TMI Blog1950 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... d was payable on 2nd December, 1945. On 6th August, 1945, the company gave notice to the defendant to pay the first instalment, and on 6th November, 1945, the company gave notice to pay the second instalment. The defendant failed to pay both the instalments in respect of 375 shares. A provisional liquidator of the company was appointed on nth April, 1947, and a winding up order was made by the Court on 1st October, 1947. On 9th July, 1948, the liquidator made a demand upon the defendant to pay up the amount of the unpaid call. On 9th August, 1948, the defendant took out a chamber summons for rectification of the list of contributories alleging that he was not a contributory in respect of those 375 shares. That summons was dismissed on 17th September, 1948. The defendant appealed, and the appeal was dismissed. This suit for recovering the amount of the unpaid calls was instituted on 10th December, 1948. As it was originally instituted, it was a simple suit for recovering the debt by the defendant to the company in respect of the unpaid calls. It was realised that as the suit stood it was liable to be dismissed by reason of the statute of limitation, and thereupon an amendment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to determine whether the legislature has conferred any powers upon the liquidator to make a call. Section 187 deals with the power of the Court to make calls, and that power can be exercised either before or after the Court has ascertained the sufficiency of the assets of the company. That power can be exercised against all or any of the contributories. The call has got to be made for the payment of any money which the Court considers necessary to satisfy the debts and liabilities of the company and the costs, charges and expenses of the winding up and for the adjustment of the rights of contributories among themselves. Section 212 deals with the powers and duties of a liquidator in a voluntary winding up, and one of the powers that he can exercise is the power of the Court of making calls, but that can only be done with the sanction of the Court. Then we have section 246, which confers upon the Court powers to make rules, and under sub-section (2) the High Court may by rules confers upon the official liquidator the right to exercise the powers and the duties of the Court, and one of these powers and duties is that of making calls, but even this power to make calls, which m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 187. He is entitled to file a suit to recover the debt just as he is entitled to recover any other debt due to the company. Now, a clear distinction must be made between debts due to the company which are contractual debts and debts due to the company which are statutory debts by reason of section 156 of the Indian Companies Act. A liquidator is under no obligation to follow any particular procedure or to obtain the sanction of the Court in order to realise a contractual debt. Therefore, to the extent that the liquidator filed the suit originally in order to recover the contractual debt due by the defendant in respect of unpaid calls, he was perfectly within his rights, but if the liquidator wants to recover a debt which is a statutory debt created by reason of section 156, then, in my opinion, he cannot recover it by any other method except by the mode laid down in section 187, and the reason for this distinction will be apparent. Contractual debts constitute the assets of the company, and the assets of the company have got to be realised by the liquidator on the company being wound up. The statutory liability of a contributory under section 156 is entirely a different matter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment is discretionary. In summary proceedings so instituted, every objection is just as open to the person sought to be charged as it would have been if a suit had been brought by the liquidator in the company's name for the same money. Mr. Seervai has tried to distinguish this case by stating that these observations only apply when the debt due by the contributory is other than a debt in respect of a call. Mr. Seervai's contention is that the debt in respect of a call stands on a different footing because such a debt becomes a statutory debt under section 156. That contention is obviously erroneous because Jagannath Prasad v. The U. P. Flour and Oil Mills Co. Ltd. [1916] ILR 38 All. 347 was cited before their Lordships and their Lordships apparently approved of that decision and pointed out that that case had no relation to section 186 and went on to say that it was a case relating to money due on the shares in the company which was in liquidation, the liability for which on a winding up became a statutory liability under section 156 of the Indian Companies Act, 1913. Turning to that case, it is clear on the facts of that case, that the contributory was called upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three years after the calls became payable. It was open to the liquidator to have relised this debt as a statutory debt under section 156, but as I pointed out before, the only method by which he could have recovered the statutory debt was by going to the Court under section 187 and asking the Court to make a call. He has not chosen to do so and therefore as the suit stands it is a suit to recover a contractual debt which has become time-barred. It is perfectly true that as far as the statutory liability of the contributory is concerned, the article of limitation to apply would not be Article 112 but Article 120, but the difficulty in the way of Mr. Seervai is that the liquidator has not adopted the proper procedure in order to realise the statutory liability of the contributory. Strong reliance is placed on a judgment of this Court reported in the case of Parell Spinning and Weaving Co. Ltd. v. Maneck Haji. [1886] ILR 10 Bom. 483 . It is a judgment of Mr. Justice Jardine. There the suit was brought by the official liquidator to recover calls from the defendant due before the winding up order was passed. At the date the Suit was filed the calls were time-barred, and the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation or not, under section 156 they would stand on the same footing, because to the extent of the unpaid amount on the shares of each contributory, the contributory would be liable to contribute to the funds of the company, but this liability would be subject to, governed by and controlled by section 187 of the Indain Companies Act. It could not be recovered by an ordinary suit filed in the ordinary manner for the recovery of a contractual liability, but the Court would have to consider whether the contributory should be called upon to make any contribution to the funds of the company or not. As I said before, that decision of the Court would be controlled by various considerations mentioned in section 187 of the Indian Companies Act. Reliance was also placed on a judgment of Mr. Justice Braund in the case of J. C. Chandiok v. Peary Lal [1942] AIR 1942 All. 136 . There the learned Judge was dealing with a petition presented by the liquidator under section 186 of the Indian Companies Act to recover certain calls, and it was urged before him that the liquidator had no occasion to levy these sums from the contributories because he had over-estimated the liabilities of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the debt is sought to be realised under section 186, I do not agree with the learned Judge that the debt changes its character. To the extent that an application is made under section 187, with respect again, I agree with the learned Judge that the debt changes its character. In the first case the debt remains a contractual debt and in the second case it becomes a statutory debt. Therefore, in my opinion, the suit filed by the liquidator, if looked upon as a suit to recover a contractual debt, is barred by limitation. If looked upon as a suit to realise a statutory debt created by section 156, then the suit is not maintainable because no call in respect of that liability was made by the Court, and in the absence of any such call the statutory liability cannot be realised by the liquidator. Mr. Seervai says that our decision might create serious difficulties in the way of the liquidator in realising calls made prior to the winding up. We see no difficulty whatsoever. The position in law is perfectly simple and the liquidator has his own powers whether a call is within time or is barred by limitation. If the call is within time, he might file a suit or proceed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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