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of <h1>Individual's objection dismissed, deemed contributory of company in liquidation under Indian Companies Act.</h1> <h3>Mulk Raj Bhalla Versus Peoples Bank of Northern India, Ltd.</h3> The court dismissed the objection of an individual to being listed as a contributory of a company in liquidation. The individual, who became the Managing ... Company – Membership of Issues:Objection to being included as a contributory in the list of the company in liquidation.Analysis:The judgment pertains to an objection raised by an individual against being listed as a contributory of a company in liquidation. The objector was invited to become the Managing Director of the company during a period of financial distress and was provided with qualification shares by another individual without payment. The objector argued that he should not be considered a member of the company as the shares were transferred to him as a mere formality. However, the court held that under Section 30(2) of the Indian Companies Act, the objector is indeed a member of the company as his name was entered in the register of members and he had agreed to become a member. Additionally, the objector was required to be a shareholder to qualify as a Director, further solidifying his membership status.Moreover, the court found that the objector was estopped from challenging his membership status. The objector had purchased the shares, attended shareholder meetings, and acted as a shareholder throughout his tenure as Managing Director. He did not dispute his shareholding when demands for calls on shares were made, nor did he mention his shares in his resignation letter. The court deemed that the objector's conduct of holding himself out as a shareholder and failing to assert his non-membership earlier estopped him from denying his membership at a later stage, especially when the company was in liquidation.Therefore, the court dismissed the objection and ordered the objector to bear the costs of Rs. 200, which would be taxed as costs. The judgment emphasized the objector's clear membership in the company based on legal provisions and his conduct estopping him from challenging his membership status at a later stage, particularly during the company's liquidation process.
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