1916. Present  : De Sampayo J.

SANKARA AYAR v. BECKET.

33-C. R. Colombo, 47,802.

Joint Stock company-Call made by directors from shareholders-Compulsory winding-up proceedings-Prescription.

The directors of a joint stock company registered in India under the Indian Companies Act, 1382. made a call in 1908 for the balance due on defendants shares, but the defendant did not pay it. In 1911 an order was made for the compulsory winding up of the company by the District Court of Tinnevelly (India). On October 9. 1912, the Court made order that the defendant should pay the balance due on his shares within four days of the service of the order, The defendant not having paid the amount, this action was instituted on October 7, 1915.

Held, that the claim was not barred by prescription. The ordinary liability of a shareholder to contribute his share of capital arises under the articles, but on a winding up it is converted into a statutory liability under section 63. of the Indian Companies Act, 1882.

The amount of contribution ordered by the Court can be re-covered, though the claim on the basis of sails originally made by the directors may have been barred by limitation before the winding up.

THE fasts are set out in the judgment.

A. St. V. Jayewardene (with him Mahadeva), for plaintiff, appellant.

Keuneman, for defendant, respondent.

Cur. adv. vult.

March 1, 1918. DE SAMPAYO J.-

The plaintiff, as fee official liquidator of the Swadeshi Steam Navigation Company, sues the defendant, who is the holder of three shares in the company, for the recovery of Rs. 86.29 as the amount of contribution, with interest, due by him towards the assets in the winding up of tie company. Though the amount claimed is small, the case involves an important point in the law relating to limitation of actions.

The Swadeshi Steam Navigation Company is a company registered in India under the Indian Companies Act, 1882. In September, 1907, the defendant was, on his application, allotted three shares of Rs. 25 each, for which he made the initial payment of Rs. 15. In 1908 the directors made a call for the balance due on the shares, but the defendant did not pay it. In 1911, the Company being in difficulty, the District Court of Tinnevelly made an order for its compulsory winding up, and the plaintiff was appointed official

liquidator. In September, 1912, the Court settled the list of contributors, and in the list the defendant was included as a con-tributary in respect of the balance due by him on his shares. On October 9, 1912, the Court made order that the defendant should pay the amount to the plaintiff within four days of the service of the order. The evidence is, and the Commissioner is satisfied, that the order was served on the defendant on October 10 or 11, 1912, and the defendant not having paid the amount this action was instituted on October 7, 1915.

If the date of the order or of its service is taken as the time when the. cause of action arose, this action cannot be said to have been prescribed. The Commissioner, however, on the footing that the cause of action arose in 1908, when the directors made the call,' held that the action was barred by prescription, and dismissed it. He is clearly wrong in taking no account of the winding-up proceedings. Section 61 of the Indian Companies Act, 1882, which corresponds to section 88 of the English Companies Act of 1862 and to section 128 of the Companies (Consolidation) Act, 1908, enacts that " In the event of the company formed under this Act being, wound up, every present and past member of such company shall be liable to contribute to the assets of the company," &c,

It is true that the ordinary liability of a shareholder to contribute his share of capital arises under the articles, but on a winding up it is converted into a statutory liability under the above section. The liability of a contributory as such is distinct fr