1971 (8) TMI 125 - HC - Companies Law

Winding up - Liability as contributories of present and post members, Powers and duties of liquidator

Summary

Issues:
1. Whether the suits were barred by limitation under article 112 of the Limitation Act, 1908.
2. Whether the liability of shareholders to pay calls made by the company before winding-up extends to unpaid amounts due on shares.
3. Whether a liquidator in a voluntary winding-up can make calls without court sanction and enforce statutory debts.

Detailed Analysis:
1. The main issue in this case was whether the suits were barred by limitation under article 112 of the Limitation Act, 1908. The appellants argued that the calls made by the company in 1955 became debts due under the call, and hence, the suits filed in 1959 were barred by limitation. However, the court held that the liability to pay calls became statutory when the company went into liquidation, and the liquidators had the authority to make calls for the unpaid amounts. The court referred to various precedents and concluded that the suits were not barred by limitation under article 112.

2. Another crucial issue addressed in the judgment was the extent of liability of shareholders to pay calls made by the company before winding-up. The court cited Section 156 of the Companies Act, 1913, which imposes a liability on present and past members to contribute to the company's assets for payment of debts and liabilities. The court relied on precedents and established that the liability of shareholders extends to unpaid amounts due on shares, irrespective of whether calls were made before or after winding-up. This reaffirmed the statutory nature of the liability.

3. The judgment also delved into the authority of a liquidator in a voluntary winding-up to make calls without court sanction and enforce statutory debts. Precedents such as L. Gupta v. Vishnu Babu Rao Sarvate were cited to support the argument that a liquidator can make calls under certain provisions without court sanction and can file suits for recovery of statutory debts. The court clarified that the liquidators in this case were competent to make calls without court sanction, and the suits were not barred by limitation under article 120 of the Limitation Act, 1908. This aspect highlighted the procedural powers of liquidators in enforcing statutory liabilities.

In conclusion, the court dismissed the appeals, ruling in favor of the respondents, without any order as to costs.