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TMI Blog1933 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... -0 per share are payable 30 days after application, and the balance of Rs. 5 per share is payable within 30 days from the date of the second payment. The plaintiffs further say that on 3rd August 1920, that is, nearly a year after the application, 600 shares were allotted to the defendant, and accordingly he became liable to pay another Rs. 1,500 on 3rd September, 1920. There is no evidence of any notice of allotment having been given to the defendant; nor is there any evidence of any notice to the defendant to pay the moneys remaining due in respect of the 600 shares. The plaintiffs admit that the time for payment was extended to 15th May, 1921, and their case is that on 17th March, 1925 they passed a resolution, under Article 42 of the articles of association, forfeiting the defendant's shares (Exhibit 1). This suit was started on 5th January, 1928. Assuming the dates alleged by the plaintiffs to be correct, the defendant became liable to pay these moneys on 15th May, 1921 and at the date of the resolution for forfeiture in March, 1925 the defendant's liability had become barred under Article 112, Limitation Act. The learned Judge held that the defendant was a member of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 186, Companies Act. That section provides that the Court may at any time after making a winding-up order make an order on any contributory for the time being settled on the list of contributories to pay in the manner directed by the order any money due from him. I agree with the learned Judge that the expression "money due" has the same meaning as "money owing," but the basis of the decision of the Privy Council was that section 186 deals only with procedure for enforcing payment and does not purport to impose any liability. On that view of the section the Privy Council gave to the expression "money due" the meaning "due and recoverable in law." I agree that if the context so required, a similar construction should be placed on the expression " money owing," but in my view there is no sufficient context in these articles to induce us to give that meaning to the expression in Article 45. Article 45, unlike section 186, Companies Act, does undoubtedly impose a new liability. Article 42, which provides that if any shareholder fails to pay any money due from him in respect of any share on the appointed day the shares in respect of which any money is owing will be liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the application in August 1919 and the allotment in August 1920 was unreasonable. No doubt if the defendant had been given notice of the allotment, and had hot objected to it promptly, he would have been bound. But we have no evidence that he was ever told anything what ever about the allotment. That being so, I see no reason why he should not in this suit challenge the allotment. On that view of the matter the defendant never became a shareholder in the company. The defendant's own case is that his application for shares was considerably later than August 1919, and he relies on a receipt given to him for the application money which was dated 13th July, 1920, being Exhibit D. If the defendant did not apply for the shares in August 1919, there was no resolution to forfeit the shares, because the resolution for forfeiture (Exhibit E) deals only with shares in respect of which application were made between certain dates in August 1919. I am disposed myself for the reasons given by the learned Judge to think that he is right in saying that the date of application was that relied on by the plaintiffs, namely, 23rd August, 1919. But on that basis, in my opinion, the allotment was too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt became a member of the plaintiff-company, no time was appointed for payment of the moneys due on his shares, and the provisions of Article 42 as to forfeiture never came into operation. But in my view the true position is that the alleged allotment of shares in favour of the defendant took place after an unreasonable delay which entitled the defendant to repudiate the allotment, and as there is no evidence that the defendant was informed of the allotment, he was entitled to repudiate it for the first time in this suit. On those grounds I think that the appeal must be dismissed with costs. Blackwell, J. I am of the same opinion. The learned Advocate-General has contended that the defendant had waived his right to contend that the allotment had been made an unreasonable time after the application. In support of that contention he relied upon a receipt Exhibit D dated 30th July, 1920 which had been produced by the defendant himself for the sum of Rs. 1,500, the deposit made by him in respect of his application. The contention of the Advocate-General was that that receipt having been given on 30th July, 1920, and the allotment having been made on 3rd August, 1920, the allotment wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the words "money owing" in their natural significance they appear to me to mean "money owing whether recoverable or not." Although the right to recover money due or money owing may be barred by a statute of limitation, the money still remains due or owing, and I see no reason at all why a shareholder should not enter into an independent contract in the articles providing that if he should cease to be a shareholder by reason of the forfeiture of his share he should nevertheless be bound to pay as a debt independent of his liability as a shareholder moneys which were owing by him at the date of the forfeiture in the sense in which I read those words. Article 42 clearly requires us to treat the expressions "money due" and "money owing" in that article in the sense of money due or money owing whether recoverable or not. Mr. Khergamwalla has strongly relied upon the expression "liable to pay in" Article 145, but that in my view is an expression which is ambiguous, and which may mean either legally liable or liable independently of any enforceable legal objection. Seeing that the words are capable in my view of that double meaning I see no reason why one should read into the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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