SABAPATHI RAO PRESS CO LTD Vs. RSABAPATHI RAO

JUDGEMENT

(1.) The first point argued in this appeal is a question of law. It has been contended before us by the Chairman of the Sabapathi Press Co. Ltd., who argued the case personally that this petition for winding up filed by some share-holders who have paid up their share capital fully is not maintainable. Under Section 166 of the Companies Act, an application to the Court for the winding up of a Company shall be by petition presented either by the Company or by any creditor or creditors, contributory or contributories, etc. Sec. 156 of the Act runs thus: In the event of a Company being wound up, every present and past member shall, subject to the provisions of this section, be liable to contribute to the assets of the Company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding- up, and for the adjustment of the rights of the contributories among themselves, with the qualifications following...

(2.) Clause (iv) lays down the following qualification. In the case of a Company limited by shares, no contribution shall be required from any member exceeding the amount (if any) unpaid on the shares in respect to which he is liable as a present or past member.

(3.) It is, therefore, contended before us that a member who has fully paid up his share is not liable to contribute anything under this clause and, therefore, he is not a contiibutory within the meaning of Section 166. Section 15b defines the term "contributory". It means "every person liable to contribute to the assets of a Company in the event of its being wound up, and in all proceedings for determining and in all proceedings prior to the final determination of the persons who are to be deemed contributories, includes any person alleged to be a contributory." The corresponding sections of the then English Act were the subject of consideration in English Courts in In Re: National Savings Bank Association (1866) 1 C.L.A. 547 : 35 L.J.Ch. 808 : 12 Jur. (N.S.) 697 : 15 L.T. 127 : 14 W.R. 1007. The question was considered by Knight Bruce and Turner, L. JJ., in a case which came up on appeal before them from an order of the Master of the Rolls. Section 74 of the English Act then under consideration is the same as Section 158. Section 38 corresponds to our Section 158. It was held by the Lords Justices that all past members of the Company were liable to contribute and the qualification that a member shall not be liable to pay more than the unpaid amount of his share does not make him the less a contributory in the particular case where his share capital is fully paid up. The case follows another decision in In re, Anglesea Colliery 1866) 1 Ch.A. 555 : 35 L.J.Ch. 809 : 15 L.T. 127 : 14 W.R. 1004. Following these decisions, we hold that this petition is maintainable. In some cases it has been laid down as a matter of practice that the petition by a single share-holder ought not to be allowed unless it is supported by other share- holders or creditors. In the present case, the petition is supported by no lees than 84 share- holders. The petition also alleges that, in the event of winding-up. the petitioners have a tangible interest in the surplus assets. We, therefore, do not see any kind of objection to the maintainability of this petition.