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Issues:
- Suit for recovery of money for unpaid shares by a liquidator of a private limited liability company. - Barred by Limitation Act, 1908. - Authority of the liquidator to sue. - Consent of directors required for filing the suit. - Duty of directors to sell forfeited shares. - Claim for interest from date of forfeiture to date of suit. Analysis: The judgment involves a defendant's appeal in a suit by a liquidator of a private limited liability company seeking recovery of money for unpaid shares. The defendant was a signatory to the memorandum of association and had not fully paid up the amount due on his share. The company forfeited the defendant's share on March 22, 1926, and a liquidator was appointed on May 9, 1928, who then filed a suit on March 16, 1929, for recovery of the outstanding amount and interest. The first issue raised was regarding the bar under Article 112 of the Limitation Act. The defendant argued that the suit was time-barred, but the court held that since the forfeiture occurred on March 22, 1926, the suit was within the limitation period. The court relied on the case law to support its decision, emphasizing that the suit was filed within three years from the date of forfeiture, as per Article 115 of the Limitation Act. The second issue addressed was the authority of the liquidator to sue. The defendant contended that the liquidator had no right to sue as the resolution appointing the liquidator did not explicitly grant the power to institute suits. However, the court invoked Section 207 of the Indian Companies Act, emphasizing that the law provides inherent powers to the liquidator, and there was no express prohibition against filing suits in the resolution. Another issue raised was the requirement of obtaining consent from directors before instituting the suit. The court dismissed this argument, stating that the statutory rights of the liquidator to sue were not contingent upon directorial consent, especially when there was no response from the directors within a reasonable time frame. The duty of the directors to sell forfeited shares was also brought up as a ground for defense. However, the court rejected this contention, noting that the profitability of the company in 1926 did not impose an obligation on the directors to sell the shares, especially considering it was raised for the first time in the second appeal. Lastly, the court addressed the claim for interest from the date of forfeiture to the date of the suit. The court ruled that no interest was claimable post-forfeiture in the absence of a contractual or legal provision for the same. The court modified the decree of the lower appellate court, restoring the decree of the court of first instance and directed costs to be paid and received accordingly.
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