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TMI Blog1962 (7) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the amount due for the purchase of those shares. On November 30, 1949, the company made a demand for the balance due by the defendant (appellant). But no amount was paid by the defendant. By an extraordinary resolution passed by the shareholders of the said company, it went into voluntary liquidation on January 12, 1953. The plaintiffs were appointed as liquidators. Plaintiffs are the respondents before this court. On their assumption of the office of liquidators, they issued a notice dated July 19, 1954, marked as exhibit P-2 in the case, calling upon the defendant to pay a sum of Rs. 1,500 together with interest thereon and when he failed to do so, they filed a suit on July 14, 1955. The defendants contended that if the liquidators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submits that once the directors of the company have made a call regarding the amount due in respect of the unpaid share amount, on winding up, it becomes a contractual liability and that amount becomes a debt due to the company. By the superimposition of the liquidation proceedings, the nature of that liability does not change into a statutory one. A brief reference has to be made to some of the provisions of the Indian Companies Act, 1913 (7 of 1913), which is the relevant Act applicable to the facts of the case. The mode of winding up is detailed in section 156. Section 156 refers to the liability of the contributories and the relevant portion of it runs as follows : "156. (1) In the event of a company being wound up, every present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exercise the power of the court of making calls without the sanction of the court. The liquidator is under section 216(1)(d) empowered to exercise that power without reference to court. It is true that he may under section 216(1) apply to the court for enforcing the call and the court may the reupon exercise all or any of the powers which it would exercise if the company were being wound up by the court. But he is not bound to resort to section 216(1) and may proceed by way of suit for the recovery of the statutory debt. This is implicit in. section 159 and is made explicit by section 198. Sri Gopal at one stage relied on the observations of his Lordship, Chief Justice Chagla, in the case of Mohamed Akbar Abdulla Fazalboy v. Associated Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vening event of the voluntary liquidation, this contractual liability will not be altered into a statutory liability. The argument of Sri Gopal is of importance to the defendant, because, if it is considered to be a contractual liability, the article of the Limitation Act that will be applicable will be article 112, and, consequently, the suit against the defendant will be barred by limitation. In support of that contention, Sri Gopal relies upon the fact that as far back as November 30, 1949, a demand was made on the defendant for the unpaid share amount by the directors. No doubt, after the voluntary liquidation proceedings were started and the liquidators were appointed, they issued a fresh notice dated July 19, 1954, marked as exhibit P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the present case. In the first place, the provisions that were applicable to the liquidator acting in the Allahabad case were those under the Insurance Act. Secondly, there is no consideration of the provisions of section 156 of the Companies Act regarding the liability of contributories in winding up proceedings. Under that section the nature of liability becomes a statutory one on the company being wound up. Thus such a member will be liable to contribute to the assets of such company under the statutory liability imposed on him. This view finds support in a decision of the Privy Council in Hansraj Gupta v. N.P. Asthana [1932] 2 Comp. Cas. 548 (PC) where it is held by his Lordship Lord Russell as follows : "Whatever may have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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