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Issues:
1. Application under sections 184 and 160 of the Indian Companies Act for inclusion of heirs of a deceased individual as contributories of a company. 2. Determination of the legal status of a subscriber to the memorandum of association who failed to pay for the shares and was subsequently removed as a director. Analysis: The judgment involves an application under sections 184 and 160 of the Indian Companies Act, where the Official Liquidator of a company sought to include the heirs of a deceased individual, Syed Alay Nabi, as contributories of the company. Syed Alay Nabi had signed the memorandum of association and subscribed for 50 shares in the company. Despite signing the prospectus and a consent to become a director, he failed to remit the application money due, leading to a series of correspondences from the managing agents regarding the outstanding payment. The company eventually informed Syed Alay Nabi that he was no longer a director and later stated that he had ceased to be a member of the company. However, the court held that mere failure to pay for the shares did not constitute a repudiation of the contract, and Syed Alay Nabi remained a member until the company accepted a surrender of the shares or he transferred them to another party as per the articles of association. The court rejected the argument that Syed Alay Nabi had repudiated the contract by failing to pay for the shares, emphasizing that there was no evidence of repudiation, only a failure to fulfill the payment obligation. The court highlighted that the legal position was clear: a subscriber to the memorandum of association continues to be a member until the company validly accepts a surrender of the shares or the subscriber pays for and transfers the shares to someone else. Despite the misunderstanding by the managing agents and Syed Alay Nabi himself that he had ceased to be a member, the court clarified that legally, he still retained his membership status in the company. Consequently, the court ordered the inclusion of Syed Alay Nabi's heirs as contributories of the company since, if alive, he would have been listed as such. The court acknowledged the misunderstanding that led to the belief that Syed Alay Nabi was no longer a member but emphasized the legal obligation to include his heirs as contributories. Additionally, the court declined to order the payment of interest on the outstanding amounts, considering the circumstances of the case. Ultimately, the application under sections 184 and 160 of the Indian Companies Act was granted, and the heirs of Syed Alay Nabi were directed to be included in the list of contributories.
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