Statutory contribution in liquidation remains enforceable despite a time-barred share-call debt, but contractual interest is not recoverable.

A statutory contribution claim in liquidation under Section 156 of the Indian Companies Act, 1913 was treated as distinct from enforcement of the original time-barred share-call debt. The liquidator could still recover the unpaid amount on the shares from former contributories because the liquidation remedy created a new statutory liability, even though the underlying call debt could not be sued upon as such. Recovery was confined to unpaid capital under the statute, however, so contractual interest under the articles of association was not recoverable. The substantive contribution claim was upheld, but interest was disallowed.

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Issues: (i) whether the liquidator could recover the amount claimed as a contribution from former shareholders under Section 156 of the Indian Companies Act, 1913, notwithstanding the contention that the original claim was a time-barred debt arising from calls on shares; and (ii) whether interest could be recovered on the amount payable by the contributories.

Issue (i): whether the liquidator could recover the amount claimed as a contribution from former shareholders under Section 156 of the Indian Companies Act, 1913, notwithstanding the contention that the original claim was a time-barred debt arising from calls on shares.

Analysis: The liability enforced in winding up was treated as a statutory liability under Section 156, not as enforcement of the original contractual debt arising from the calls. A contributory falling within Section 156 is subject to a new liability for the amount unpaid on the shares in respect of which he is liable, provided the existing members cannot satisfy the contributions required. The earlier authorities were applied to support the view that, although a time-barred call debt could not be sued upon as such, the statutory liability in liquidation could still be enforced by summary proceedings.

Conclusion: The claim was maintainable as a statutory contribution under Section 156, and the objection based on limitation failed against the appellant.

Issue (ii): whether interest could be recovered on the amount payable by the contributories.

Analysis: Interest could follow from the contractual terms if the demand were one for the original debt, but once the claim was treated as one arising under Section 156, the recovery had to be confined to the amount unpaid on the shares. That statutory measure was understood to extend to unpaid capital only, and not to interest under the articles of association.

Conclusion: The claim for interest was not sustainable and was struck down in favour of the appellant.

Final Conclusion: The appeal succeeded only to the extent of deleting interest, while the substantive liability to contribute the unpaid amount on the shares was upheld; costs were directed to lie where they fell.

Ratio Decidendi: In liquidation, a statutory contribution liability under Section 156 of the Indian Companies Act, 1913 is distinct from enforcement of the original share-call debt, and recovery is confined to the unpaid capital amount without contractual interest unless the statute so permits.

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