences of Winding up order
416. On the making of a winding up order, a copy of the order shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission which shall make a minute thereof in its books relating to the Company.
417. If a winding up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the Court may impose.
418. An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.
Official Receiver
419. (1) For the purpose of this Decree and so far as it relates to the winding up of companies by the court, "official receiver" means the deputy Chief Registrar of the Federal High Court or an officer designated for the purpose by the Chief Judge of the Court.
(2) Any such officer shall, for the purpose of his duties under this Decree, be styled "the official receiver".
420. (1) Where the court has made a winding up order or appointed a provisional liquidator there shall, unless the court thinks fit to order otherwise and so orders, be made out and submitted to the official receiver statement as to the affairs of the company in the prescribed form, verified by affidavit, and showing the particulars of its assets, debts and liabilities, the names, residences and occupations of its creditors the securities held by them respectively, the dates when the securities were respectively given the list of members and the list of charges and such further or other information as may be prescribed or as the official receiver may require.
(2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and the person who as at that date the secretary of the company, or by such of the persons mentioned in this subsection as the official receiver, subject to the direction of the court, may require to submit and verify the statement, that is to say persons who-
(a) are or have been officers of the company;
(b) have taken part in the formation of the company at any time within one year before the relevant date;
(c) have been or are in the employment of the company within the said year, and are in the opinion of the official receiver capable of giving the information required;
(d) are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.
(3) The statement shall be submitted within 14 days from the relevant date or within such extended time as the official receiver or the court may for special reasons appoint.
(4) Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official receiver or provisional liquidator, as the case may be, out of the assets of the company such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official receiver may consider reasonable, subject to an appeal to the Court.
(5) If any person without reasonable excuse, makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.
(6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on a payment of the prescribed fee to inspect the statement submitted in pursuance of this section, and to a copy of or extract from it.
(7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of contempt of court and shall, on the application of the liquidator or of the official receiver, be punishable accordingly.
(8) In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment and in a case where no such appointment is made, the date of the winding up order.
421. (1) If a winding up order is made, the official receiver shall as soon as practicable after receipt of the statement to be submitted under section 420 of this Decree or where the court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the court -
(a) as to the amount of capital issued, subscribed and paid up, and the estimated amount of assets and liabilities; and
(b) if the company has failed, as to the causes of the failure; and
(c) whether, in his opinion, further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company.
(2) The official receiver may if he thinks fit, make further reports, stating the manner in which the company was formed and whether in his opinion fraud has been committed by any person in its promotion or formation, or by any officer of the company in relation to the company since its formation and the reports may include any other matters which, in his opinion, it is desirable to bring to the notice of the court.
(3) If any further report under this section indicates the commission of fraud, the court shall have the further powers provided in section 450 of this Decree (which confers authority to order public examination of certain officials).
Liquidators
422. (1) The court may appoint a liquidator or liquidators for the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose and where there is a vacancy, the official receiver shall by virtue of his office, act as liquidator until such time as the vacancy is filled.
(2) At any time after the presentation of a petition and before the making of a winding up order, the appointment shall be provisional and the court making the appointment may limit and restrict the powers of the liquidator by the order appointing him.
(3) In the application of the foregoing provisions of this section -
(a) if a provisional liquidator is to be appointed before the making of a winding up order, the official receiver or any other fit person may be so appointed;
(b) on the making of a winding up order, if no liquidator is appointed, the official receiver shall by virtue of his office become the liquidator;
(c) the official receiver in his capacity as provisional liquidator shall, and in any other case may, summon meetings of creditors and contributories of the company to be held separately for the purpose of determining whether or not an application is to be made to the court for appointing a liquidator in place of the official receiver;
(d) if a person other than the official receiver is appointed liquidator he shall not be capable of acting in that capacity until he has notified his appointment to the Commission and given security in the prescribed manner to the satisfaction of the court.
(4) If more than one liquidator of a company is appointed by the court, the court shall declare whether anything by this Decree required or authorised to be done by a liquidator is to be done by all or any one or more of them.
(5) A liquidator appointed by the court may resign, or, on cause shown be removed by the court; and any vacancy in the office of a liquidator so appointed shall be filled by the court.
(6) Where a person other than the official receiver is appointed a liquidator, he shall receive salary in an amount, or remuneration by way of percentage or otherwise, as the court may direct; and, if more such persons than one are appointed liquidators, their remuneration shall be distributed among them in such proportions as the court directs.
(7) Where a liquidator of a company is appointed, he shall, after his individual name -
(a) if he is the official receiver be described as "official receiver and liquidator of (add here name of the company)" and
(b) in any other case be described as "liquidator of (add here name of the company)".
(8) The acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.
(9) If a liquidator is appointed under this section, all the powers of the directors shall cease, except so far as the court may by order sanction the continuance thereof.
423. In a winding up by the court the liquidator shall take into his custody, or under his control, all the property and choses in action to which the company is or appears to be entitled.
424. Where a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon, but subject to the requirements or registration under any particular enactment, the property to which the order relates shall vest accordingly; and the liquidator may, after giving such indemnity if any, as the court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.
425. (1) The liquidator in a winding up by the court shall have power, with the sanction either of the court or of the committee of inspection, to -
(a) bring or defend any action or other legal proceeding in the name and on behalf of the company;
(b) carry on the business of the company so far as may be necessary for its beneficial winding up;
(c) appoint a legal practitioner or any other relevant professionals to assist him in the performance of his duties;
(d) pay any classes of creditors in full;
(e) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;
(f) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect thereof.
(2) The liquidator in winding up by the court shall have power to -
(a) sell the property of the company of whatever nature by public auction or private contract, with power to transfer the whole thereof to any person or company or to sell the same in parcels;
(b) do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose to use, when necessary, the company's seal;
(c) prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance against his estate, and to receive dividends in the bankruptcy, insolvency or sequestration in respect of that balance as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors;
(d) draw, accept, make and indorse any bill of exchange or promissory note in the name and on behalf of the company with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business;
(e) raise on the security of the assets of the company any money requisite;
(f) take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself;
(g) appoint an agent to do any business which the liquidator is unable to do himself;
(h) do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.
(3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.
426. If during the winding up of a company by the court a person other than the official receiver is appointed liquidator, he shall give the official receiver such information and access to and facilities for inspecting the books and documents of the company, and generally any aid requisite or necessary for enabling that officer to perform his duties under this Decree.
427. (1) Subject to the provisions of this Decree, the liquidator of a company being wound up by the court shall, in the administration and distribution of the assets of the company among its creditors, have regard to directions given by resolution of the creditors or contributories at any general meeting, or by the committee of inspection; so however that directions given by the creditors or contributories at any general meeting shall, in case of conflict, override directions given by the committee of inspection.
(2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors or contributories by resolution either at the meeting appointing the liquidator or otherwise, may direct, or whenever requested in writing to do so by one tenth in value of the creditors or contributories as the case may be.
(3) The liquidator may apply to the court in the manner prescribed for directions in relation to any particular matter arising under the winding up.
(4) Subject to the provisions of this Decree, the liquidator shall use his own discretion in the management of the estate and its distribution among the creditors.
(5) Any persons aggrieved by an act or decision of the liquidator may apply to the court for such order in the premises as it thinks just; and the court may confirm, reverse, or modify the act or decision.
428. (1) Every liquidator of a company being wound up by the court shall, in such manner and at such times as the Commission directs, pay moneys received by him into the public fund of the Federation kept by the Commission under and for the purposes of this Decree and known as "the Companies liquidation Account", and the Accountant-General of the Federation shall furnish him with a certificate of receipt for the money so paid.
Provided that, if the committee of inspection satisfies the Commission that for the purpose of carrying on the business of the company or of obtaining advances, or for any other reason, it is for the advantage of the creditors or contributories that the liquidator should have an account with any bank, the Commission shall, on the application of the committee of inspection, authorise the liquidator to make his payments into and out of such bank, in Nigeria as the committee may select, and thereupon those payments shall be made in the prescribed manner.
(2) If the liquidator of a company being wound up as aforesaid, at any time retains for more than ten days an amount in excess of either 500 or, in any particular case, such other amount as the Commission may approve, and fails to satisfy the Commission as to the need for the retention beyond that time, the liquidator shall pay interest on the amount so retained in excess, at the rate of twenty per cent per annum, and shall be liable to -
(a) disallowance of the whole or such part of his remuneration as the Commission thinks fit; and
(b) removal from office,
and in addition, he shall be liable to pay any expenses occasioned by the retention.
(3) A liquidator of a company which is being wound up by the court shall not pay any sums received by him as liquidator into his private banking account.
429. (1) Every liquidator of a company being wound up by the court shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, send to the Commission an account of his receipts and payments as liquidator.
(2) The account shall be in duplicate in the prescribed form, and shall be verified by a statutory declaration in the prescribed form.
(3) The Commission shall cause the account to be audited, and for the purpose of the audit the liquidator shall furnish the Commission with such vouchers and information as the Commission may require, and the Commission may at any time require the production of, and may inspect, any books or accounts kept by the liquidator.
(4) When the account has been audited, one copy shall be filed and kept by the Commission, and the other copy shall be with the court and each shall be open to inspection by any creditor or other person interested, on payment of the prescribed fee.
(5) The Commission shall cause the account when audited or a summary thereof to be printed, and shall send a printed copy of the account or summary by post to every creditor and contributory.
430. Every liquidator of a company which is being wound up by the court shall, in the manner prescribed, keep proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor or contributory may subject to the control of the court, personally or by his agent inspect any such books.
431. (1) Where the liquidator of a company being wound up by the court has realised all the property of the company, or so much of it as may, in his opinion, be realised without needlessly protracting the liquidation and has distributed a final dividend, if any, to the creditors, and adjusted the rights of the contributories among themselves, and made a final return, if any, to the contributories, or has resigned, or has been removed from his office, the Commission shall, on the application of the liquidator, cause a report on the accounts of the liquidator to be prepared.
(2) The Commission shall consider the report referred to in subsection (1) of this section together with any objection that may be raised by any creditor, or contributory, or person interested against the release of the liquidator, and may grant or withhold the release as it deems fit subject nevertheless to an appeal to the court.
(3) If the release of a liquidator is withheld, the court may, on the application of any creditor, or contributory, or person interested make such order as it thinks just, charging the liquidator with the consequences of any act or default which he may have done or made contrary to his duty.
(4) An order of the Commission releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company, or otherwise in relation to his conduct as liquidator; but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.
(5) Where the liquidator has not previously resigned or been removed, his release shall operate as a removal of him from his office.
432. (1) The Commission shall take cognizance of the conduct of liquidators of companies which are being wound up by the court and if a liquidator does not faithfully perform his duties and duly observe all the requirement imposed on him by any enactment, or otherwise with respect to the performance of his duties, or if any complaint is made to the Commission by any creditor or contributory in regard thereto, the Commission shall inquire into the matter, and may take such action thereon as it thinks fit, including the direction of a local investigation of the books and vouchers of the liquidator.
(2) The Commission may at any time require the liquidator of a company being wound up by the court to answer any inquiry in relation to any winding up in which he is engaged and if the Commission thinks fit, it may apply to the court to examine the liquidator or any other person on oath concerning the winding up.
Committee of inspection, special manager, etc.
433. (1) Where a winding up order is made by the court, it shall be the business of the separate meetings of creditors and contributories summoned for the purpose of determining whether or not to apply to the court for an order appointing a liquidator in place of the official receiver, to determine whether or not application should be made to the court for the appointment of a committee of inspection to act with the liquidator, and who are to be members of the committee, if the appointment is made.
(2) The court may make any appointment and order required to give effect to any determination under this section and if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matters aforesaid, the court shall decide the difference and make any order it thinks necessary.
434. (1) A committee of inspection appointed under this Decree shall consist of creditors and contributories of the company or persons holding general powers of attorney from creditors or contributories in such proportions as may be agreed on by the meetings of creditors and contributories or as, in case of difference, may be determined by the court.
(2) A committee of inspection shall meet at the time or times appointed, so however that there shall be a meeting at least once in every month during its existence; but the liquidator or any member of the committee may convene a meeting as and when necessary.
(3) A meeting of a committee of inspection shall be deemed convened if a majority of members are present; but at any such meeting the committee may act by a majority of the members present.
(4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.
(5) If a member of the committee becomes bankrupt or compounds or arranges with his creditors or is absent from five consecutive meetings of the committee without leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.
(6) A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of contributories, if he represents contributories, of which seven days notice has been given, stating the object of the meeting.
(7) On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, reappoint the same or appoint another creditor or contributory to fill the vacancy:
Provided that if the 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 court and the court 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.
(8) The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.
435. Where in the case of winding up there is no committee of inspection, the Commission may, on the application of the liquidator, if he thinks fit, do any act or thing or give any direction or permission which is by this Decree authorised or required to be done or given by the committee.
436. (1) Where the official receiver becomes the liquidator of a company, whether provisionally or otherwise, he may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or contributories generally, require the appointment of a special manager of the estate or business of the company other than himself, apply to the court for an order appointing a special manager to act during such time as the court may direct, with such powers, including those of a receiver or manager, as may be entrusted to him by the court, and the court may make any order necessary.
(2) A special manager appointed under this section shall receive remuneration as fixed by the court, and shall give security and account in such manner as the Commission directs.
437. It is hereby declared that where application is made to the Court to appoint a receiver on behalf of the debenture holders or other creditors of a company being wound up by the court, the official receiver may be so appointed.
General powers of court in case of winding up by Court
438. (1) The court may at any time after an order for winding up, on the application either of a liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings either altogether or for a limited time, on such terms and conditions as the court thinks fit.
(2) The court may, at any time after an order for winding up, on the application either of the liquidator or a creditor, and after having regard to the wishes of the creditors and contributories, make an order directing that the winding up, ordered by the court, shall be conducted as a creditors voluntary winding up and if the court does so the winding up shall be so conducted.
(3) On any application under this section, the court may, before making an order, require the official receiver to furnish to the court a report with respect to any facts or matters which are in his opinion relevant to the application.
(4) A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission, which shall make a minute of the order in its books relating to the company.
(5) If default is made in lodging a copy of an order made under this section with the Commission as required by subsection (4) of this section, every officer of the company or other person who knowingly authorises or permits the default shall be guilty of an offence punishable by a daily default fine of 25.
439. (1) As soon as may be after making a winding up order, the court shall settle a list of contributories, and may rectify the register of members in all cases where rectification is required in pursuance of this Decree, and the court shall cause the assets of the company to be collected, and applied in discharge of its liabilities:
Provided that where it appears to the court that it will not be necessary to make calls on or adjust the rights of contributories, the court may dispense with the settlement of a list of contributories.
(2) In settling the list of contributories, the Court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.
440. The court may, at any time after making a winding up order require any contributory for the time being on the list of contributories and any trustee, receiver, banker, agent, or officer of the company to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to the liquidator any money, property, or books and papers in his hands, to which the company is prima facie entitled.
441. (1) The court may, at any time after making a winding up order make an order on any contributory for the time being on the list of contributories to pay, in the manner directed by the order; any money due from him or from the estate of the person whom he represents to the company, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Decree.
(2) The court making an order under this section -
(a) in the case of an unlimited company, may allow to the contributory by way of set-off any money due to him or to the estate which he represents from the company of any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit;
(b) in the case of a limited company, may make to any director or manager whose liability is unlimited or to his estate, the like allowance as in paragraph (a) of this subsection.
(3) In the case of any company, limited or unlimited, when all the creditors are paid in full, the money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.
442. (1) The court may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so made.
(2) In making a call under this section, the court shall take into consideration the probability that some of the contributories may fail, wholly or partially, to pay the call.
443. (1) The court may order any contributory, purchaser or other person from whom money is due to the company to pay it into the company's liquidation account referred to in section 428 of this Decree to the account of the liquidator instead of direct to the liquidator and any such order may be enforced in the same manner as if it had directed payment to the liquidator.
(2) Moneys and securities paid or delivered into the company's liquidation account in the event of a winding up by the court shall be subject in all respects to any relevant order of the court.
444. (1) An order made by the court on a contributory shall, subject to any right of appeal, be conclusive evidence that money, if any thereby appearing to be due or ordered to be paid, is due.
(2) All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings, except proceedings against the land of a deceased contributory, when the order shall be only prima facie evidence for the purpose of charging his land, unless his heirs or devises were on the list of contributories at the time the order was made.
445. The court may fix a time or times within which creditors are to prove their debts or claims, or be excluded from the benefit of any distribution made before those debts are proved.
446. The court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.
447. (1) The court may, at any time after making a winding up order, make such order for inspection of the books and papers of the company by creditors and contributories as the court thinks just, and any books and papers in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.
(2) Nothing on this section shall be taken as excluding or restricting any statutory rights of a government department or person acting under the authority of a government department.
448. The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the court thinks just.
449. (1) The Court may, at any time after the appointment of a provisional liquidator or the making of a winding up order, summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person who the court deems capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company.
(2) The court may examine on oath any person so summoned concerning the matters aforesaid either by word of mouth or on written interrogatories, and may reduce his answers to writing and require him to sing them.
(3) The court may require any person summoned under subsection (1) of this section, to produce books and papers in his custody or power relating to the company; but, where any such person claims a lien on books or papers produced by him, the production shall be without prejudice to the lien, and the court shall have jurisdiction in the winding up to determine all questions relating to that lien.
(4) If any person so summoned as aforesaid after being tendered a reasonable sum for his expenses, refuses to come before the court at the time appointed, not having lawful impediment (make known to the court at the time of its sitting and allowed by it), the court may cause him to be apprehended and brought before the court for examination.
450. (1) Where an order is made for winding up a company by the court and the official receiver makes a further report under this Decree stating that in his opinion a fraud has been committed by any person in the promotion or formation, of the company, or by any director or other officer of the company in relation to the company since its formation, the court may, after consideration of the report, direct that any person who has taken any part in the promotion or formation of the company, or has been a director or officer of the company, shall attend before the court on a day appointed by the court for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealing as director or officer thereof.
(2) The official receiver shall take part in the examination, and for that purpose may, if specially authorised by the Commission in that behalf, employ a legal practitioner.
(3) The liquidator, where the official receiver is not the liquidator and any creditor or contributory, may also take part in the examination either personally or by a legal practitioner. |