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Issues:
Petitions seeking to wind up companies based on claims barred by time during the pendency of the petitions. Detailed Analysis: Issue 1: Claim Barred by Time The judgment addresses the question of whether a claim that becomes time-barred during the pendency of a winding-up petition can be a legitimate basis for winding-up proceedings. It distinguishes between the concepts of "right" and "remedy," emphasizing that while the remedy is extinguished when a claim is barred by time, the right of the creditor to the claim survives. The judgment clarifies that a creditor remains a creditor even if the claim is time-barred, and thus, has the standing to move the court for a winding-up order and to prove the debt during the winding-up process. Issue 2: Deemed Inability to Pay Debt The judgment examines whether a creditor can seek a winding-up order based on a company's deemed inability to pay a debt that is barred by time. It concludes that for a debt to be a valid basis for a winding-up order, it must be both "due" and recoverable in law. The judgment rejects the argument that the company's inability to pay debts should not be affected by the claims becoming time-barred during the proceedings, emphasizing that creditors cannot have a preferential right over ordinary creditors due to the bar of limitation. Issue 3: Relation Back Principle The judgment discusses the principle of "relation back" concerning the commencement of winding-up proceedings. It clarifies that the filing of a winding-up petition is not equivalent to filing a lawsuit, and the principle of relation back does not assist petitioners seeking winding-up orders based on time-barred claims. The judgment also dismisses the applicability of Section 14 of the Limitation Act in such cases, as winding-up petitions are not for adjudicating disputes but to determine the liability of the company to be wound up. Issue 4: Misuse of Court Process The judgment strongly condemns the misuse of winding-up petitions solely based on time-barred claims, labeling it as an abuse of the court's process. It criticizes such actions as a misuse of the special jurisdiction under the Companies Act and highlights the forum's vulnerability to misuse by creditors seeking cheaper legal remedies. Conclusion: Ultimately, the judgment dismisses the petitions seeking winding up of companies based on claims barred by time during the proceedings, emphasizing that such actions would be a misuse of the court's process and an abuse of the Companies Act's jurisdiction. The parties are directed to bear their respective costs, and the petitions are consequently dismissed.
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