Page 341 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes set off is allowed for any money due to him as a member of the company in respect of any
dividend or profit; (b) if, in the case of a limited company, there is any director or manager
whose liability is unlimited, he shall have the same right of set off as described in (a)
above; (c) in the case of any company, whether limited or unlimited when all the creditors
have been paid in full, any money due on any account whether to a contributory from the
company may be allowed to him by way of set off against any subsequent call.
4. Payment into bank of moneys due to company (s.471): The court may order any
contributory, purchaser or other person from whom any money is due to the company to
pay the money into the public account of India in the Reserve Bank of India instead of to
the liquidator.
5. Power to exclude creditors not proving in time (s.474): The court may fix a time or times
within which creditors are to prove their debts or claims. In such a case, if the creditors fail
to establish their claims in time, they may be excluded from the benefit of any distribution
made.
6. Adjustment of rights of contributories (s.475): The court is empowered to adjust the right
of the contributories among themselves and distribute any surplus among the person
entitled thereto.
7. Power to order costs (s.476): The court may, in the event of assets being insufficient to
satisfy the liabilities, make an order for the payment out of the assets, of the costs, charges
and expenses incurred in the winding up, in such order of priority inter se as the Court
thinks just.
8. Power to summon persons suspected of having property of company, etc. (s.477): The court
may summon before it any officer of the company or person known or suspected to have
in his possession any property or books or papers of the company or known or suspected
to be indebted to the company. Any such person may be examined on oath. The court may
also require him to produce any books and papers in his custody or power relating to the
company; but where he claims any lien on books or papers produced by him, the production
must be without prejudice to that lien.
If any officer or person summoned, after being paid or tendered a reasonable sum for his
expenses, fails to appear before the court at the time appointed without any valid reason,
the court may cause him to be apprehended and brought before the court for examination.
9. Power to order public examination of promoter, directors etc. (s.478): Where the Official
Liquidator has made a report to the court, stating that in his opinion a fraud has been
committed by any person in the promotion or formation of the company, or by any officer
of the company since its formation, the court may direct that person or officer may appear
before the court and be publicly examined. Examination shall relate to the promotion or
formation or the conduct of the business of the company, or as to his conduct and dealings
as an officer thereof. Official liquidator, any creditor or contributory may take part in such
examination. The court may put such questions to the person examined as it thinks fit. The
person shall be examined on oath and must answer all such questions as the Tribunal may
put or allow to be put, to him. Notes of the examination must be taken in writing and must
be read over to or by and signed by the person examined and may thereafter be used in
evidence against him. Statement so recorded shall be open to the inspection of any creditor
or contributory at all reasonable times.

10. To order the appointment of a committee of inspection: (already discussed)
11. Power to arrest a contributory intending to abscond (s.479): At any time (either before or
after making a winding up order), the court may, on proof of probable cause for believing
that a contributory is about to quit India or otherwise to abscond or is about to remove or

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