The term ”liability” has been defined as obligation, debt, etc. In First National Bank v. Sant Lal, AIR 1959 Punj 328, it is said that the term ‘liability’ is of large and comprehensive significance and when construed in its usual and ordinary sense, it expresses a state of being under obligation in law or in justice.
In Hindustan Laminators (P) Ltd. v. Central Bank of India, AIR 1998 Cal 300, Calcutta High Court has observed that word ‘liability’ obviously means obligation. Then it should be a liability which is alleged as due.
The term ‘due’ has different meanings. In State of Kerala v. V.S. Kalliyanikutty, JT 1999 (2) SC 540 the Supreme Court observed that ‘due’ means anything owning; that which one contracts to pay to another. It was in the context of Kerala Revenue Recovery Act, 1968.
In the context of the Companies Act, 1956, in Raymond Synthetics Ltd. v. Union of India, JT 1992 (1) SC 463, the court said that a debt is often said to be ‘due’ from a person where he is the party owing it; or primarily bound to pay, whether the time for payment has or has not arrived.
In the context of Income Tax Act, 1961, in CIT v. Southern Roadways Ltd., 2004 (266) ITR 135, the Madras High Court said that the word ‘due’ is used to refer to the debt or obligation which has become immediately payable. In CIT v. United Provinces Electric Supply Company, 2000 (244) ITR 764, the Apex Court while affirming above view of the Madras High Court observed that the initial determination is a pre-requisite for regarding that amount as having become ‘due’.
In Harshad Shantilal Mehta v. Custodian, 1998 (231) ITR 871 the Apex Court observed that ‘due’ means payable, justly owed.
In Munsif Jahan v. Rajendra Prasad, AIR 1946 Oudh 226, the terms ‘due’ and ‘payable’ came to be considered. The court said that they are not convertible terms. A ;debt’ is said to be ‘due’ as soon as it has existence as a debt, though it may be payable on a future date. M/s B.K. Jewellers v. State Bank of India, 2016 (116) ALR 791.