Forfeiture fixes limitation date for recovery of unpaid calls, and liquidator retains statutory power to sue despite a company resolution.

Forfeiture of shares fixes the relevant limitation date for recovery of unpaid calls, so suits brought within three years of forfeiture fall within the applicable limitation provision; the liquidator retains statutory authority to institute proceedings notwithstanding a company resolution that does not expressly confer suit instituting powers, and a director's subsequent correspondence cannot retrospectively oust that statutory right. A late raised contention that directors had a duty to sell forfeited shares to reduce liability was not entertained. Forfeiture terminates shareholder status and therefore there is no basis for awarding interest from forfeiture to the date of suit.

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Issues: (i) Whether the suit by the liquidator for unpaid calls is barred by limitation or was within time; (ii) Whether the liquidator had the statutory right to institute the suit despite the terms of the company's resolution; (iii) Whether the liquidator required the consent of directors before instituting the suit following correspondence from a director; (iv) Whether the directors were under a duty to sell the forfeited share to reduce the defendant's liability; (v) Whether interest is payable from the date of forfeiture to the date of suit.

Issue (i): Whether the suit is barred by Article 112 of the Limitation Act or is within time under Article 115 due to forfeiture.

Analysis: The Court compared the applicable Article 28 of Table A with authorities and considered the effect of forfeiture on the limitation period. It held that forfeiture fixed the date for limitation and that the suit was instituted within three years from the date of forfeiture.

Conclusion: The suit was within time; Article 115 of the Limitation Act applies in favour of the plaintiff.

Issue (ii): Whether the liquidator had the right to sue notwithstanding the November 3, 1928 resolution lacking express power to institute suits.

Analysis: The Court examined Section 207 of the Indian Companies Act and the resolution language and concluded that statutory powers conferred on a liquidator need not be expressly repeated in company resolutions; absence of express prohibition meant statutory powers remained exercisable.

Conclusion: The liquidator had the statutory right to institute the suit.

Issue (iii): Whether a director's letter after the liquidator filed suit required the liquidator to obtain directors' consent before instituting proceedings.

Analysis: The Court considered the chronology of correspondence and held that the director's letter, sent after the suit was filed, could not oust the liquidator's statutory rights or retrospectively prevent suit institution.

Conclusion: The director's letter did not prevent the liquidator from instituting the suit.

Issue (iv): Whether directors were under a duty to sell the forfeited share and thereby reduce the defendant's liability.

Analysis: The point involved alleged duty and conduct of directors and was raised late; the Court found no substance and refused to entertain it for the first time in the second appeal.

Conclusion: The contention that directors should have sold the forfeited share is not sustained.

Issue (v): Whether interest is payable from the date of forfeiture to the date of suit.

Analysis: The Court held there was no contractual or statutory basis for interest after forfeiture until suit; Article 14 of Table A relates to rights as a shareholder, and forfeiture terminated shareholder status, so interest as a shareholder is not payable post-forfeiture.

Conclusion: No interest is payable from the date of forfeiture to the date of suit; the decree should not include interest for that period.

Final Conclusion: The appeal is dismissed insofar as it challenges the decree for recovery of unpaid calls, the liquidator was entitled to sue and the suit was within time, but the award of interest from forfeiture to suit is not sustained.

Ratio Decidendi: Forfeiture of a share fixes the relevant date for limitation under Article 115 and a liquidator may institute suits by virtue of statutory powers under Section 207 of the Indian Companies Act even if a company resolution does not expressly confer such power; forfeiture terminates shareholder status so shareholder interest under Table A does not apply post-forfeiture.

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