1961 (4) TMI 22 - HC - Companies Law

Summary

Issues Involved:

1. Validity of the call made by the Hindustan Petroleum Co. Ltd.
2. Payments made towards the call.
3. Adjustment of advance payments towards the call money.
4. Interest chargeable on the unpaid call amount.
5. Relief sought by the appellants.

Detailed Analysis:

1. Validity of the Call:

The primary issue was whether a valid call of 75% of the share money was made by the Hindustan Petroleum Co. Ltd. during the board meeting on April 30, 1953. The appellants argued that the resolution did not fix the time of payment, was discriminatory, and no notice was given to them. The court found that the resolution did not specify the time of payment, which is imperative under Article 17 of the Articles of Association. This omission rendered the call invalid. Additionally, the resolutions were discriminatory as they imposed different call amounts on directors and ordinary shareholders, without authorization under Section 49 of the Indian Companies Act, 1913. The court also noted the absence of proof regarding the issuance and receipt of notice for the call, further invalidating it.

2. Payments Made Towards the Call:

The court examined the payments made by each appellant. Major Teja Singh and Gurinder Singh claimed to have made advance payments of Rs. 5,000 each, which were not accounted for. The court accepted Gurinder Singh's claim, as the liquidator admitted the payment. For Major Teja Singh, the court held that the Rs. 5,000 paid was indeed an advance towards the call and should be credited accordingly. The claims of Raja Maheshinder Singh, Hardam Singh, and Gurbakshish Singh for additional payments were not substantiated with sufficient evidence and were thus rejected.

3. Adjustment of Advance Payments:

The court found that advance payments made by Major Teja Singh and Gurinder Singh should be adjusted towards the call money. This adjustment was allowed for Gurinder Singh by the company judge, and the court upheld this decision. For Major Teja Singh, the court concluded that his advance payment of Rs. 5,000 should be credited against the call amount, reducing his liability to Rs. 10,000.

4. Interest Chargeable on the Unpaid Call Amount:

The court upheld the company judge's decision that each appellant was liable to pay interest at the rate of 9% per annum on the unpaid call amount. This interest was deemed applicable from the date of the resolution to the date of payment.

5. Relief:

The court dismissed the appeals of Raja Maheshinder Singh, Hardam Singh, and Gurbakshish Singh, holding them estopped from questioning the validity of the call due to their participation in the resolution. Their objections were dismissed with costs. However, the appeals of Major Teja Singh and Gurinder Singh were accepted. The court ruled that there had been no valid call against them under the resolutions, and thus, they could not be included in the list of contributories. The court fixed the counsel's fee in each appeal at Rs. 60.

Conclusion:

The judgment comprehensively addressed the validity of the call, payments made towards it, the adjustment of advance payments, interest liability, and the relief sought by the appellants. It upheld the objections of Major Teja Singh and Gurinder Singh, excluding them from the list of contributories, while dismissing the appeals of Raja Maheshinder Singh, Hardam Singh, and Gurbakshish Singh, holding them liable for the calls made under the resolution.