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Issues Involved:
1. Whether the claim of M/s. Ram Chand Puri and Sons is barred by limitation. Issue-wise Detailed Analysis: 1. Whether the claim of M/s. Ram Chand Puri and Sons is barred by limitation: Background: The appeal under Clause 10 of the Letters Patent challenges an order by the learned Company Judge regarding the settlement of the list of creditors. The specific creditor in question is M/s. Ram Chand Puri and Sons, with a debt of Rs. 2,359-7-9 owed by Lahore Enamelling and Stamping Co., Ltd. (in liquidation). The Company Judge had rejected the creditor's claim on the grounds that it was barred by time. Key Dates and Admission: The petition for winding up was presented on April 21, 1952, and the winding-up order was made on September 23, 1953. It is admitted that the debt was within limitation when the winding-up petition was filed but became barred by the time the winding-up order was made. Legal Question: The central question is whether a provable debt is assessed based on the date of the winding-up order or the date of the winding-up petition. Company Judge's View: The Company Judge concluded that the relevant date for determining the provability of a debt is the date of the winding-up order, not the date of the petition. He reasoned that there is no bar against initiating proceedings against a company until the winding-up order is made. He emphasized that creditors should not speculate on the success of the winding-up petition and allow their claims to become barred by time. Relevant Legal Provisions: - Section 229 of the Companies Act: This section aligns the rules for provable debts in company winding-up with those in insolvency law. - Section 168 of the Companies Act: States that winding up of a company by the Courts commences at the time of the presentation of the petition. - Section 171 of the Companies Act: Places an embargo on certain types of proceedings after the winding-up order is made. - Section 167 of the Companies Act: States that an order for winding up operates in favor of all creditors as if made on their joint petition. Insolvency Law Analogy: Under insolvency law, debts provable are those within limitation on the date the insolvency application is made. This is supported by several case laws: - Nizam v. Babu Ram AIR 1933 Lah 688: Held that debts within limitation on the date of the insolvency application are provable. - Byramji Bomanji v. Official Assignee, Bombay AIR 1936 Bom 130: Similar conclusion under the Presidency Towns Insolvency Act. - Subramania Iyer v. Meenakshisundaram Chettiar AIR 1937 Mad 577: Confirmed that limitation stops on the filing of an insolvency application. - Jwala Prasad v. Jwala Bank Ltd., (S) AIR 1957 All 143: Held that the date of the winding-up application is the relevant date for computing limitation. Contrary Cases: - Hem Raj v. Krishan Lal AIR 1928 Lah 361: Discussed Section 53 of the Provincial Insolvency Act, which does not admit modification by Section 28(7). - Magandas Bhukandas v. Bhalchandra Ramrao AIR 1954 Bom 436: Similar conclusion regarding Section 78(2) of the Provincial Insolvency Act. - Fatma Bi v. Nagoorkhan AIR 1932 Mad 287 (FB): Did not raise the point of the date of the insolvency application for computing limitation. Court's Conclusion: The Court found that there is a close analogy between insolvency law and the Companies Act due to Section 229. It held that debts provable on the date of the filing of the winding-up petition are deemed provable debts. The Court disagreed with the Company Judge's view that the law of limitation is unaffected by the winding-up petition, emphasizing that the winding-up order relates back to the date of the petition. Final Judgment: The appeal was allowed, and the order of the learned Company Judge was set aside. The claim of M/s. Ram Chand Puri and Sons for Rs. 2,359-7-9 was held to be proved and not barred by limitation. The appellant was awarded costs in the appeal. Concurring Opinion: The concurring judge agreed with the Chief Justice's judgment. Summary: The High Court of Punjab and Haryana held that for the purposes of limitation, the relevant date for proving a debt in a company winding-up proceeding is the date of the filing of the winding-up petition, not the date of the winding-up order. Consequently, the claim of M/s. Ram Chand Puri and Sons was deemed provable and not barred by limitation, thus allowing the appeal and setting aside the Company Judge's order.
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