Section 285 of Companies Act, 2013 – Settlement of list of contributories and application of assets

SECTION 285. SETTLEMENT OF LIST OF CONTRIBUTORIES AND
APPLICATION OF ASSETS

[Effective from 15th December, 2016]

(1) As soon as may be after the passing of a winding up order by the Tribunal, the Tribunal shall settle a list of contributories, cause rectification of register of members in all cases where rectification is required in pursuance of this Act and shall cause the assets of the company to be applied for the discharge of its liability:

Provided that where it appears to the Tribunal that it would not be necessary to make calls on or adjust the rights of contributories, the Tribunal may dispense with the settlement of a list of contributories.

(2) In settling the list of contributories, the Tribunal shall distinguish between those who are contributories in their own right and those who are contributories as being representatives of, or liable for the debts of, others.

(3) While settling the list of contributories, the Tribunal shall include every person, who is or has been a member, who shall be liable to contribute to the assets of the company an amount sufficient for payment of the debts and liabilities and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, subject to the following conditions, namely:—

(a)   a person who has been a member shall not be liable to contribute if he has ceased to be a member for the preceding one year or more before the commencement of the winding up;

(b)   a person who has been a member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;

(c)   no person who has been a member shall be liable to contribute unless it appears to the Tribunal that the present members are unable to satisfy the contributions required to be made by them in pursuance of this Act;

(d)   in the case of a company limited by shares, no contribution shall be required from any person, who is or has been a member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as such member;

(e)   in the case of a company limited by guarantee, no contribution shall be required from any person, who is or has been a member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up but if the company has a share capital, such member shall be liable to contribute to the extent of any sum unpaid on any shares held by him as if the company were a company limited by shares.

Applicable Rules

Companies (Winding Up) Rules, 2020

[Effective from 1st April, 2020]

Rule 30. Settlement of list.—On the date appointed for the settlement of the list referred to in rule 29, the Tribunal shall hear any person who objects to being settled as a contributory or as a contributory in such character or for such number of shares or extent of interest as is mentioned in the said list, and after such hearing, shall finally settle the list in accordance with sub-section (1) of section 285 and the aforesaid list when settled shall be certified by the Tribunal under its seal and shall be in Form WIN 20.

Rule 31. Notice of settlement to contributories.—(1) Upon the receipt of the settled list of contributories, as certified by the Tribunal of rule 30 , the Company Liquidator shall within a period of 7 days issue notice to every person placed on the said list of contributories, stating in what character and for what number of shares or interest he has been placed on the said list, what amount has been called up and what amount paid up in respect of such shares or interest and in the notice he shall inform such person that any application for the removal of his name from the aforesaid list or for a variation of the said list, must be made to the Tribunal within fifteen days from the date of service on the contributory of such notice, and such notice shall be in Form WIN 21 and shall be sent to each person settled on the said list by pre-paid registered post or speed post at the address mentioned in the said list.

(2) An affidavit of service relating to the dispatch of the notice to the contributories under this rule shall be sworn by the person who dispatched the said notice and shall be filed in Tribunal within seven days of the said dispatch of notice and such affidavit shall be in Form WIN 22.

Rule 32. Supplemental list of contributories.—The Tribunal may add to the list of contributories by a supplemental list or lists and any such addition shall be made in the same manner in all respects as the settlement of the original list.

Rule 33. Variation of list.—Save as provided in rule 31, the list of contributories shall not be varied, and no person settled on the list as a contributory shall be removed from the list, or his liability in any way varied, except by order of the Tribunal and in accordance with such order.

Rule 34. Application for rectification of list.—If after the settlement of the list of contributories, the Company Liquidator has reason to believe that a contributory who had been included in the provisional list has been improperly or by mistake excluded or omitted from the list of contributories as finally settled or that the character in which or the number of shares or extent of interest for which he has been included in the list as finally settled or any other particular contained therein, requires rectification in any respect, he may, upon notice to the contributory concerned, apply to the Tribunal for such rectification of the list as may be necessary, and the Tribunal may on such application, rectify or vary the list as it may think fit.

Rule 35. List of contributories consisting of past members.—It shall not be necessary to settle a list of contributories consisting of the past members of a company, unless so ordered by the Tribunal and where an order is made for settling a list of contributories consisting of the past members of a company, the provisions of these rules shall apply to the settlement of such list in the same manner as they apply to the settlement of the list of contributories consisting of the present members.