39. Committee of inspection

(1) The Tribunal may, at the time of making an order for the winding up of an LLP or at any time thereafter, direct that there shall be appointed a committee of inspection (hereafter referred to as the Committee) to act with the liquidator.

(2) A Committee of inspection appointed shall consist of such number of members not exceeding twelve, as the Tribunal may order, being creditors and partners of the LLP or persons holding general or special powers of attorney from creditors or partners in such proportions as may be agreed on by the meeting of creditors and parties or in case of difference of opinion be determined by the Tribunal.

(3) The Liquidator shall convene a meeting of partners and creditors, if any, (as ascertained from the books and documents of the LLP) within thirty days from the date of order of winding up for enabling the Tribunal to determine the persons who may be members of the committee of inspection.

(4) The Committee shall meet at such times as it may from time to time appoint and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.

(5) The quorum for a meeting of the committee shall be one-third of the total number of the members, or two, whichever is higher.

(6) The Committee may act by a majority of its members present at a meeting, but shall not act unless a quorum is present.

(7) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

(8) If a member of the committee is adjudged an insolvent, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the Committee without the leave of those members who, together with himself, represent the creditors or partners, as the case may be, his office shall become vacant.

(9) A member of the Committee may be removed at a meeting of creditors if he represents creditors, or at a meeting of partners if he represents partners, agreed by majority.

(10) On a vacancy occurring in the Committee, the liquidator shall forthwith summon a meeting of creditors or of partners, as the case may require, to fill the vacancy; and the meeting may, by resolution, re-appoint the same, or appoint another, creditor or partner to fill the vacancy:

Provided that if the liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled, he may apply to the Tribunal and the Tribunal may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order.

(11) The continuing members of the Committee, if not less than two, may act notwithstanding any vacancy in the committee.

(12) As soon as possible after the holding of the said meetings, the Liquidator shall report the result thereof to the Tribunal for further directions.

(13) An application by the Liquidator for an order that a vacancy occurring in the Committee shall not be filled, shall be made upon a notice to the remaining members of the Committee and such other persons as the Tribunal may direct.

(14) Neither the Liquidator nor any member of the Committee shall, while acting as liquidator or member of such Committee in any winding-up, either directly or indirectly, by himself or any employer, partner, clerk, agent, servant or relative, become purchaser of any part of the LLP’s assets or be entitled to derive any profit from any transaction arising out of the winding up except by leave of the Tribunal and any purchase made contrary to the provisions of this rule may be set aside by the Tribunal on the application of the Liquidator or of a creditor or partner, as the case may be, and the Tribunal may make such order as to costs, as it may think fit.

(15) Where the sanction of the Tribunal to a payment to a member of the Committee of Inspection for services rendered by him in connection with the administration of the LLP’s assets is obtained, the order of the Tribunal shall specify the nature of the services, and such sanction shall only be given where the service performed is of a special nature:

Provided that except by the express sanction of the Tribunal, no remuneration shall be paid to a member of the Committee for services rendered by him in the discharge of the duties attaching to his office as a member of such Committee.