1994 (4) TMI 342 - HC - Companies Law

Summary

Issues Involved:
1. Effect of non-issuance of 'C' forms by the petitioner-company to the respondent.
2. Whether the official liquidator is bound by the respondent's liabilities of the company before the passing of the winding up order.
3. Whether the claim of the petitioner is barred by limitation.
4. Whether the respondent is entitled to an amount of Rs. 27,174.28 by way of set-off.
5. Relief.

Issue-wise Detailed Analysis:

1. Effect of Non-Issuance of 'C' Forms by the Petitioner-Company to the Respondent:
The onus of proof was on the respondent-company. The respondent produced R. P. Mukheeja, Administrative Officer, as R.W-1, who did not state that the appellant-company was obligated to supply 'C' forms or that any amount was paid on behalf of the appellant-company due to the non-supply of 'C' forms. The court found no justification for deciding this issue in favor of the respondent-company. The finding on issue No. 1 was reversed and decided against the respondent-company.

2. Whether the Official Liquidator is Bound by the Respondent's Liabilities of the Company Before the Passing of the Winding Up Order:
The court found no circumstance or legal command holding the official liquidator responsible for the respondent's alleged liabilities of the company before the winding up order. The learned single judge's decision on this issue was not justified and was reversed.

3. Whether the Claim of the Petitioner is Barred by Limitation:
The Division Bench held that the period of limitation for an application for claim under section 446(2) of the Companies Act commences from the date of the winding up order, excluding the period from the date of commencement of winding up to the date of the winding up order, and an additional year following the winding up date. However, this calculation of limitation does not apply to set-off claims in petitions under sections 446 and 468 of the Act. The respondent's set-off claim was barred by time as it was filed in 1980 for transactions between February 22, 1974, and December 30, 1975. The learned company judge ignored this aspect, leading to an erroneous decision.

4. Whether the Respondent is Entitled to an Amount of Rs. 27,174.28 by Way of Set-Off:
The court examined the principles of set-off under Order 8, rule 6 of the Code of Civil Procedure, 1908, and found that the respondent's claim did not meet the required pre-conditions. The respondent's set-off claim was barred by limitation, and no mutual dealings or directions from the appellant-company were proven. The court noted that set-off claims must be legally recoverable and not barred by limitation. The learned company judge's decision to allow the set-off claim was reversed.

5. Relief:
The judgment of the learned company judge was set aside. The court allowed the appellant-company's claim petition and decreed the recovery of Rs. 7,189 along with 12% interest per annum from the date of the petition until payment. The respondent was ordered to pay the costs throughout.

Conclusion:
The appeal was allowed, and the judgment of the learned company judge was reversed. The appellant-company was entitled to recover Rs. 7,189 with interest and costs from the respondent.