1937 (10) TMI 5 - Commissioner - Companies Law

Summary

Issues:
1. Liability of signatories to the Memorandum of Association of a Company.
2. Surrender of shares by shareholders and acceptance by the Directors.
3. Applicability of Section 156 of the Companies Act.
4. Inclusion of a shareholder in the list of contributories without proper notice.

The judgment deals with an appeal under section 202 of the Companies Act regarding the liability of signatories to the Memorandum of Association of a Company. The learned Judge held that signatories are deemed to have agreed to become members of the Company upon registration and are liable unless all share capital has been allotted to others. The appellants argued they surrendered their shares, but failed to prove acceptance by the Directors as required by the Articles of Association. The court found no evidence of a valid surrender and rejected the appellants' claim of freedom from liability.

The judgment also addresses the applicability of Section 156 of the Companies Act. The appellants claimed exemption under this section, but the court ruled that they did not qualify as 'past members' who had ceased membership for one year before winding up. The court dismissed this argument for lack of merit.

Furthermore, the judgment discusses the inclusion of a shareholder in the list of contributories without proper notice. The appellant contended that one shareholder was wrongly included without being served with notice. The court found no evidence in the record to support this claim and dismissed it, stating there was no substance to the appeal. The court ultimately dismissed the appeal with costs, upholding the decision of the lower court regarding the liability of the signatories and the inclusion of shareholders in the list of contributories.