1976 (11) TMI 144 - HC - Companies Law

Winding up Delivery of property to liquidator, Power of court to assess damages against delinquent directors, etc.

Summary

Issues:
- Appeal against dismissal of application under section 518 read with section 468 of the Companies Act, 1956.
- Determination of time-barred claim and liability of the respondent.
- Interpretation of section 468 of the Companies Act regarding the limitation period.
- Assessment of evidence and liability based on the entries in the books of account and the statement of the managing director.

Analysis:

The High Court of Punjab and Haryana heard a letters patent appeal against the dismissal of an application under section 518 read with section 468 of the Companies Act, 1956. The appellant, a company wound up by voluntary liquidation, sought to recover dues from a former agent. The respondent had failed to remit collected money to the company. The single judge dismissed the petition citing time-bar under the Indian Limitation Act and the Companies Act. The High Court analyzed the provisions of section 468 of the Act, emphasizing that it allows the court to direct payment or delivery of money or property by any employee of the company at any time after winding-up. The court held that the claim was not time-barred as the respondent, an agent, did not fall under the categories specified in section 543 of the Act, which has a limitation period. The court referred to a previous judgment to support its interpretation of section 468 and the absence of a limitation period, thereby overturning the single judge's decision on the time-barred claim.

Regarding the evidence and liability, the court considered the statement of the managing director and the entries in the company's books of account. The single judge had ruled that the entries were not sufficient primary evidence to establish liability. However, the High Court disagreed, citing section 34 of the Indian Evidence Act, which deems entries in regularly kept business accounts relevant but not solely adequate to establish liability. The court found that the managing director's statement, coupled with the account entries, provided enough evidence to hold the respondent liable for the outstanding amount. The court reversed the single judge's decision on the evidence and concluded that the respondent was liable to pay the due amount to the appellant-company. As a result, the appeal was accepted, the petition was allowed, and the respondent was ordered to pay the outstanding sum along with the costs of the petition.