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1. Interpretation of section 446(2)(b) of the Companies Act, 1956 regarding the applicability of the Limitation Act to recovery applications by a company in liquidation against former customers. Analysis: The judgment by the High Court of Delhi, delivered by Justice P.N. Khanna, focused on the question of whether an application made by a company in liquidation against a former customer for the recovery of goods sold is governed by the Limitation Act. The case involved the winding up of a company and a subsequent application by the official liquidator against one of its former customers. The respondent disputed the amount claimed, arguing that the claim was barred by limitation under Article 14 of the Limitation Act, 1963, which sets a three-year limit from the date of delivery of goods. The official liquidator contended that as per the Companies Act, no specific limitation period applied to such applications, and Article 14 pertained to suits, not applications. The court examined the provisions of section 446(2) of the Companies Act, emphasizing that it empowered the company court to entertain claims made by or against the company, providing a special jurisdiction and procedure for obtaining relief. The court clarified that a claim under this provision must be legally enforceable and not barred by limitation. Referring to precedents, the court established that claims unenforceable under the law of limitation cannot be pursued under section 446(2)(b). Consequently, the court rejected the petitioner's application against the respondent due to the time-barred nature of the claim, highlighting the importance of enforceability in such proceedings. The judgment highlighted the legislative intent behind the amendment to the Companies Act in 1960, which aimed to expedite winding-up proceedings by empowering the company court to entertain and decide all claims efficiently. The court differentiated between suits and applications under the Act, emphasizing that applications under section 446(2) were distinct from civil suits. It underscored that the company court's jurisdiction under clause (b) of the provision was discretionary and intended for enforceable claims, not to revive time-barred claims. By aligning the interpretation of the Companies Act with similar enactments and judicial precedents, the court emphasized the requirement for claims pursued under section 446(2)(b) to be legally enforceable. The judgment elucidated that the company court cannot entertain claims that have lapsed due to the law of limitation, ensuring that only viable claims are pursued through this provision. The court's decision to reject the application against the respondent due to the time-barred nature of the claim underscored the significance of legal enforceability in such proceedings, safeguarding against the revival of claims rendered unenforceable by limitation laws.
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