PABNA DHANABHANDAR CO LTD Vs. FOYEZUDDIN MIA

JUDGEMENT

(1.) These appeals arise out of two suits brought by the Pabna Dhanabhandar Co. Ltd. against two persons who are alleged to have been shareholders in another trading company known as the City Bricks Co. Ltd.

(2.) In December 1920 the City Bricks Company mortgaged all its assets, including its uncalled capital, to the plaintiff company. In April 1923 the plaintiff company sued the City Bricks Company in the mortgage, and in July of that year, while the mortgage suit was still pending, the City Bricks Company decided to so into voluntary liquidation. A liquidator was appointed in November 1923 and was made a party to the mortgage suit in December 1923. The mortgage suit was decreed in April 1924, and in August of that year the entire mortgaged property, including the unpaid share capital, was purchased by the plaintiff "company in execution of the mortgage decree. Meanwhile, on 27 July 1921, (that is to say after the mortgage to the City Bricks Company, but before the institution of the mortgage suit), the directors of the City Bricks Company passed a resolution purporting to call up the unpaid share capital, the date fixed for payment being 31 August 1921.

(3.) The suits out of which these appeals have arisen are for the enforcement of the call against two of the shareholders of the defunct City Bricks Company, and were instituted on 15 December 1926, the plaintiff company haying acquired the rights of the above City Bricks Company in. respect of the shares in question by virtue of their auction purchase of August 1924. The trial Court dismissed both the suits on the ground that the plaintiff company had not succeeded in establishing that the defendants were co-sharers of the City Bricks Company. On an appeal being taken by the plaintiff company to the District Court, it was held by the lower appellate Court that the defendants were share-holders of the City Bricks Company, but the appeal was nevertheless dismissed on grounds which appear at first sight to be inconsistent, one of the grounds being that the suits were barred by limitation under Article 112, Schedule 1, Lim. Act, and the other being that there had been no valid call and that the plaintiff company had no cause of action. The plaintiff company has now appealed to this Court and the following points have amongst others been urged on its behalf. As regards the cause of action, it is contended that the defendants liability was not created by the call, but has been in existence ever since the defendants took up the shares in question, and that the plaintiff company have by their auction purchase acquired the right to enforce this liability.