1961 (1) TMI 33 - HC - Companies Law

Summary

Issues Involved:
1. Bar of Limitation for the Claim of Remuneration
2. Exclusion of Time under Section 14 of the Indian Limitation Act
3. Creation of Charge on the Assets of the Company
4. Acknowledgment of Liability under Section 19 of the Indian Limitation Act

Detailed Analysis:

1. Bar of Limitation for the Claim of Remuneration
The primary issue in this appeal is whether the appellant's claim for remuneration for the period beyond three years before the winding-up order is barred by limitation. The court noted that, as a simple money claim, the appellant is not entitled to claim remuneration for a period beyond three years prior to the date of the winding up unless an extended period of limitation is available under the Indian Limitation Act.

2. Exclusion of Time under Section 14 of the Indian Limitation Act
The appellant contended that the time occupied by the proceedings in O.S. No. 228 of 1949 should be excluded in computing the period of limitation under Section 14 of the Indian Limitation Act. The court rejected this contention, stating that the proceedings in O.S. No. 228 of 1949 were not founded on the same cause of action as the current claim and that the Sub-Court, Madurai, which dismissed the suit, was not unable to entertain it due to a defect of jurisdiction or other similar cause. Therefore, Section 14 of the Indian Limitation Act has no application to the present case.

3. Creation of Charge on the Assets of the Company
The appellant argued that he was entitled to a charge on the assets of the company, relying on a clause in the managing agency agreement. The court examined the clause and concluded that no charge was created over the assets of the company regarding the remuneration payable to the managing agents. The charge was only in respect of any claim by way of indemnity for liabilities or obligations incurred by the firm on behalf of the company. Thus, the appellant's claim is a simple money claim without a charge or lien on the company's assets.

4. Acknowledgment of Liability under Section 19 of the Indian Limitation Act
The appellant's final contention was based on an alleged acknowledgment of liability contained in exhibit A-4, a list of creditors signed by the appellant. The court scrutinized exhibit A-4 and found that it did not constitute an acknowledgment of liability on behalf of the company. The list was signed by the appellant, who claimed to be the creditor, and there was no evidence that he filed the statement on behalf of the company or as a duly authorized agent. The court referred to several precedents, including Sukumari Gupta v. Direndra Nath Roy, Coliseum (Barrow) Ltd. In re, Ledingham v. Bermejo Estancia Co. Ltd., and Transplanters (Holding Company) Ltd. In re, to support its conclusion that exhibit A-4 could not operate as a valid acknowledgment of a debt due to himself by the company within the meaning of Section 19 of the Indian Limitation Act.

Conclusion:
The appeal was dismissed with costs, affirming that the appellant's claim for remuneration beyond three years prior to the winding-up order is barred by limitation. The contentions regarding exclusion of time under Section 14, creation of a charge on the company's assets, and acknowledgment of liability under Section 19 of the Indian Limitation Act were all rejected.