Section 40: Appointment of liquidator after cancellation of registration of a society.

(1) Where the registration of a society is cancelled by an order under section 38 of this Act, the Director may appoint a suitable person, subject to his direction and control, to be the liquidator of the society.
(2) A liquidator appointed under subsection (1) of this section shall subject to the guidance and control of the Director and to any limitation imposed by the Director by an order made under section 47 of this Act, have powers to-
(a) decide, subject to any bye-laws defining the liability of members, the contribution to be made by present and past members or by the estate of deceased members of the society to its assets;
(b) appoint a day by notice in the Federal or State Gazette before which creditors whose claims are not already recovered in the books of the society shall state their claim for admission to be excluded from any distribution made before they have proved them;
(c) decide any question of priority which arises between creditors;
(d) refer a dispute to arbitration, and to institute in his name or office and defend suits and other legal proceeding on behalf of the society;
(e) decide by what person and in what proportion the costs of liquidation are to be borne;
(f) give such directions as to the collection and distribution of assets as may be necessary in the course of the winding up of the society;
(g) with the approval of the Director, compromise any claim by or against the society;
(h) call such general meetings of members as may be necessary for the proper conduct of the liquidation, giving not less than fourteen days of notice for every such meeting;
(i) take possession of the books, documents and assets of the society;
(j) sell the property of the society where necessary;
(k) carry on the business of the society as far as may be necessary for winding it up beneficially, provided that he shall not for this purpose be entitled to grant any loan;
(l) arrange for the distribution of the assets of the society in the convenient manner when a scheme of distribution has been approved by the Director.