AI Drafter 
TaxTMI 
TaxTMI 
1933 (3) TMI 19
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....r, is a joint stock company registered under Section 17, Act VII of 1913, with its head office at Lakhimpur. It has sued the defendant Sardar Jasjit Singh, through its late managing agent Lala Har Kishun Lal. The defendant, Sardar Jasjit Singh, agreed to purchase one hundred shares in the plaintiff corporation each valued at Rs. 100 on 30th September, 1922, and on 28th October, 1922, Rs. 1,000 were deposited by him by means of a cheque in respect of 100 shares, and on 16th November, 1922, one hundred shares were entered in the register of the company in the name of the defendant, Sardar Jasjit Singh, and from that date the defendant became a shareholder in the plaintiff company. The plaintiff corporation later on demanded the remaining sum ....
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....ordinate Judge: (1) Is the claim in respect of all the calls and the allotment money within limitation ? (2) Has the plaintiff a fresh cause of action from the date of the alleged forfeiture of the shares ? (3) Has he plaintiff no right to forfeit the shares ? (4) Is the stipulation as to forfeiture of shares as also for realization of the full amount of the shares with interest penal ? If so, its effect ? (5) How does the fact that the plaintiff took no steps to enforce his claim by sale of the shares affect the present suit ? (6) Is the plaintiff entitled to any and what rate of interest? (7) Is the plaintiff entitled to sue in respect of the money due under Article 39 of the Articles of Association in spite of his having allowed the peri....
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....2,000 due on 16th December, 1924, on account of 20 per cent. third call. (5) Rs. 2,000 due on 16th March, 1925 on account of 20 per cent. final call; total Rs. 9,000. Thus it is clear from the statement of the plaintiff's own counsel that the forfeiture of the shares on 8th August, 1929, happened three years beyond the dates when the respective calls set forth above became due. In other words, the forfeiture of the defendant's shares took place when a suit by the plaintiff company for recovery of "call" money had become time-barred under Article 112, Schedule 1, Limitation Act. Article 112, Limitation Act, lays down that the period of limitation for a suit for recovery, of "call" money by a company registered under any Statute or Act is ....
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....Court reported in Habib Rowji v. Standard Aluminium and Brass Works Ltd., in which it was held that although on the forfeiture of the shares the defendant had ceased to be a member of the company and liable in that case to be sued for past calls, the foundation of the suit was the special contract contained in Article 32 of the articles of association under which a fresh liability was created to pay all calls and other money owing in respect of the shares at the time of forfeiture, and inasmuch as the cause of action thereon had not arisen till the forfeiture, the suit was not barred. We regret we are unable to accept the contentions advanced on behalf of the plaintiff company by their learned counsel, Mr. Akhtar Husain. In the case cite....
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....e the rule of limitation prescribed under Article 112, Limitation Act. It is clear that the forfeiture of the shares of defendant by the plaintiff company cannot revive debts which had become time-barred. Article 39 of the articles of association of the plaintiff company merely has the effect of keeping alive the claim of the plaintiff against the quondam shareholder whose shares have been forfeited in respect of moneys legally recoverable at the time of forfeiture. The learned counsel for the plaintiff-appellant has also relied upon a ruling of the Bombay High Court reported in Maneklal Mansukhbai v. Suryapur Mills Co., Ltd. In this case the ruling reported in Habib Rowji v. The Standard Aluminium and Brass Works, Ltd, was followed. Thi....
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.... in Maneklal Mansukhbhai v. Suryafur Mills Co. Ltd., has therefore no applicability to the facts of the present case. Similarly, in Prayan Prasad v. Gaya Bank and Trades Association, Ltd., it was held by their Lordships of the Patna High Court that the fact that the company could not realize the call money by reason of lapse of time was no answer to the claim made by the liquidator. In this case the rulings of the Bombay and Allahabad High Courts cited above were approved of and followed. So too in the matter of Dehra Dun Mussoorie Electric Tramway Co., Ltd., it was held by a learned Judge of the Allahabad High Court that liquidation gave the official liquidators a cause of action which the company may not by itself have possessed, and it w....