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2015 (12) TMI 1670 - HC - Companies LawPeriod of limitation for claims filed by the Official Liquidator under clause (b) of sub-section (2) of Section 446 - winding up proceedings against the company in liquidation - Held that - In view of the law laid down in Karnataka Steel and Wire Products case (2002 (11) TMI 355 - SUPREME COURT OF INDIA) in respect of a legally enforceable claim which could have been made by the company on the date on which the application for winding up is made the Official Liquidator could file claim within a period of four years from the date of winding up order by taking the benefit of one year period immediately following the date of the winding up order as provided under Section 458A of the Act and the three years period provided under Article 137 of the Limitation Act. In that view of the matter all the claims filed by the Official Liquidator which are involved in these appeals are barred by limitation since such claims were filed beyond a period of four years from 4.4.1990 the date of winding up order.
Issues Involved:
1. Whether the claims filed by the Official Liquidator under clause (b) of sub-section (2) of Section 446 of the Companies Act are barred by limitation. Issue-wise Detailed Analysis: 1. Common Judgment and Background: These appeals arise from a common judgment dated 2.3.2001 by the Company Judge in several Company Claims (C.C.Nos.25/1994, 15/1994, 23/1994, 27/1994, 26/1994, 22/1994, 24/1994, and 2/1994) filed under C.P.No.57/1989. The company, M/s. Chandini Chits Private Ltd., was ordered to be wound up on 4.4.1990, and the Official Liquidator filed claims under Section 446(2)(b) of the Companies Act. 2. Appellants' Contention: The appellants argued that the claims were barred by limitation, even considering the extended period under Section 458A of the Companies Act. 3. Respondent's Argument: The Official Liquidator contended that the claims were within the limitation period when considering the periods prescribed under Section 458A of the Companies Act and Article 137 of the Limitation Act, 1963, supported by the Full Bench judgment in Ulahannan v. Wandoor Jupiter Chits (P) Ltd. 4. Legal Provisions and Interpretation: - Section 446(1) and (2) of the Companies Act: These sections deal with the jurisdiction of the Court in winding up proceedings and the stay of legal proceedings against the company. - Article 137 of the Limitation Act: Provides a three-year limitation period for applications for which no specific period is provided. - Section 458A of the Companies Act: Excludes the period from the commencement of winding up to the winding-up order and an additional one year from the limitation period. 5. Court's Analysis: - The Court reiterated that the period of limitation for claims under Section 446(2)(b) is governed by Article 137 of the Limitation Act, starting from the date of the winding-up order. - The effect of Section 458A is to exclude the period from the commencement of winding up to the date of the winding-up order and an additional one year from the limitation period. - The Court referred to precedents, including Faridabad Cold Storage and Allied Industry v. Official Liquidator of Ammonia Supplies Corpn. (P) Ltd., which held that the limitation period for such claims is three years from the date of the winding-up order, plus the exclusion period under Section 458A. 6. Application of Precedents: - The Court emphasized the ruling in Karnataka Steel and Wire Products v. Kohinoor Rolling Shutters and Engg. Works, which clarified that Section 458A does not revive barred claims but merely extends the limitation period for enforceable claims. - The judgment in Ulahannan v. Wandoor Jupiter Chits (P) Ltd., which allowed claims filed beyond four years from the winding-up order, was deemed not good law in light of the Apex Court's ruling in Karnataka Steel. 7. Conclusion on Limitation: - The Court concluded that the Official Liquidator's claims, filed beyond four years from the winding-up order (4.4.1990), were barred by limitation. - Consequently, the judgment of the Company Judge dated 2.3.2001 was set aside, and the claims were dismissed as barred by limitation. Final Judgment: The appeals were allowed, and the claims filed by the Official Liquidator were dismissed as barred by limitation. No order as to costs was made.
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