Section 33 of the Societies Act provides a legal framework for the orderly dissolution and liquidation of certain societies.
This provision empowers the Cabinet Secretary to appoint a liquidator for societies that are deemed unlawful, have faced registration cancellations, or have ceased to exist for various reasons.
In this article, we explore the key aspects of Section 33, the role of the liquidator, and the procedures involved in the winding-up process.
Section 33: Liquidation of Certain Societies
Cabinet Secretary’s Authority
Section 33(1) grants the Cabinet Secretary the authority to issue an order, published in the Gazette, appointing a person as the liquidator of a society meeting specific criteria. These criteria include the society being deemed unlawful, having its registration canceled, or ceasing to exist under the provisions outlined in Part III of the Societies Act.
Appointment of Liquidator: The Cabinet Secretary, through the order, appoints a suitable individual to act as the liquidator. This person assumes the responsibility of overseeing the winding-up process.
Vesting of Property: Simultaneously, the Cabinet Secretary vests in the appointed liquidator all property, both movable and immovable, belonging to the society in question. This step ensures that the liquidator has control over the society’s assets for the purpose of the orderly liquidation process.
Commencement of Liquidation: Upon the publication of the order in the Gazette, the liquidator is required, as outlined in Section 33(2), to promptly initiate the liquidation proceedings. This involves the comprehensive examination and settlement of the society’s affairs.
Key Aspects of the Liquidation Process:
Assessment of Assets and Liabilities: The liquidator undertakes a thorough assessment of the society’s assets and liabilities. This involves identifying and valuing both movable and immovable property.
Settlement of Debts: Outstanding debts and liabilities are settled using the assets of the society. The liquidator ensures that creditors are paid according to the priorities established by relevant laws.
Distribution of Surplus Assets: Any surplus assets remaining after settling debts are distributed among the society’s members or, if applicable, transferred to a similar society or a charitable cause, as determined by legal provisions.
Finalization of Legal Procedures: The liquidator concludes the winding-up process by fulfilling all legal requirements, including the submission of necessary documentation to regulatory authorities.
Dissolution and Cessation of Existence: Once all aspects of the liquidation are completed, the society is formally dissolved, and its existence ceases as per the provisions of the Societies Act.
Conclusion
Section 33 of the Societies Act establishes a systematic mechanism for the dissolution and liquidation of societies that have been deemed unlawful, had their registration canceled, or ceased to exist. By vesting authority in the Cabinet Secretary to appoint a liquidator and providing a clear framework for the distribution of assets, this section ensures an orderly and lawful conclusion to the existence of such societies.
The appointment of a liquidator and the subsequent processes outlined in Section 33 are crucial in upholding legal standards and safeguarding the interests of society members and stakeholders during the winding-up proceedings.
