Liability of legal representatives in winding up persists despite unproven renunciation; substitution timing does not invoke limitation.

The note addresses two issues: whether an asserted renunciation by a deceased member extinguished contributory status and whether heirs' failure to be substituted within thirty days engages the Limitation Act. The author concludes the renunciation evidence was insufficient and did not forfeit the deposit-contributory status remained. On substitution the Limitation Act is inapplicable; liability on a member's death passes automatically to legal representatives under the winding up statute, who therefore remain liable in the liquidation. The practical effect is that unproven renunciation does not relieve contributory liability and substitution timing does not create a limitation bar.

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Issues: (i) Whether the deceased had ceased to be a contributory and forfeited the deposit on his application for shares; (ii) Whether the heirs' failure to be substituted within thirty days invoked the Limitation Act or whether liability on the death of a member is governed by Section 160 of the Act.

Issue (i): Whether the appellant's deceased father had effectively severed his status as a contributory by purportedly informing the company's managing director that he wished to have nothing more to do with the company and that his shares were forfeited.

Analysis: The Court examined the evidence supporting the allegation that the deceased had renounced his interest and found that the evidence was meagre and insufficient to establish the alleged conversation or an effective forfeiture. The learned single Judge's factual finding that the story was untrue was upheld.

Conclusion: In favour of Respondent.

Issue (ii): Whether the heirs' not being substituted within thirty days engaged the Limitation Act, or whether the liability of the deceased member passed automatically to his legal representatives under the statute governing winding up.

Analysis: The Court held that the Limitation Act did not apply to the question of substitution; instead the liability of legal representatives on the death of a member is governed by the company winding-up statute itself. The Court applied the statutory rule that on the death of a member the liability falls upon the representatives.

Conclusion: In favour of Respondent.

Final Conclusion: The Letters Patent Appeal is dismissed, affirming the single Judge's decision that the deceased remained a contributory and that his legal representatives remain liable under the winding-up statute.

Ratio Decidendi: On the death of a company member his liability in a winding up passes automatically to his legal representatives under the statute governing winding up, and mere unproven assertions of renunciation do not extinguish contributory status or forfeit the deposit.

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