1994 (5) TMI 225 - HC - Companies Law

Summary

Issues Involved:
1. Whether the amount of Rs. 1.10 lakhs, which was admittedly lying in deposit with the company, was paid back to the petitioner as alleged by the company.
2. Whether the claim of the petitioner has become barred by time.

Detailed Analysis:

Issue 1: Repayment of Rs. 1.10 Lakhs
The petitioner deposited Rs. 1.10 lakhs with the company for the allotment of 110 shares. The company admitted receipt of this amount but claimed it was repaid in 1988 as part of a settlement in a civil suit. The company relied on two documents, annexures R-1 and R-2, to support their claim. Annexure R-1 is the petitioner's statement in a civil suit indicating a settlement of Rs. 1.50 lakhs, and annexure R-2 is the court order dismissing the suit.

The court analyzed the statement and the suit's context, which involved a dispute over 62 equity shares, not the Rs. 1.10 lakhs. The court found no mention of the Rs. 1.10 lakhs in the settlement statement, and noted that the Rs. 1.50 lakhs was paid by defendants Nos. 4 to 14, not the company. The court concluded that the Rs. 1.10 lakhs was not included in the settlement and that the company's claim of repayment was unsubstantiated.

The court also noted suspicious conduct by the company, such as claiming to receive an empty registered envelope and not providing proof of replies to the petitioner's statutory notices. The court inferred that the company's defense was false and not in good faith.

Issue 2: Limitation Period for Claim
The court addressed whether the petitioner's claim was time-barred. The petitioner argued that the claim was governed by article 70 of the Limitation Act, 1963, which provides a three-year limitation period from the date of refusal after demand. The company contended that article 24, which provides a three-year limitation period from the date the money was received, was applicable.

The court agreed with the company, stating that article 24 was applicable because the money was received for the petitioner's use (allotment of shares) and not as a deposit. The court held that the three-year limitation period began in 1982 when the money was received, making the claim time-barred by the time the petition was filed in 1993.

Conclusion:
The court concluded that the petitioner's claim was barred by time under article 24 of the Limitation Act, 1963. Despite the company's false defense, the court dismissed the petition on the grounds of the claim being time-barred. Each party was left to bear its own costs.