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Issues Involved:
1. Question of Limitation under Section 235 of the Indian Companies Act. 2. Applicability of Articles of the Indian Limitation Act. 3. Rights and liabilities of liquidators, creditors, and contributories. 4. Comparative analysis of English and Indian company law provisions. 5. Interpretation of Section 235 and its sub-sections. Detailed Analysis: 1. Question of Limitation under Section 235 of the Indian Companies Act: The U.P. Oil Mills Company Ltd. went into liquidation, and the official liquidator filed an application under Section 235 of the Indian Companies Act against the managing agents for misfeasance and other wrongful acts. The main issue was whether the application was barred by limitation. The court examined whether Section 235 created a new right or merely provided a summary procedure for enforcing existing rights. 2. Applicability of Articles of the Indian Limitation Act: The court compared Section 235 with Sections 156 and 186 of the same Act and reviewed the case law to determine the appropriate Article of the Indian Limitation Act applicable to the application. The court noted that Article 36 was applied in some cases, while Article 120 was deemed appropriate in others. The court concluded that Article 120 was the most suitable, as it prescribes a period of limitation starting from the date when the right to sue accrues, which in this case, was the date of liquidation. 3. Rights and Liabilities of Liquidators, Creditors, and Contributories: The court discussed the roles and rights of liquidators, creditors, and contributories under Section 235. It was emphasized that the liquidator is an officer of the court and not a representative of the company. The application under Section 235 is not filed in the liquidator's personal capacity but on behalf of the company. The court also noted that creditors and contributories could apply under Section 235, but their applications are for the benefit of the entire body of creditors and contributories, not for personal gain. 4. Comparative Analysis of English and Indian Company Law Provisions: The court reviewed English case law and noted that the corresponding English sections did not create new rights but provided a summary procedure for enforcing existing rights. The court cited cases like Stringer's case and Hansraj Gupta's case to illustrate that the principles laid down by the Privy Council in interpreting similar provisions in English law should be applied to Section 235 of the Indian Companies Act. The court emphasized that Section 235 is a procedural section and does not create a new foundation for claims. 5. Interpretation of Section 235 and its Sub-sections: The court interpreted Section 235 and its sub-sections, emphasizing that the section provides a summary procedure for enforcing existing rights and does not create new rights. Sub-section (3) was highlighted as making the Limitation Act applicable to applications under Section 235 as if they were suits, thereby preserving the right of defense under the Limitation Act. The court concluded that there is no fresh start for purposes of limitation from the date of liquidation proceedings, and the appropriate Article of the Limitation Act would continue to apply as if a suit were filed on behalf of the company. Judgment: The court held that the winding-up order does not give a fresh start for purposes of limitation to a liquidator, contributory, or creditor. The relevant Article of the Limitation Act, which would be appropriate according to the relief sought, would be applicable as if it were a suit brought for seeking the same relief on behalf of the company. The court agreed with the view that Article 120 was applicable, but the starting point of limitation must be the date of liquidation. The court also noted that the principles laid down by the Privy Council in Hansraj Gupta's case were of equal application to Section 235, and the view that there is a fresh start of limitation from the date of liquidation proceedings was no longer good law.
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