1947 (3) TMI 22 - HC - Companies Law

Summary

Issues:
1. Whether the applicant's name should be removed from the list of contributories.
2. Interpretation of the terms "heir and legal representative" in the context of liability of a contributory.
3. Application of Sections 160 and 158 of the Companies Act in determining contributories.
4. Whether all heirs and legal representatives need to be included in the list of contributories.

Detailed Analysis:
1. The case involves a dispute regarding the inclusion of the applicant's name in the list of contributories for shares held by the late P. Rajagopalachari. The applicant seeks the removal of his name from the list.

2. The interpretation of the terms "heir and legal representative" is crucial in determining the liability of the applicant as a contributory. The applicant argues that he is not the heir or legal representative of P. Rajagopalachari. However, the court rejects this argument and holds that the wider meaning of these terms should be applied in the present case.

3. Sections 160 and 158 of the Companies Act play a significant role in deciding who should be considered as contributories. Section 158 defines a contributory as every person liable to contribute to the company's assets, while Section 160(1) specifies that the legal representatives and heirs of a deceased contributory become contributories themselves. Based on these provisions, the court concludes that the applicant and his brothers are liable as contributories.

4. The court addresses the argument that since Section 160 makes the heirs of legal representatives contributories collectively, the applicant, being one of several legal representatives, should not be included in the list. However, the court rules that this issue may be more relevant during enforcement proceedings and not in determining the initial inclusion of the applicant's name in the list of contributories. The court also cites a previous decision to support the discretion of the official liquidator in not including all heirs and legal representatives in the list.

In conclusion, the court upholds the decision to include the applicant's name in the list of contributories based on the broader interpretation of the terms "heir and legal representative" and the provisions of the Companies Act. The court emphasizes that the applicant and his brothers are liable as contributories and that the issue of collective liability of heirs and legal representatives may be addressed at a later stage.