9911796707
TMI Blog1970 (2) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ow under liquidation) valued at Rs. 18 lakhs was not fully paid up by the shareholders, namely, the present appellants. The facts may be succinctly stated. Appellant No. 1, the Alote Estate, was a firm consisting of two partners at the material time. It came into existence in 1944 when Vikram Sugar Mills Ltd., hereinafter called the "company", was proposed to be floated. The two partners of the firm were His Highness Col. Sir Vikramsingh Rao Pawar, Ruler of the State of Dewas (Senior), and R. K. N. Gajapati Raju of Vizagapatnam who died some time in 1946 with the result that the firm was dissolved. In 1947, the ruler of Dewas (Senior) was taken in adoption by Her Highness the Senior Dowager Maharanisaheba of Kolhapur. He assumed the name a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1950, Prabhakar Parashuramji Pandit- a shareholder-filed before the High Court a petition under sections 166 and 162 of the Companies Act, 1913, for winding up the company. On April 2, 1951, two joint liquidators were appointed. The liquidators took steps to settle the list of contributories and object-tions were raised by His Highness the Maharaja of Kolhapur as also by the firm against inclusion of their names in that list. While these proceedings were pending an application was filed by respondent No. 1 on October 31, 1961, praying that an inquiry be made in respect of the price paid for 6,000 acres of land before the allotment of the shares and "to hold the Alote Estate and His Highness the Maharaja of Kolhapur liable as contributorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the contention of respondent No. 1 that the valuation of the land was Rs. 30 and not Rs. 300 per acre could not be inquired into and it was not necessary to consider whether such inquiry was barred by limitation in view of section 235 of the Act. It was, however, observed that if the allegation of respondent No. .1 was that the Alote Estate as an officer of the company was guilty of misfeasance or breach of trust the application having been made more than three years from the date of first appointment of liquidators would be clearly barred. Reference was made to numerous English and Indian decisions for coming to the conclusion that a fully paid shareholder could not be called upon to contribute towards the assets of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, therefore, was whether the appellants could be placed on the list of contributories. It could hardly be disputed that a shareholder of fully paid up shares will not be placed on the list of contributories and made to contribute towards the assets of the company unless the register is rectified and it is determined in appropriate proceedings that he is not a fully paid up shareholder. In England the rule which has been accepted as settled is that although the court can inquire into an allegation that owing to fraud the contract relating to fully paid up shares was vitiated, unless the contract is impeached, mere inadequacy of price is not sufficient of itself to invalidate the contract. In the words of Vaughan Williams L. J. in In re In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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