Section 42 of the Co-operative Societies Act, 1912 - Winding-up
Section 42 deals with winding-up after cancellation of the registration of a society under Section 39 or Section 40. It authorises the Registrar to appoint a liquidator and specifies the liquidator's principal powers, the mechanism for appeals where provided by rules, enforcement of orders and the restriction on ordinary civil-court jurisdiction.
Updated: 21 September 2026
Meaning and scope of Section 42
In practical terms, winding-up is the statutory process for settling the affairs of a registered society after the relevant cancellation of registration. Under Section 42, the Registrar may appoint a competent person as liquidator. The liquidator can deal with litigation, contributions by members and past members, claims, priorities, liquidation costs, and the collection and distribution of the society's assets.
The section also gives the liquidator limited procedural powers comparable to those of a Civil Court for compelling attendance of witnesses and production of documents, so far as those powers are necessary for the winding-up. Where the rules provide an appeal from an order of the liquidator, the appeal lies to the Court of the District Judge.
Text of Section 42 - Winding-up
(1) Where the registration of a society is cancelled under section 39 or section 40, the Registrar may appoint a competent person to be liquidator of the society.
(2) A liquidator appointed under sub-section (1) shall have power -
(a) to institute and defend suits and other legal proceedings on behalf of the society by his name of office;
(b) to determine the contribution to be made by the members and past members of the society respectively to the assets of the society;
(c) to investigate all claims against the society and, subject to the provisions of this Act, to decide questions of priority arising between claimants;
(d) to determine by what persons and in what proportions the costs of the liquidation are to be borne; and
(e) to give such directions in regard to the collection and distribution of the assets of the society, as may appear to him to be necessary for winding-up the affairs of the society.
(3) Subject to any rules, a liquidator appointed under this section shall, in so far as such powers are necessary for carrying out the purposes of this section, have power to summon and enforce the attendance of witnesses and to compel the production of documents by the same means and, so far as may be, in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908).
(4) Where an appeal from any order made by a liquidator under this section is provided for by the rules, it shall lie to the Court of the District Judge.
(5) Orders made under this section shall, on application, be enforced as follows:-
(a) when made by a liquidator, by any Civil Court having local jurisdiction in the same manner as a decree of such Court;
(b) when made by the Court of the District Judge on appeal, in the same manner as a decree of such Court made in any suit pending therein.
(6) Save in so far as is hereinbefore expressly provided no Civil Court shall have any jurisdiction in respect of any matter connected with the dissolution of a registered society under this Act.
Key legal points
Appointment of liquidator
The statutory trigger in sub-section (1) is cancellation of registration under Section 39 or Section 40. Once that condition exists, the Registrar may appoint a competent person as liquidator.
Powers over claims and assets
Sub-section (2) places the administration of claims, priorities, member contributions, liquidation costs and distribution of assets within the liquidator's statutory functions.
Witnesses and documents
Sub-section (3) permits the liquidator, subject to the rules and to the extent necessary for Section 42, to compel witnesses and documents using means broadly corresponding to those available to a Civil Court under the Code of Civil Procedure, 1908.
Appeal and enforcement
An appeal to the District Judge exists where the applicable rules provide one. Orders of the liquidator may be enforced through a Civil Court having local jurisdiction in the manner stated in sub-section (5).
Bar of civil jurisdiction
Sub-section (6) excludes Civil Court jurisdiction in matters connected with dissolution except to the extent expressly preserved by Section 42. The precise effect should be considered with the applicable rules and any governing State or Union Territory legislation.
Historical amendment notes
The source text records historical local amendments affecting sub-sections of Section 42, including amendments formerly applicable to the Central Provinces and Berar and Uttar Pradesh. It also refers to inserted provisions such as Section 42A and historical Sections 42-B and 42-C in specified territories. These notes are retained as part of the legislative history; present-day local applicability should be verified under the law currently governing the concerned jurisdiction.
Official source
The official central text of the Co-operative Societies Act, 1912 can be checked on India Code.