9911796707
|
Home
Issues Involved:
1. Forfeiture of shares and liability to contribute under section 156(1)(i) of the Companies Act. 2. Claim barred by Article 112, Limitation Act. 3. Liability of representatives of deceased shareholders limited to the extent of the assets received. Issue-wise Detailed Analysis: 1. Forfeiture of Shares and Liability to Contribute: The appellants contended that their shares were forfeited more than a year before the commencement of the winding-up, thus exempting them from liability under section 156(1)(i) of the Companies Act. The shares in question were Rs. 100 each, payable in four installments of Rs. 25. The first two installments were paid, and a resolution was made on 4th February 1920, for the third call, but no subsequent action followed. On 9th September 1922, a notice was issued for the third call, warning of forfeiture in case of non-payment. A critical notice dated 1st September 1923, stated that failure to pay within six weeks would result in forfeiture as per the Companies Act. The court examined whether the shares were indeed forfeited. The articles of association were not produced, so it was assumed that Table A from Schedule I of the Companies Act applied. Article 24 of Table A requires a notice for payment, Article 25 mandates a payment deadline, and Article 26 stipulates that shares can only be forfeited by a resolution of the directors if payment is not made. The court found no resolution of forfeiture in the minute-book, thus concluding that the shares were not forfeited. The appellants cited Wollaston's case and Knight's case to argue that the notice itself effectuated forfeiture. However, the court distinguished these cases, noting that in Wollaston's case, the notice included a resolution of forfeiture, and in Knight's case, subsequent actions confirmed the forfeiture. In the present case, no such resolution or subsequent actions were evident. Therefore, the court held that the shares were not forfeited and the appellants were liable to contribute. 2. Claim Barred by Article 112, Limitation Act: The court held that once it is established that the appellants are contributories, the claim is not barred by Article 112 of the Limitation Act. The court cited precedents such as Jagannath Parshad v. U.P. Flour and Oil Mills Co., Ltd., and others, which clarified that the liability to contribute is a new liability arising from the winding-up process and not a pre-existing debt to the company. This distinction means that the limitation period for calls made before winding-up does not apply to the liquidator's claim for contribution. 3. Liability of Representatives of Deceased Shareholders: The court addressed the liability of Anant Prasad Varma and Raghubans Sahay, representatives of deceased shareholders Harbans Lal and Bansi Lal, respectively. According to section 184 of the Companies Act and general law, these representatives are only liable to the extent of the assets of the deceased shareholders that came into their hands. The court modified the District Judge's order to reflect this limitation of liability. Conclusion: The appeals were dismissed with costs, except for the modification regarding the liability of representatives of deceased shareholders. The court affirmed that the shares were not forfeited, the claim was not barred by limitation, and the representatives' liability was limited to the assets received.
|
