2006 (10) TMI 243 - HC - Companies Law

Summary

Issues:
1. Whether the application is barred by time?
2. Whether the applicant has proved that the respondent is liable to pay Rs. 5,29,947 with interest at 21 per cent per annum from 1-9-1996 to the date of payment?
3. What is the final order?

Analysis:

Issue 1:
The respondent argued that the application is time-barred as per the Limitation Act, citing the promissory note date of 20-7-1989. The Full Bench decision highlighted that the period of limitation for claims under section 446(2)(b) of the Companies Act is determined by the relevant Article in the Limitation Act. Excluding the period from the commencement of winding up to the winding up order and one year thereafter, the application should have been filed by 4-12-1997. However, the application was filed on 30-10-2000, clearly beyond the prescribed time limit. The alleged payment acknowledgment on 31-8-1996 was deemed ineffective as it was made after the period of limitation. The court held the application as time-barred, leading to the dismissal of the claim.

Issue 2:
The applicant failed to establish the respondent's liability to pay the claimed amount with interest. Despite the promissory note and the applicant's contentions, the court found the application deficient in proving the respondent's obligation to repay Rs. 5,29,947 with interest. Consequently, the court answered this issue in the negative, indicating that the applicant was not entitled to recover the amount sought in the application.

Final Order:
Based on the findings regarding the time-barred nature of the application and the lack of proof of the respondent's liability, the court dismissed the Company application as barred by time. Therefore, the applicant was not granted the requested recovery of Rs. 5,29,947 with interest at 21 per cent per annum, leading to the rejection of the application.