MARULASIDDANNA GOWDA Vs. MAHADEVANAIK AND CVEERAPPA LIQUIDATORS MYSORE MALLEABLE IRON AND STEEL

JUDGEMENT

(1.) This appeal raises many interesting questions. Defendant who is the appellant before this Court was a share-holder of the Mysore Malleable Iron and Steel Foundry, Ltd., Harihar. He had purchased 100 ordinary shares of the company of the value of Rs. 50/- each. He paid a sum of Rs. 3500/- towards the share amount. There was still an outstanding balance of Rs. 1500/- in respect of the amount due for the purchase of those shares. On 30-11-1949, the company made a demand for the balance due by the defendant-appellant. But no amount was paid by the defendant. By an extra-ordinary resolution passed by the share-holders of the said company it went into voluntary liquidation on 12-1-1953. The plaintiffs were appointed as liquidators. Plaintiffs are the respondents before this Court. On their assumption of the office of liquidators, they issued a notice dated 19-7-1954 marked as Exhibit P-2 in the case calling upon the defendant to pay a sum of Rs. 1500/- together with interest thereon and when he failed to do so, they filed a suit on 14-7-1955.

(2.) The defendant contended that the liquidators had no right to sue him, they should have taken the permission of the Court to file the suit and hence the suit itself is not maintainable. He also pleaded that the plaintiffs' suit was barred by limitation, and Article 112 of the Limitation Act applied to the case which prescribes a period of three years. Counting that period from the date of the demand by the Directors of the company on 30-11-1949, the defendant contended, the plaintiffs' suit was barred by limitation.

(3.) Both the learned Munsiff of Davangere as well as the Civil Judge, Chitradurga concurrently held against the defendant. Both the Courts held that the liquidators had every right to file a suit. In a case of voluntary liquidation, permission of the Court was not needed for so doing. They also held that Article 112 applied only to the case of calls made by a company but did not apply to the calls made by the liquidators. According to the learned Judges, the residuary Article 120 applied in such a case. Hence they decreed the plaintiffs' suit. Aggrieved by those judgments and decrees, the defendant has preferred this second appeal.