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Issues Involved:
1. Limitation of the liquidator's claim under Article 112 of the Indian Limitation Act. 2. Applicability of Section 19(4) of the Displaced Persons (Debts Adjustment) Act. Detailed Analysis: 1. Limitation of the Liquidator's Claim: The primary issue in the appeal was whether the liquidator's claim was barred by limitation under Article 112 of the Indian Limitation Act. The company's call on its shareholders was payable on August 7, 1947, and the petition for compulsory winding up was presented on October 1, 1953. The appellants argued that the three-year period prescribed by Article 112 had expired, thus barring the liquidator's claim. The learned liquidation judge concluded that the liability of a member to contribute under Section 156 of the Indian Companies Act is ex lege and not ex contractu, meaning it arises by statute due to the member's name appearing on the register of members. This liability persists even if the calls are barred by limitation when the winding-up order is made. The court supported this view by citing decisions such as Vaidiswara Ayyar v. Siva Subramania Mudaliar, Mahomed Akbar Abdulla v. Official Liquidator, East Bengal Sugar Mills Ltd., In re, and Webb v. Whiffin. The court noted that the expiry of the limitation period does not extinguish the liability itself but merely bars the remedy. This principle is consistent with the view that limitation laws pertain to the domain of adjective law, operating only to bar the remedy but not to extinguish the right, as seen in cases like Mela Ram & Sons v. Commissioner of Income-tax and others. The court rejected the appellant's reliance on Hansraj Gupta v. Dehra Dun Mussourie Electric Tramway Co. Ltd., clarifying that the decision did not apply to the statutory liability of shareholders for unpaid share money. The court affirmed the decision of the learned single judge, holding that the liability was not extinguished upon the expiry of the limitation period for enforcing the call made before liquidation. 2. Applicability of Section 19(4) of the Displaced Persons (Debts Adjustment) Act: The appellants sought the benefit of Section 19(4) of the Displaced Persons (Debts Adjustment) Act, which was no longer in force when the appellant filed the present petition or when the call was enforced by the liquidator. Section 19 ceased to have effect ten years from August 15, 1947. The court held that the exception in sub-section (6) of Section 19, which allows for the section to have effect for things done or omitted to be done, did not apply to the appellant's omission to claim the benefit within the ten-year period. The court dismissed the argument that the appellant was entitled to an extended period due to the uncertainty of the banking company's status, emphasizing that the court could not legislate to extend the life of Section 19 beyond the ten years fixed by Parliament. The court noted that hard cases make bad laws and affirmed the decision of the learned single judge, dismissing the appeal without costs. Conclusion: The appeal was dismissed, affirming the decision of the learned single judge. The court held that the liquidator's claim was not barred by limitation and that the appellant was not entitled to the benefit of Section 19(4) of the Displaced Persons (Debts Adjustment) Act. The decision emphasized the statutory nature of the liability to contribute under the Indian Companies Act and the limited scope of the exception in Section 19(6) of the Displaced Persons (Debts Adjustment) Act.
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