9911796707
|
Home
Issues Involved:
1. Whether the existence of an English mortgage over the call money precludes the liquidator from including the name of the shareholder in arrears in the list of contributories. 2. Whether an assurance by the managing agents regarding the non-demand of uncalled share money affects the shareholder's liability. Issue-wise Detailed Analysis: 1. Existence of an English Mortgage Over Call Money: The primary issue revolves around whether the liquidator can include a shareholder in the list of contributories when an English mortgage exists over the call money. The company, Link Industries Ltd., incorporated in 1946, issued shares, and the respondent subscribed to 36,555 shares, paying Rs. 5 per share initially. The balance was to be paid upon a call by the directors. In 1949, the company borrowed Rs. 5 lakhs from the Industrial Finance Corporation of India, securing the loan with an English mortgage over its properties and uncalled share money. The mortgage deed assigned the company's right to receive the balance Rs. 5 per share to the Corporation. The directors made a call for the unpaid share money in 1953, but the respondent repudiated his liability. The company was later wound up, and the liquidator included the respondent in the list of contributories for the unpaid amount. The respondent argued that the mortgage assignment precluded the liquidator from making any claims. The court, however, held that the assignment of unpaid share money as security did not extinguish the company's right to the money. The company retained a legal interest (equity of redemption) in the call money. The liquidator, therefore, had the authority to call in the unpaid share money and include the respondent in the list of contributories. This view aligns with precedents where the liquidator, even in the presence of a mortgage, retains the right to make calls for unpaid share money for the purpose of liquidation. 2. Assurance by Managing Agents: The respondent claimed that there was an agreement with the managing agents that the uncalled share money would not be demanded until he could sell three-fourths of his shares at a profit. Balakrishna Aiyar J. found it probable that such an assurance was given but did not decide on its binding nature on the company. The court remanded this issue for further examination to determine whether such an assurance, if proven, would exonerate the respondent from paying the unpaid share money. This aspect requires a final decision by the judge exercising jurisdiction over company matters. Conclusion: The judgment concluded that the liquidator could include the respondent in the list of contributories despite the English mortgage. However, the issue of the alleged assurance by the managing agents was remanded for further determination. The costs of the appeal were to abide by the final result of this determination.
|
