1982 (5) TMI 150 - HC - Companies Law

Summary

Issues Involved:

1. Whether the application is barred by time.
2. Whether the second respondent proved that he signed Exs. P-1 and P-2 without the knowledge of the contents of the same and, therefore, he was not liable under the said documents.
3. Whether the official liquidator is entitled to an order of this court as prayed for.

Issue-wise Detailed Analysis:

1. Whether the application is barred by time:

The court examined whether the claim application by the official liquidator was within the statutory time limits. The transaction, evidenced by Ex. P-1, concluded on May 26, 1975, and the last subscription paid by the first respondent was on May 23, 1975. The winding-up petition was presented on March 1, 1979, and the winding-up order was made on July 13, 1979. The court noted that the right to sue accrues to the official liquidator from the date the winding-up order is made, giving him three years plus an additional year under section 458A of the Companies Act, read with article 137 of the Limitation Act. However, since the claim against the first respondent was barred by time by the date of the winding-up petition, the court concluded that there was no legally enforceable claim against the first respondent under section 446(2)(b) of the Companies Act. The court rejected the argument that the mortgage created by the second respondent should extend the limitation period to 12 years under article 62 of the Limitation Act, as the application was not filed as a suit under section 446(2)(a) of the Companies Act. Thus, the application was deemed barred by limitation.

2. Whether the second respondent proved that he signed Exs. P-1 and P-2 without the knowledge of the contents of the same and, therefore, he was not liable under the said documents:

The second respondent claimed that he signed the documents without knowing their contents and under the belief that he was merely standing as a surety for the first respondent. He admitted signing the documents but denied understanding their implications, asserting that he was misled by the first respondent. The court noted that the second respondent's admissions in his statement of objections and during cross-examination weakened his defense. He admitted to signing the promissory note and the mortgage deed, but claimed ignorance of their contents. The court did not make a definitive ruling on this issue, as it was unnecessary due to the application being barred by time.

3. Whether the official liquidator is entitled to an order of this court as prayed for:

Given the determination that the application was barred by time, the court did not proceed to assess the merits of the official liquidator's claim for the sum of Rs. 15,331.70 plus interest. The court suggested that the official liquidator could file a suit to enforce the rights under the mortgage created by the second respondent, but did not rule on the entitlement to the claimed amount in the present application.

Conclusion:

The application by the official liquidator was dismissed on the grounds of being barred by limitation. The court reserved the liberty for the official liquidator to enforce his rights under the mortgage through appropriate legal proceedings, without prejudice to the defenses available to the second respondent in such proceedings. No order as to costs was made.