18.
| (1) In any case where the Director is satisfied after examination by himself or by any officer authorized by him, of the affairs of any finance company, or upon information received from the company, that it is insolvent or is likely to become unable to meet the demands of its depositors or that its continuance in business is likely to involve loss to its depositors or creditors, the Director shall make a report accordingly to the Governor of the Central Bank of Sri Lanka for submission to the Board ; and if the Board, upon review of the fats and circumstances, is of opinion that action should be taken as hereinafter provided, the Board may make an order directing the company forthwith to suspend business and directing the Director to take charge of all books, records and assets of the company, and to take such measures as may be necessary to prevent the continuation, of business by the company. |
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| (2) Any director, manager, secretary or employee of a finance company or any other person having in his possession or custody any books, records or assets of the company, who falls to hand over the same to the Director or to an officer authorized by him, or any person who obstructs or resists the Director or an officer authorized by him from taking charge of any books, records or assets of the company or from taking such other measures as the Director may consider necessary to prevent the continuation of business by the company shall be guilty of an offence under the Act, |
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| (3) Notwithstanding anything in any other law, no action or proceeding may be instituted in any court for the purpose of securing the review or revocation of any order made in good faith under subsection (1) or in respect of any loss or damage incurred, or likely or alleged to be incurred by reason of such order. |
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| (4) An order made by the Board in respect of any finance company shall cease to have effect upon the expiration of a period of sixty days from the date on which it is made and it shall he the duty of the Board as soon as practicable and in any event before the expiration of such period to
| | (a) made order permitting the company to resume business, either unconditionally or subject to such condition as the Board may consider necessary in the public interest, or in the interest of the depositors and other creditors of the company; or | | |
| | (b) notify the finance company that it intends to cause the Director to make application as hereinafter provided to a competent court for the Winding up of the company,
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| (5) If the finance company has not made an application to the Supreme Court in accordance with section 43 or where the court has rejected the applicant of the finance company, made in accordance with that section the Director shrill make an application as hereinafter provided to a competent court for the winding up of the company. |
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| (6) During the period in which the business of a finance company is suspended under subsection (I), me Board may if it considers it in the public interest to do so meet any expenses connected with the administration of that company out of the funds of the Central Bank of Sri Lanka. |
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| (7) The competent court may, on any application made by the Director order the winding up of any finance company and accordingly the provisions of the Companies Act, No. 17 of 1982, relating to the winding up or companies subject to the supervision of court shall, mutatis mutandis, apply to the winding up of such company. |
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| (8) Where application is made for winding up of a per son or body of persons (other than a company) under this Act, the value of the assets and liabilities of such person or body of persons shall be ascertained in such, manner and upon such basis as the liquidator thinks fit. The competent court may at any time after making a winding up order authorize the liquidator to realise all assets and may require any person to pay, deliver, convey, surrender or transfer forthwith or within a specified time to the liquidator any money, property or books and other documents in his hands to which such person or body of persons is entitled. A scheme for the purpose of the winding up such person or body of persons shall be prepared by the liquidator and submitted for confirmation to the competent court and the winding up of such person or body of persons shall be carried out according to the scheme. |
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| (9) In any case where an order is made, whether in pursuance of an application under this section or otherwise for the winding up of a finance company, person or unincorporate body of persons (other than a company) then notwithstanding anything in any other written law. the Director or any person authorized in that behalf by the Board shall be appointed to be the liquidator for the purposes of such winding up. Where an order is made to wind up a person or body of persons other than a company the remuneration of a liquidator appointed hereunder and all costs, charges and expenses properly incurred in the winding up shall be payable in priority to all other claims, notwithstanding any other written law to the contrary, out of the assets of such person or body of persons being wound up. |
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| (10) Any costs, charges and expenses incurred in the winding up of a finance company may be paid out of the funds of the Central Bank of Sri Lanka where the Board considers it in the public interest to do so- |
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| (11) In any case where application is made by the Director as provided in subsection (4) for tile winding up of any finance company
| | (a) the company shall not carry on business during the pendency of the application, unless it is authorized so to do by the court and except in accordance with such conditions, if any as may be specified by the court; and | | |
| | (b) if the court is of opinion after such inquiry as it may consider necessary that the company is not insolvent, it may make a declaration permitting the finance company to resume business, either unconditionally or subject to such conditions as the court may consider necessary in the public interest or in the interest of the depositors and other creditors of the company. | | |
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| (12) Every order made by a competent court under this section shall be subject to an appeal to the Supreme Court and the provisions of the Civil Procedure Code relating to appeals in civil actions shall apply, mutatis mutandis, in the case of any appeal: |
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| (13) Every application to a competent court under this section shall be deemed to be a proceeding of the value of five thousand rupees. |
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| (14) In this section "competent court" in relation to any finance company means the District Court of Colombo or the District Court of the district in which the principal office in Sri Lanka of the finance company is maintained. |
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Sri Lanka Consolidated Acts