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TMI Blog1959 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the State paid only Rs. 50,000. Thus, a balance of Rs. 50,000 was the unpaid call in respect of these shares. The State also lent Rs. 10,000 to the company partly on March 5, 1945, and partly on April 6, 1945. It would appear that this concern ran into difficulties and the Government of Idar was, therefore, desirous of getting rid of its shares. An agreement was thereupon entered into between a concern known as the M.D. Industries Ltd. of Ahmedabad and the Himatnagar Glass Ceramic Industries Ltd. Under that agreement the former was to be appointed as the sole selling agents of the Himatnagar Glass Ceramic Industries Ltd. In consideration of their agreeing to render financial help to the aforesaid industries it was also agreed that the M.D. Industries Ltd. were to take over all the shares which stood in the name of Idar State in the books of the company. They were to pay an amount of Rs. 1,50,000 to the Idar State as purchase price of those shares within a certain period. They never paid this money. On January 24, 1948, the State of Idar took possession of the factory with all the properties of the company and was in possession of those properties through its Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the property of the company to the liquidator and granted permission to the liquidator to sell those properties. Before us it was most strenuously urged by Mr. Rane, the Assistant Government Pleader, that the State of Bombay was not liable to pay any call money to the liquidator. He disputed the liability of the State on three grounds. They are: In the first place, the obligations of the former Idar State did not devolve on the State of Bombay. In the second place, the legal effect of the agreement entered into in 1945 was to absolve the Idar State from paying the call money to the company and in the third place, the State of Bombay was not a contributory whose name has been settled on the list of contributories by the liquidator. Relying upon a decision of a Division Bench of this court in the case of Ganpatrao v. State of Bombay [1958] 60 Bom. LR 888, 891 , Mr. Rane contended that after the merger a former subject of the Idar State was incompetent to hold the State of Bombay liable upon any contract which had been entered into with him by the Idar State. He relied in particular upon the observations of Shah J., who delivered the judgment of the court: "It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquire into the justice or injustice of the act and the subject of the ceding sovereign could not carry on the previously acquired rights under the new sovereign. The only enforceable rights they could have against the new sovereign are those that the new sovereign has by agreement, express or by legislation conferred upon him." Here we have the fact that the State of Idar had entered into possession of this property by virtue of the agreements of 1945 on the ground that it was a shareholder to the extent of two lakhs of rupees. After the merger the State of Bombay, entered into possession of this property. It would, therefore, follow that the State of Bombay intended to assert the same rights which the former Idar State purported to assert when it had entered into the agreement. Those rights were based, as already stated, upon the initial fact that the State of Idar was a shareholder to the extent of Rs. 2 lakhs and in respect of which it had paid Rs. 1,50,000 by way of share money. A balance of Rs. 50,000 was payable by the State to the company. This liability must naturally attach to the right which the State of Idar had by reason of the fact that it had paid Rs. 1,50,000. Now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orandum of appeal. In such a circumstance we do not permit Mr. Rane to raise this point. Then Mr. Rane contended that the claim of the liquidator is barred by time. In this connection he relies on article 112 of the Limitation Act. That article provides that the suit has to be instituted within three years of the date from which the call by a company is payable. Mr. Rane points out that a resolution was passed on August 4, 1946, by the board of directors calling for the money and providing for payment apparently by the end of September, 1946. Therefore, according to Mr. Rane the suit was to be brought within three years of September 30, 1946. Since the suit was not brought in time he contends that the court could not allow the application of the liquidator wherein he claims for recovery of an unpaid call money from the State of Bombay. Now, there are two sections of the old Companies Act which deal with the applications of a liquidator in winding up proceedings for recovery of call money. One is section 186 and the other is section 187. These sections are as follows: "186. At any time after the making of the winding up order the Court may make an order on any contributory for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot based upon the resolution. Since it is not based upon that resolution he could not have recourse to the provisions of section 186 of the Act. Mr. Rane then points out that in his application to the court the liquidator has claimed interest at 9 per cent. from the date of the resolution and, therefore, it must be inferred that the demand made by the liquidator was based on the resolution. The most that can be said is that the demand for interest was based on that resolution but nothing more. We do not think that this circumstance conclusively indicates that the liquidator had based his demand for the unpaid call money on the resolution of the board of directors. Under the Companies Act a liquidator is given a right to move the court for recovery of moneys due under certain provisions of that Act. Section 187 of the Act is a provision which empowers the court to order in certain circumstances the payment to the liquidator of moneys which he can claim under the statute. It is contended by Mr. Rane that even in such a case the question of interest would arise. Whether it does so or not, it is sufficient for the purpose of this case to say that no proper application was made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it would follow that the provisions of section 185 could be availed of against the State. There is, however, nothing in those provisions which entitled the court to require a contributory to pay rent in respect of property in the possession of the contributory. If the State had collected any money belonging to the company or had in its possession any money belonging to the company then, of course, an order could have been made by the court requiring the State to pay such money to the liquidator. Mr. Shah, who appears for the respondent, says that the State of Bombay had let out the buildings belonging to the company to the Civil Supplies Department on a rent of Rs. 500 per month and that after collecting the rent from the Civil Supplies Department, the State had actually paid a part of the rent so collected to one of the directors of the company and that consequently the State must be held liable to pay the rent for the entire period during which the Civil Supplies Department was in occupation of the building. For one thing, it does not appear that any rent was collected by the State from the Civil Supplies Department except for a period of five months or so and a part of the ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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