Contributory liability depends on proof of valid allotment, and rectification remains available in winding up without estoppel.

A person cannot be treated as a contributory for disputed shares unless a valid written application, acceptance, allotment and communication of the concluded allotment are proved. The Court held that the register of members could still be rectified during winding up where the alleged liability had no legal foundation, and that unreliable company records and the petitioner's admitted holding of only 500 shares did not establish liability for 50,000 shares. Because no valid allotment was proved, estoppel, acquiescence and delay did not bar rectification. The petitioner was therefore entitled to have the register corrected to reflect only the 500 fully paid shares and was not liable as a contributory for the disputed shares.

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Issues: (i) Whether there was a valid application, allotment and communication of allotment in respect of 50,000 shares so as to fasten liability on the petitioner as a contributory. (ii) Whether delay, acquiescence or estoppel barred the petitioner from seeking rectification of the register of members.

Issue (i): Whether there was a valid application, allotment and communication of allotment in respect of 50,000 shares so as to fasten liability on the petitioner as a contributory.

Analysis: The Court held that after a winding-up order the register of members could still be rectified while settling the list of contributories, and that liability could be imposed only if there was proof of a genuine application, acceptance and concluded contract for the alleged shares. The statutory scheme under Section 41(2) of the Companies Act, 1956 required written agreement to become a member, and the records relied on by the Official Liquidator were found unreliable and inconsistent with the petitioner's admitted purchase of only 500 shares. The evidence did not establish a valid application for 50,000 shares, payment of the requisite application money, allotment of those shares, or communication of such allotment to the petitioner.

Conclusion: No valid allotment or concluded contract for 50,000 shares was proved, and the petitioner could not be placed on the list of contributories on that basis.

Issue (ii): Whether delay, acquiescence or estoppel barred the petitioner from seeking rectification of the register of members.

Analysis: Since the alleged 50,000-share allotment itself was not proved, the petitioner could not be treated as having acquiesced in or affirmed a liability that never legally arose. The Court treated rectification as maintainable notwithstanding the stage of winding up where the foundation of liability was absent.

Conclusion: No estoppel operated against the petitioner, and delay did not defeat the claim for rectification.

Final Conclusion: The petitioner was entitled to rectification of the register so that only the 500 fully paid shares were reflected, and his name could not be included as a contributory in respect of the disputed 50,000 shares.

Ratio Decidendi: A person's name cannot be placed on the list of contributories, nor retained on the register of members for disputed shares, unless a valid written application, acceptance and communication of a concluded allotment are proved; absent such proof, rectification is available even in winding up and estoppel cannot arise from a non-existent allotment.

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