1988 (9) TMI 269 - HC - Companies Law

Summary

Issues Involved:
1. Limitation period for claims under Section 446(2)(b) of the Companies Act, 1956.
2. Applicability of Article 137 of the Limitation Act, 1963.
3. Exclusion of time under Section 458A of the Companies Act, 1956.

Issue-wise Detailed Analysis:

1. Limitation Period for Claims under Section 446(2)(b) of the Companies Act, 1956:
The appeals were against the decrees passed by the company judge on claims by the official liquidator under Section 446(2)(b) of the Companies Act, 1956. The claims related to amounts due to the company in liquidation. The main plea by the respondents-appellants was one of limitation. The winding-up of the company commenced on October 1, 1973, and the winding-up order was passed on December 20, 1973. The claims were filed on February 28, 1978. The respondents argued that the exclusion of time under Section 458A of the Companies Act could not relate to any period before the winding-up order.

2. Applicability of Article 137 of the Limitation Act, 1963:
The company judge held that a claim under Section 446(2)(b) is an application falling under Article 137 of the Limitation Act, with the limitation starting from the date of the winding-up order. The Supreme Court in Kerala State Electricity Board v. T.P. Kunhaliumma held that Article 137 applies to applications under special enactments, including the Companies Act. A Full Bench of the Delhi High Court in Faridabad Cold Storage and Allied Industry v. Official Liquidator held that Article 137 applies to claims under Section 446(2)(b), with a limitation period of three years from the winding-up order date.

3. Exclusion of Time under Section 458A of the Companies Act, 1956:
Section 458A excludes two periods in computing the limitation period: (i) from the commencement of winding up to the winding-up order date, and (ii) a further one year following the winding-up order. The learned judge held that these periods are to be excluded in computing the limitation under Article 137. The Supreme Court in Sudarsan Chits (P.) Ltd. v. G. Sukumaran Pillai provided the historical evolution of Section 446, emphasizing its purpose to avoid delays and expenses in winding-up proceedings by conferring jurisdiction on the winding-up court to entertain claims.

The Punjab and Haryana High Court in Official Liquidator, Punjab Finance Pvt. Ltd. v. Mohan Lal and other courts held that under Section 458A, the period taken in winding-up proceedings and an additional one year after the winding-up order should be excluded. The Karnataka High Court in Unico Trading and Chit Funds (India) P. Ltd. v. S.H. Lohati also held that the relevant date for computing limitation is the winding-up order date, and Article 137 applies, with the claimant entitled to the benefits of Section 458A.

Conclusion:
The court concluded that the starting point of limitation for claims under Section 446(2)(b) is the date of the winding-up order or the appointment of a provisional liquidator. Article 137 of the Limitation Act applies, and Section 458A excludes the specified periods in computing the limitation. The appeals were dismissed as the claims were within the limitation period after excluding the periods under Section 458A.