2. When shares are surrendered as a short cut to forfeiture of shares when all the circumstances for forfeiture have arisen. Reduction of capital in such a case shall be valid.
Provisions in the articles, for the acceptance of surrender of shares in all other cases except the above two, will be void.
A member validly surrendering his shares to the company can nevertheless be held liable as a list B contributory in the event of winding up of the company within twelve months of his surrender of shares. Court may order for the restoration of the plaintiff’s name in the Register of Members after lapse of any number of years if the surrender of shares is proved to be illegal and provided that the shares have not been reissued in the meantime or otherwise dealt with by the company.