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TMI Blog1961 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Singh, (4) Hardam Singh, and (5) Gurbakshish Singh, and they have been named respectively as the numbers of their appeals have been given above. All the five appellants were directors of the Hindustan Petroleum Co. Ltd. The head office of this company has been Darya Ganj at Delhi. On April 30, 1953, a meeting of the directors of the company was held. Of the five directors (the appellants) Raja Maheshinder Singh, Hardam Singh and Gurbakshish Singh attended the meeting. They passed these resolutions at the meeting: Copies of resolutions Nos. 3 and 4 passed in the meeting of the directors held on April 30, 1953, at 1-Nihal Bagh, 1 Baradari, Patiala, under the chairmanship of Shri Maheshinder Singh : Proceedings and discussions. Conclusions resolutions. 3. S. Jasbir Singh proposed that a call of 25% on each ordinary share be made. S. Hardam Singh seconded the proposal. Resolved that a 25% call on all shares be made and notices of call be sent by the managing agents. 4. S. Jasbir Singh proposed that all directors be asked to make their shares fully paid-up. S. Gurbakshish Singh seconded the proposal. Resolved that call on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this was sent by post. In this application he first points out that apart from his payment of Rs. 5,000 for the allotment of the shares, he has paid another sum of Rs. 5,000 as advance call money. He then pointedly says that no call for share money has been made from him prior to the liquidation of the company and further says that no meeting whatever was held or resolution has been passed by the company for the call of share money from him. He then denies his liability to pay any interest. After this he says that he has already paid Rs. 10,000 and on the total number of shares allotted to him he is liable only to pay Rs. 10,000. The objection-applications of the appellants were of course opposed by the liquidator. The learned company judge settled issues in each objection application but one set of issues need only be given here for the issues in all the five objection applications are the same. They are : 1.Was a valid call of 75% of the share money made by the Hindustan Petroleum Co. Ltd. in the meeting of the board of directors held on April 30, 1957 ? 2.If so, what has been paid by the objector towards the call ? 3.Whether the amount paid in advance can be adjusted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30, 1953, and the other the remaining two directors, namely. Major Teja Singh and Gurinder Singh, appellants, who were not present at the meeting when those resolutions were passed. In regard to the first set of three directors what the learned counsel contends is that, even assuming that there is some irregularity or defect in the resolutions, they are estopped from taking advantage of the same. In so far as the remaining two directors are concerned, with regard to Gurinder Singh (appellant) the learned counsel refers to his application of March 19, 1956, and presses that it contains his admission of his liability to the extent of Rs. 10,000 thereby implying further an admission on his part in regard to the correctness of the call made on him for the amount of at least Rs. 5,000 under the resolution of April 30, 1953. In fact what the learned counsel says is that he admits the correctness of the call in substance and says that his liability is only confined to Rs. 10,000. In regard to the fifth director, Major Teja Singh (appellant), the substance of the argument of the learned counsel for the liquidator is that he being a director of the company and in the know of all the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of Rs. 2,500 said to have been made by Gurbakhshish Singh, appellant, was not made, even according to his own allegations, as a payment in cash, but what he has alleged is that a meeting of the board of directors of the .company was held at his residence at Dehra Dun and in connection with that meeting he incurred as much expenditure and for that expenditure he has been given no credit by the company. The evidence of the accountant of the company is that such a meeting was held but that in the books of the company there is no entry in regard to any expenditure on behalf of the company by this appellant. There is no proof of this amount having been paid by the appellant to the company in any form. So that in the case of these three appellants not one of them has paid anything apart from a sum of Rs. 5,000 paid when the allotment of shares was made to him. It has already been stated that another amount of Rs. 5,000 paid by Gurinder Singh (appellant) has been accepted by the learned company judge and there is no controversy over this matter at this stage. There remains only the claim in this respect of Major Teja Singh (appellant). It is not denied on behalf of the liquidator t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time and place appointed by the directors and specified in the notice. It will be seen that statement about the time or times at which the call is to be paid appears in the articles twice. In the first part of the articles it apparently is made an imperative part of the resolution making the call and the requirement is that the resolution is to fix the time of payment. In the second part is the direction about the payment to the persons at the times and places appointed by the directors. The first, the learned counsel contends, is imperative and invites the call but the second being merely a direction may or may not be complied with or it may not come in the resolution but may come in the subsequent notice about the call. In support the learned counsel has referred to Bengal Electric Lamp Works, In re [1942] 12 Comp. Cas. 238 and East and West Insurance Co. Ltd. v. Kamla Jayantilal Mehta [1956] 26 Comp. Cas. 313 . The first of these two cases holds the call to be invalid if it is not stated either in the resolution or in the notice to whom the amount is to be paid and at what place. It does not deal with the question of time of payment because that did not arise in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would hold the call to be bad under resolution No. 4 of April 30, 1953. When both the resolutions are looked at there is obvious disparity in the calls made, one from an ordinary shareholder and the other from a director. This is a case that has to be considered under the Indian Companies Act, 1913. Section 49 of the Act provides that "A company, if so authorised by its articles, may do any one or more of the following things, namely : (1) make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares;. . ." It is obvious that the company has this power only if so authorised by its articles and not otherwise. In Table A, clause 16, an instance of providing for such power is given. It reads : "The directors may make arrangements on the issue of shares for a difference between the shareholders in the amount of calls to be paid and in the times of payment." This is one of the clauses in Table A which is not compulsorily part of the articles of association of the company, and it is a clause which has not been adopted by the company as an article in its articles of association. The company has, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed above and here I am inclined to agree with him. The reason is this. The first defect is with regard to the fixation of the time of payment of the call. These directors were themselves present at the meeting and they decided even with regard to themselves that they shall pay the whole of the balance of the share money remaining due on their shares. Then in their case there was the fixation of the immediate time for payment and this objection cannot thus be available to them. They cannot say that they have had no notice of the time when their liability to pay arose. They have known this all the time and knew this immediately as the resolution was passed. In regard to the discriminatory nature of the calls it is open to a shareholder to agree to pay all what is due on a share and as they have themselves agreed it is not now open to them to say that they will not pay what they have already agreed to pay. On the question of want of notice, surely they do not need any notice for they are the persons who have decided this matter and in their case to ask for notice would be to ask for something which is basically a redundancy. So that the substance of the three arguments would r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned the learned counsel for the liquidator says that because he was a director he must be credited with the knowledge of what happened in the meeting and how the business of the company was being conducted but I do not see how, when it is established as a fact that he did not attend the meeting, any such knowledge can be imputed to him. Then the learned counsel says that it must be assumed that he has known what has been going on in the company but then there is no material that on any subsequent meeting, if attended by him, the minutes of the proceedings of the meeting of April 30, 1953, came before the meeting. No such knowledge can, therefore, be imputed to this appellant. So the cases of Major Teja Singh and Gurinder Singh, appellants, must proceed on the same basis. In so far as they are concerned the call cannot be, on that account, placed in the list of contributories. Now there remains for consideration one argument of the learned counsel for the liquidator, which has been urged by him as a preliminary argument, and that is that the first three arguments as detailed above have not been set out by these appellants in their objection applications and they were not in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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