What is the meaning of “Contributory”? (Section 428 of the Companies Act)

When does the liability of the contributory arise? A contributory shall be required to contribute towards the assets of the company in the following circumstances:

1. In case the assets fall short for the payment of company’s debts, liabilities and the cost of liquidation; or

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2. In case money is required for the adjustment of the rights of contributories as between themselves. Holders of partly paid shares may be required to contribute in order to bring them at par with those shareholders who have paid in full.