Section 356 — Power of liquidator to accept shares as consideration for sale of property of company

(1) Where—

(a) a company (in this section called the "transferor company") is
proposed to be, or is in the course of being, wound up altogether
voluntarily; and

(b) the whole or a part of its business or property is propos ed to be
transferred or sold to another body corporate, whether a company
within the meaning of this Act or not (in this section called "the
transferee company"),

the liquidator of the transferor company may, with the sanction of a special
resolution of that company conferring on the liquidator either a general authority or
an authority in respect of any particular arrangement—

(i) receive, by way of compensation or part compensation for the
transfer or sale, shares, policies, or other like interests in the
transferee company, for distribution among the members of the
transferor company; or

(ii) enter into any other arrangement whereby the members of the
transferor company may, in lieu of receiving cash, shares, policies,

or other like interests or in addition thereto, participate in the profits
of, or receive any other benefit from, the transferee company.

(2) Any sale or arrangement in pursuance of this section shall be binding
on the members of the transferor company.

(3) If any member of the transferor company who did not vote in favour
of the special resolution expresses his dissent therefrom in writing addressed to the
liquidator and left at the registered office of the company within seven days after
the passing of the special resolution, he may require the liquidator either-

(a) to abstain from carrying the resolution into effect; or

(b) to purchase his interest at a price to be determined by agreement or
by arbitration in the manner hereafter provided.

(4) If the liquidator elects to purchase the member ’s interest, the
purchase money shall be paid before the company is dissolved, and be raised by the
liquidator in such manner as may be determined by special resolution.

(5) A special resolution shall not be invali d for the purpose of this
section by reason only that it is passed before or concurrently with a resolution for
voluntary winding up or for appointing liquidators; but if an order is made within a
year for winding up the company by or subject to the supervision of the Court, the
special resolution shall not be valid unless it is sanctioned by the Court.

(6) The provisions of the Arbitration Act, 1940 (X of 1940), other than
those restricting the application of this Act in respect of the subject -matter of the
arbitration, shall apply to all arbitrations in pursuance of this section.

357. Duty of liquidator where company turns out to be insolvent.−(1)
Where the liquidator is of the opinion that the company will be unable to pay its
debts in full within the period stated in the directors’ declaration under section 351
he shall forthwith summon a meeting of the creditors and shall lay before the
meeting a statement of the assets and liabilities of the company and such other
particulars as may be specified.

(2) Where sub-section (1) becomes applicable, the creditors may in their
meeting held as aforesaid decide to continue with the existing liquidator or appoint
a different person as liquidator who has consented to act as such and in that case
the person so appointed shall be the liquidator.

(3) In the case of a different person being nominated, any director,
member of the company may, within fifteen days after the date on which the
nomination was made by the creditors, apply to the Court for an order either—

(a) directing that the person nominated as liquidator by the company
shall be liquidator instead of or jointly with the person nominated
by the creditors, or

(b) appointing some other person to be liquidator instead of the person
nominated by the creditors.

(4) A return of convening the creditors meeting as aforesaid along with
a copy of the notice thereof and a statement of assets and liabilities of the company
and the minutes of the meeting shall be filed with the registrar within ten days of
the date of the meeting.

(5) If the liquidator fails to comply with any of the requirements of this
section, he shall be liable to a penalty of level 1 on the standard scale.