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Interpretation of Section 156 and 158 of the Indian Companies Act regarding the liability of contributories in a voluntary liquidation. Analysis: The judgment involves the interpretation of Section 156 and 158 of the Indian Companies Act concerning the liability of contributories in a voluntary liquidation. The appellant, as the liquidator of a company in voluntary liquidation, sought an order against certain respondents who had not paid for their shares. The Court initially refused to make an order against the respondents, directing the liquidator to file suits instead. The key issue was whether the liquidator was entitled to make calls on the respondents for the amounts due without filing suits. The Court analyzed the provisions of Section 156 and 158, which state that every present and past member shall contribute to the company's assets to pay its debts and liabilities. The Court emphasized that a member can be required to pay the amount remaining unpaid on shares held by them, whether due to failure to pay on share allotment or for partly paid shares. The term "contributory" was defined, and the Court highlighted the power of the liquidator to settle a list of contributories and enforce calls under Section 212 and 216 of the Act. The judgment also referred to legal precedents and authoritative opinions to support the interpretation of the law. It cited Lindley's Law of Companies and previous cases such as In re Whitehouse & Co. and In re Hull and County Bank to emphasize the new liabilities imposed on shareholders in a winding-up scenario. The Privy Council's decision in Hansraj Gupta v. Asthana was also cited to establish the absolute liability of shareholders under Section 156 of the Act. Ultimately, the Court held that the liquidator was entitled to make calls on the respondents for the amounts claimed, provided they were rightly placed on the list of contributories. The judgment upheld the liquidator's right to enforce calls without the need to file suits immediately. However, the Court decided that the liquidator should proceed with the suits against the respondents, considering their raised defenses. The liquidator was awarded costs of the appeal from the company's assets, while the respondents were directed to bear their own costs.
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