Sections 30 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Before the Act, the profession's body was a company called the Institute of Cost and Works Accountants, registered under company law. Chapter VIII (sections 30 to 32) closed that company on the commencement of the Act, passed all its assets, liabilities, contracts and pending cases to the new statutory Institute, and moved its staff across. These are historical provisions, but they explain terms such as "dissolved company" that still appear in sections 2, 4 and 5. The Act was called the Cost and Works Accountants Act, 1959 until 10 May 2022.
On the commencement of the Act, the company called the Institute of Cost and Works Accountants was dissolved and members' rights in it were extinguished. All its assets and liabilities passed to the Institute, its contracts and legal proceedings continued against or in favour of the Institute, and employees who joined before 1 September 1958 and were still employed became employees of the Institute on the same terms, with no right to compensation for the transfer.
How this article reads the Act
This article follows the Act as printed by the Institute (as amended in 2011), read with the 2022 Amendment Act to the extent brought into force by S.O. 2184(E) dated 10 May 2022. The 2022 Act did not amend sections 30 to 32; its only touch on this subject is in the definition of "dissolved company" in section 2(1)(d), where the figures "1956" were omitted. Later amendments and notifications should be checked.
A note on old law. Section 30 and the heading of Chapter VIII name the Companies Act, 1956 (1 of 1956), and section 32(2) names the Industrial Disputes Act, 1947 (14 of 1947), as printed. Check current law for what has replaced or amended those Acts; this article takes the references as printed and names no replacement.
Section 30: dissolution of the old company
On the commencement of the Act:
- Clause (a): the company known as the Institute of Cost and Works Accountants, registered under the Companies Act, 1956, shall be dissolved. Thereafter no person may make, assert or take any claims, demands or proceedings against the dissolved company, or against any officer of it in his capacity as such officer, except so far as necessary for enforcing the provisions of the Act.
- Clause (b): the right of every member to or in respect of the dissolved company is extinguished, and thereafter no member of that company may make, assert or take any claims, demands or proceedings in respect of that company except as provided in the Act.
The two clauses close the old company from both sides. Outsiders cannot pursue it, and its members cannot claim from it. What replaced it is the Institute under section 3, a body corporate made up of the persons on the Register of members; see our article on sections 1 and 3.
Section 31: transfer of assets and liabilities
Section 31(1). On the commencement of the Act, all the assets and liabilities of the dissolved company were transferred to and vested in the Institute.
Section 31(2): what the words include.
| Term | Deemed to include |
|---|---|
| Assets | All rights and powers, and all property, movable or immovable, including cash balances, reserve funds, investments, deposits and all other interests and rights in or arising out of the property in the dissolved company's possession, and all books of accounts or documents |
| Liabilities | All debts, liabilities and obligations of whatever kind then existing |
Section 31(3): contracts. All contracts, debts, bonds, agreements and other instruments of any nature to which the dissolved company was a party, subsisting or having effect immediately before the commencement, have full force and effect against or in favour of the Institute and may be enforced as fully and effectively as if the Institute had been a party instead.
Section 31(4): pending proceedings. If any suit, appeal or other legal proceeding by or against the dissolved company was pending on commencement, it does not abate, is not discontinued and is not prejudicially affected by the transfer or by anything in the Act. It may be continued, prosecuted and enforced by or against the Institute in the same manner and to the same extent as it could have been by or against the dissolved company if the Act had not been passed.
Taken together, section 31 makes the Institute the successor in full to the old company. Nothing was lost in the transfer: not property, not debts, not contracts, not litigation.
Section 32: employees of the dissolved company
Section 32(1). Every person employed in the dissolved company prior to the 1st day of September, 1958, and still in its employment immediately before the commencement of the Act:
- becomes an employee of the Institute from commencement;
- holds his office or service by the same tenure and on the same terms and conditions, with the same rights and privileges as to pension and gratuity, as he would have held under the dissolved company if the Act had not been passed; and
- continues so unless and until his employment in the Institute is terminated or until his remuneration, terms and conditions are duly altered by the Institute.
Section 32(2). Notwithstanding anything in the Industrial Disputes Act, 1947 or any other law for the time being in force, the transfer of the services of any employee of the dissolved company to the Institute does not entitle the employee to compensation under that Act or other law, and no such claim shall be entertained by any court, tribunal or other authority.
Employees who joined on or after 1 September 1958 are not mentioned in section 32(1). The Act is silent on them in this section, so their position depends on other provisions or arrangements.
Why these sections still matter
- Definitions. Section 2(1)(d) defines the "dissolved company" as the Institute of Cost and Works Accountants registered under the Companies Act. The 2022 Act omitted "1956" from that definition.
- Registration. Sections 4(1)(i), 5(3) and 5(4) refer to persons who were associates or fellows of the dissolved company. See our article on sections 4 and 5.
- Continuity. An agreement or a pending claim traced back to the pre-1959 body is enforced by or against the Institute as the successor.
A short illustration
Suppose a lease signed by the old company in 1957 for premises still used by the Institute was subsisting immediately before the commencement. Under section 31(3) it continues in full force in favour of the Institute, which may enforce it as if it had signed. And a clerk who joined the old company in 1955 and was still employed at commencement became an employee of the Institute on the same terms as to pension and gratuity under section 32(1), and could not claim compensation under the Industrial Disputes Act, 1947 for the transfer, as printed in section 32(2).
A body that is looking at succession, a transfer of undertaking or the continuity of contracts and staff when one entity replaces another can use legal consultation to understand how a statute-based transfer works.
The same rule for chartered accountants
For the incorporation of the chartered accountants' Institute, see Sections 1 to 3 of the Chartered Accountants Act, 1949. Chapter VIII here concerns the cost accountants' Institute and the company that preceded it.
Need help with succession or transfer questions?
If you are dealing with the continuity of contracts, staff or claims when one body replaces another, our legal consultation service can help you read statutes like sections 30 to 32 and your own documents together.
Key takeaways
- The old company, the Institute of Cost and Works Accountants, was dissolved on commencement of the Act.
- Its assets and liabilities vested in the Institute, and its contracts and legal proceedings continued by or against the Institute.
- Employees who joined before 1 September 1958 and were still employed became the Institute's employees on the same terms.
- No compensation was payable for that transfer under the Industrial Disputes Act, 1947 or other law, as printed.
- The sections name old laws as printed; check current law.
Read next
- Sections 29A to 29D: the Quality Review Board
- Sections 33 to 36A: Coordination Committee, directions and protection
- Sections 1 and 3: short title and incorporation of the Institute
Disclaimer: Based on the Cost and Works Accountants Act, 1959 (now the Cost Accountants Act, 1959) as printed by the Institute of Cost Accountants of India (as amended in 2011), read with the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2022 to the extent brought into force by S.O. 2184(E) dated 10 May 2022, as consulted on 3 October 2026. Regulations, rules, later amendments and commencement notifications should be checked. This article is general information, not legal advice; check the official text before acting.