Realisation of directors' calls affirmed as company debts, but claim requires remand for issues, evidence and limitation determination.

Amounts due on calls made by directors prior to commencement of liquidation are clarified as realisable debts under the statutory provision governing realisation of company debts, so director-made calls fall within the scope of realisable claims. Separately, procedural fairness requires that respondents be given notice and an opportunity to meet a claim advanced under that provision; because the lower court proceeded on that statutory basis without affording such opportunity and without determining applicability of limitation provisions, the matter must be remitted for framing issues, receiving evidence and deciding limitation and statutory preconditions before a fresh adjudication on the substantive claim.

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Issues: (i) Whether amounts due on calls made by directors before commencement of liquidation proceedings are realisable under Section 186 of the Indian Companies Act; (ii) Whether appellants were denied opportunity to meet the case under Section 186 and whether limitation barred the claim.

Issue (i): Whether amounts due on calls made by directors prior to commencement of liquidation proceedings fall within Section 186 of the Indian Companies Act and are realisable thereunder.

Analysis: The wording of Section 186 admits ambiguity, but authorities on the corresponding English provision and several Indian decisions indicate that calls made before liquidation may be treated as realisable under Section 186. The concluding portion of sub-section (1) excludes only calls made in pursuance of the Act, and amounts due on directors' calls correspond to debts under Section 21(2) of the Indian Companies Act.

Conclusion: Section 186 applies and permits realisation of amounts due on calls made by directors prior to liquidation; such amounts fall within the scope of Section 186 and are treatable as debts.

Issue (ii): Whether the appellants were afforded a fair opportunity to meet the case under Section 186 and whether limitation provisions (Section 156(i),(ii),(iii)) were applicable.

Analysis: The proceedings below were conducted on the basis that the application fell under Section 186, though the application did not expressly invoke that section. The appellants were not given an opportunity to meet the case advanced under Section 186 and the learned District Judge treated the application as not subject to limitation; this procedural posture affected the parties' ability to address limitation and the conditions for calling upon the appellants to pay.

Conclusion: The appellants were denied a fair opportunity to meet the case under Section 186; the matter must be remanded for framing necessary issues and recording evidence, including determination of limitation and fulfilment of conditions under Section 156(i),(ii),(iii).

Final Conclusion: The appeal is allowed, the impugned order is set aside, and the matter is remitted for fresh decision after framing issues and hearing evidence to determine both the substantive claim under Section 186 and any limitation or statutory conditions.

Ratio Decidendi: Amounts due on calls made by directors before commencement of liquidation proceedings are realisable under Section 186 of the Indian Companies Act as debts, but procedural fairness requires parties be given opportunity to meet claims and for issues of limitation under Section 156(i),(ii),(iii) to be decided after framing of issues and evidence.

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