BABU LAL Vs. NARAINA SUGAR AND GENERAL MILLS LTD. AND ANOTHER
LAWS(P&H)-1957-8-16
HIGH COURT OF PUNJAB AND HARYANA
Decided on August 20,1957

Appellant
VERSUS
Respondents

JUDGEMENT

Mehar Singh J. - (1.) This judgment will dispose of three first appeals, Nos. 70-D, 71-D and 96-D of 1954, from the order dated April 14, 1954, of the District Judge of Delhi, whereby objection applications of the three appellants, Babu Lal, Om Parkash and Kanhaya Lal, to being included in the list of contributories of Naraina Sugar and General Mills Ltd. (in liquidation), Delhi, were dismissed with costs.
(2.) In the court below each one of the appellants sought exclusion from the list of contributories on the grounds, (a) that he never made an application for the allotment of shares, (b) that he did not pay any amount with any such application for allotment of shares, and (c) that he did not subscribe to the memorandum of association of the company. The learned trial Judge found that the last ground was not true and that the fact is that each one of the appellants did subscribe to the memorandum of association of the company. The learned counsel appearing for the appellants points out that in fact at the hearing before the learned trial Judge, it was conceded on behalf of the appellants that each had subscribed to the memorandum. On the other two grounds, the learned trial Judge has found that one of the appellants, Babu Lal, attended the meetings of the directors of the company even after incorporation and so did the other two appellants. That was because he thought that the company had probably been registered before April 10, 1949, but the fact is that it was registered on May 5, 1949, as is clear from the evidence of John Albert, O.W. 1, a clerk of the office of the Registrar, Joint Stock Companies, Delhi. So that the other two appellants are not shown to have attended any meeting of the board of directors of the company after the incorporation of the company. In any case, the learned trial Judge has further found that the name of each of the appellants appears in the register of the company as its member and after the winding up the liability arises from the mere fact under the law and not necessarily in consequence of any contract. The objection application of each appellant has thus been dismissed as stated above.
(3.) The learned counsel appearing for the appellants has urged the case of each appellant on the same grounds as in the trial court but it is not really necessary to go into those grounds at all, though I agree with the conclusion of the learned trial Judge in this behalf, for the case on the side of the respondent, liquidator of the company, is (a) that the name of each appellant is to remain in the list of contributories of the company merely because he subscribed to the memorandum of association of the company and (b) that the name of each appellant on winding up of the company appears as a member in the register, and upon this basis his name must appear as a contributory in the list of contributories. The learned counsel for the appellants in reply point out that subscription to the memorandum of association is no more than at the must a mere application for allotment of shares and since no shares were allotted within a reasonable time and no allotment was intimated to any of the appellants, subscription to the memorandum of association does not fix liability on him. His further argument is that although it is true that the name of each appellant appears in the register of the members of the company but that alone is not enough because it appears in that register without there being a contract between the appellant and the company for the taking of the shares and thus fixing liability on the appellant.;


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