Validity of share calls turned on fixed payment time, unequal treatment limits, estoppel, and proof of extra payments.

A call on shares was defective where the articles required a fixed time for payment and the resolution failed to specify one, and the company had not adopted any lawful basis for unequal calls between shareholders. That defect prevented enforcement against shareholders who were not bound by the resolution. However, shareholders who attended and participated in the meeting were estopped from disputing the validity of the call and remained liable on the balance. Claims for credit of payments beyond the original allotment money succeeded only where the additional advance call payment was proved; unsupported payment claims failed.

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Issues: (i) whether the call made under the directors' resolution was valid in the absence of a fixed time for payment and in view of the unequal call structure; (ii) whether the appellants who were present at the meeting were estopped from challenging the validity of the call; (iii) whether the amounts claimed to have been paid in excess of the initial allotment money were proved and liable to be credited.

Issue (i): whether the call made under the directors' resolution was valid in the absence of a fixed time for payment and in view of the unequal call structure

Analysis: The articles of association required a call to specify the time of payment, and the omission to fix that time rendered the call defective. The company had not adopted the power under section 49 of the Indian Companies Act, 1913, to make different arrangements between shareholders as to amounts and times of payment of calls. The resolution therefore could not sustain a discriminatory call structure between directors and other shareholders, and the alleged notice did not cure the defect because its contents were not proved.

Conclusion: The call was not valid against the appellants who were not bound by their participation in the resolution.

Issue (ii): whether the appellants who were present at the meeting were estopped from challenging the validity of the call

Analysis: The three appellants who attended and participated in the meeting had themselves agreed to pay the unpaid balance on their shares. For them, the want of a fixed time, the discriminatory nature of the call, and the absence of separate notice did not assist, because they were parties to the resolution and could not rely on defects which they had themselves accepted. Their liability therefore arose immediately on the resolution.

Conclusion: The three appellants who were present at the meeting were estopped from disputing the call and remained liable.

Issue (iii): whether the amounts claimed to have been paid in excess of the initial allotment money were proved and liable to be credited

Analysis: The additional payments claimed by some appellants were not proved by reliable evidence. In one appellant's case, the later payment was admitted as advance call money and had to be given credit, reducing the demand accordingly. In the remaining cases, the alleged payments were either unsupported or not shown to have been made to the company.

Conclusion: Credit was allowed only to the extent of the proved advance call payment in one appellant's case; the other additional payment claims failed.

Final Conclusion: The appeals succeeded only for the appellants who were not present at the meeting and could not be bound by the impugned call, while the appellants who had participated in the resolution remained liable under it.

Ratio Decidendi: A call on shares must comply with the article requiring fixation of the time of payment and with the statutory limits on unequal calls, but shareholders who were parties to the resolution may be estopped from challenging defects in the call as against themselves.

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