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TMI Blog1965 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... t since the forfeiture was within a period of one year prior to the commencement of the winding-up, namely, March 12, 1956, the members whose shares had been forfeited were included in the list of contributories as past members of the company liable under section 426 of the Companies Act, 1956. The then official liquidator, Sri Arunachalam, took out Application No. 1197 of 1959 for leave to make a call on these past members. Permission was given to make a call of this sum of Rs. 17,200. A sum of Rs. 3,405'84 was collected by the official liquidator and the balance remained unpaid. In this application put in by the present official liquidator, Sri Vaideeswaran, it is seen that the amount realised from the sale of the assets was in excess of the amount due to the creditors, namely, Rs. 37,713 even when the previous official liquidator took out the application for calls on the past members. The present official liquidator thinks that when the existing assets were thus sufficient to discharge the creditors the liability of the past members did not arise and he quotes some decisions which will be referred to later. If that view is right, the amount collected from the past members would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the past members even though it had been wrongly collected from them; (i-b) whether he could get a balance order against the contributories who have still to contribute under the orders of court dated September 4, 1959; (ii) alternatively, if the court holds that notwithstanding the prior orders of this court it was wrong to have made any call on the past members, whether the amount of Rs. 9,005'84 so collected from them should be refunded to them ; and (iii) whether steps may be taken by the official liquidator to recover Rs, 7 per share from the preference shareholders. There is the incidental prayed for the costs of this application to come out of the estate. Notice of this application was given to the past members and to the preference shareholders but only one person has appeared and that is Sri P. Kuppuswami Ayyar, a preference shareholder, who holds five preference shares for Rs. 500. He states that no work was done by the company and no dividend was paid at all and that by virtue of the order dated September 25, 1959, in Application No. 1199 of 1959 he got 70 per cent, of the share capital, namely, Rs. 350 and that by virtue of sections 473 and 483 of the Companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... probability that some of the contributories may, partly, or wholly, fail to pay the call." Section 475: " The court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto." On the procedural aspect on the finality of the orders of this court section 473 says: " (1) An order made by the court on a contributory shall, subject to any right of appeal, be conclusive evidence that the money, if any, thereby appearing to be due or ordered to be paid is due." Section 483 provides for the right of appeal on the original side of this court. Now, confining ourselves to the substantive provisions it seems to me that the prior order dated September 4, 1959, in Application No. 1197 of 1959 and the consequential order in Application No. 1199 of 1959 dated September 25, 1959, may not be correct. That is because under the provisions of the Act and the decisions on the point, the liability of the past member would arise only if the existing assets plus the contribution of the present members for the unpaid call are not sufficient to pay the debts of the company and costs. In the present case it appears from the report of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The winding up commenced on February 3, 1922. On 18th July, 1921, the holders (2170 in number) of 463,801 shares paid up to the extent of 6s. per share had transferred them to the City Equitable Associated Ltd., who remained the registered holders thereof at the date of' the liquidation. The City Equitable Associated Ltd. became insolvent and no more than a penny in the pound could be realised by calls on them though they were placed on the A list--present members. Hence, calls were made on the transferors of the shares putting them in the B list. At the stage on which the matter came up before Eve J. it became clear that the amount already collected from the B contributories would substantially exceed the difference between the aggregate of the liabilities in respect of which they were liable to contribute and the amount available to satisfy such liabilities out of the general assets of the company other than the proceeds of the two calls made on the B contributories and the question was whether this excess estimated to amount to £10,000 upwards should be refunded to the B contributories or be treated as part of the general assets. To put it in a simpler language, after tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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