T M MATHEW Vs. INDUSTRIAL BANK LTD

JUDGEMENT

(1.) The appellants in these appeals are shareholders in the Banking company in question. They paid portions of the share money at the time of allotment. On 16-2-1955 the Company made a call; they paid a portion of the amount called but failed to pay the balance. Thereafter the company went into voluntary liquidation; and the respondents were appointed liquidators. They issued notices Exts. D2 and P5 on 8-8-1957 calling upon the shareholders to pay the amounts still due from them on the shares standing in their names in the books of the company within ten days of the receipt of the notices. The amounts were not paid; and so suits were instituted for recovery of the same. The appellants contended among other things that the suits were barred by time. The learned Munsiff overruled the contention and decreed the suits; but in appeal the suits were held to be barred by limitation and the decrees reversed. The liquidators filed second appeals to this court; and the learned single Judge has allowed the appeals. Hence these appeals.

(2.) The only question for consideration is whether the learned single Judge was right in holding that the suits were not barred by limitation. The appellants contended that the call was made by the company on 16-2-1955 while it was functioning, and three years elapsed from the date when the monies became due under the call, and therefore, the suits filed on 21-12-1959 were clearly barred under Art.112 of the Limitation Act, 1908. They argued that the period of limitation would not be extended merely because the company went into voluntary liquidation; and the liquidators made further calls for those amounts also. In other words, the argument was that when the call monies were not paid on the due dates they became debts due to the company and were the assets of the company on the date when the company went into liquidation; and for recovery of the debts the article applicable is Art.112; and that the fact that the calls were made by the liquidators of the amounts still remaining due on the shares, including the amount already called, and the fact that the shareholders were placed on the list of contributories would not give the liquidators a new cause of action.

(3.) The liability to pay the calls made by the company on 16-2-1955 was ex contractu, but it became ex lege when the company went into liquidation and calls were made by the liquidators. S.156 of the Companies Act 1913, reads: