1958 (1) TMI 20 - HC - Companies Law

Issues Involved:
1. Determination of the proper amount due from the company to the claimants.
2. Whether the claims were wrongly rejected as time-barred.
3. Application of Section 19 of the Indian Limitation Act regarding acknowledgment of debts.

Detailed Analysis:

1. Determination of the Proper Amount Due from the Company to the Claimants:
The court had to settle the list of creditors and determine the exact amounts due to each claimant. The official liquidator had partly accepted and partly rejected several claims, leading to disputes that required judicial resolution.

2. Whether the Claims Were Wrongly Rejected as Time-Barred:
The primary contention was whether the claims were time-barred. The claimants argued that the relevant date for determining the limitation period was the date of the petition for winding up (April 21, 1952), not the date of the winding up order (September 23, 1953). The court examined the provisions of Sections 168, 171, and 227 of the Indian Companies Act, 1913. Section 168 states that the winding up of a company by the court is deemed to commence at the time of the presentation of the petition for winding up. Section 171 imposes a statutory bar on suits or legal proceedings against the company after a winding up order is made. The court concluded that the material date for limitation purposes is the date of the winding up order, not the date of the petition. This interpretation aligns with the principle that limitation continues to run unless explicitly stopped by statutory provisions. The court rejected the claimants' argument that Section 168 should extend the limitation period to the date of the petition.

3. Application of Section 19 of the Indian Limitation Act Regarding Acknowledgment of Debts:
The court also considered whether the claims were acknowledged in the company's balance-sheet, thereby extending the limitation period under Section 19 of the Indian Limitation Act. The court examined individual claims:

- Shri A.K. Bhalla: Claimed Rs. 55,133-15-0. The official liquidator allowed Rs. 17,161-2-9. The court found an acknowledgment in the balance-sheet for Rs. 36,695-4-9, making the total claim Rs. 50,606-7-6, which was within time.
- Shrimati Yash Kumari Bhalla: Claimed Rs. 11,081-15-0. The balance-sheet acknowledged Rs. 9,340-4-0. Adding interest, the total claim was Rs. 10,100-8-0, which was within time.
- Shri Bhagwan Das: Claimed Rs. 68,500. The official liquidator allowed Rs. 9,616-10-9. The balance-sheet acknowledged Rs. 52,355-2-9. The total claim was Rs. 60,346-13-6, which was within time.
- Dr. Tara Chand: Claimed Rs. 7,588-6-0. The balance-sheet acknowledged Rs. 11,405-12-0. After payments, the remaining claim was Rs. 6,883, which was within time.
- Messrs. J.C. Bhalla & Co.: Claimed Rs. 1,666. The official liquidator allowed Rs. 35. The court found the full claim of Rs. 1,666 to be within time.
- Messrs. Ram Chand Puri and Sons: Claimed Rs. 2,359-7-9. The claim was found genuine but time-barred as of the winding up order date.

The court held that entries in the balance-sheet constituted an acknowledgment of debts under Section 19 of the Indian Limitation Act, extending the limitation period from the date of acknowledgment.

Conclusion:
The court determined the proper amounts due to each claimant based on acknowledgments in the company's balance-sheet and ruled that the material date for limitation purposes is the date of the winding up order. Claims acknowledged in the balance-sheet were found to be within time, while others were rejected as time-barred.

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