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TMI Blog1991 (3) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Nos. 4 and 6 died. Respondents Nos. 1, 2, 5 and 7 to 10 appeared through their counsel. The third respondent was set ex parte on July 29, 1988. Counters were filed for respondents Nos. 1, 2, 5 and 7 to 10. In the counter dated Feburary 15, 1988, filed by the second respondent, the contention raised is that the present application is barred by limitation as it is beyond the time prescribed in sub-section (2) of section 543 of the Act. It is stated that as the winding-up order was passed on August 28, 1981, and the official liquidator was appointed on the same day for the company in liquidation and the acts of misfeasance or breach of trust, if any, on the part of the respondents were prior to August 28, 1981, the present application is barred by time as it was filed after five years. Respondents Nos. 1, 5 and 8 to 10 filed separate counter-affidavits dated April 28,1988, adopting the second respondent's counter-affidavit and contending that the present application is barred by time. The seventh respondent filed a separate counter-affidavit dated June 16, 1988, wherein he also contends that the present application is barred by time. In his order dated April 29, 1988, B.P. Jeev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to agree with the contention of Shri N. Seshachary that only one year from the date of the winding-up order has to be excluded for an application under section 543(2) read with section 458A. The provisions of section 458A are clear and both the periods, i.e , the period from the commencement of the winding up of the company to the date of the order of winding up and also the period of one year from the date of the order of winding up have to be excluded in computing the period of limitation. Sri N. Seshachary sought to contend that section 458A does not apply to the instant application as it is filed under Order VI, rule 17, Civil Procedure Code. But this argument is devoid of any force. The substantive relief claimed in the application by way of an amendment falls under section 543(1). Therefore, the provisions of section 543(2) and section 458A are attracted to this application and as such the application is in time". This case squarely supports the contention of the official liquidator that section 458A is attracted to an application under sub-section (2) of section 543 of the Act and, in that event, the present application is in time. Sri G.V.R.S. Varaprasad, appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 543 of the Act and a question arose in that case as to whether that application by way of misfeasance summons was by and on behalf of the company. While holding that the said application was by and on behalf of the company, Mridul J., of the Bombay High Court, observed as follows (at pages 106 to 108) : "A misfeasance proceeding is merely a proceeding of a summary character by which the court in the course of winding up a company assesses and compels the delinquent directors and officers to make payment in respect of the acts of misfeasance or malfeasance, breach of trust or wrongful retention or other misconduct. It was, therefore, held in Kumarapuram v. Pestonjee [1903] 5 Bom LR 633 that the misfeasance proceeding is merely a summary way of enforcing against directors or other officers a liability for breach of trust or other misconduct which previously might have been enforced by action. It is undoubtedly true that some judgments show and, in my opinion, correctly, that section 543 takes within its sweep not only enforcement of such rights which could have been enforced by a company but also such new rights as might have been created in favour of the official liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause ( b )) or to sell the immovable and movable property and actionable claims of the company either by public auction or by private contract (clause ( c )). It authorises the official liquidator to raise on the security of the assets of the company moneys that may be required for the purpose of the beneficial winding up (clause ( d )). It also authorises the official liquidator to do all such other things as may be necessary for winding up the affairs of the company (clause ( e )). The reference to the company in clauses ( a ) to ( e ) of sub-section (1) of section 457 leaves no manner of doubt that the powers that are to be exercised by the official liquidator are the powers which are exercised by him for and on behalf of the company or for the benefit of winding up of the company or for the purposes of realising the assets or effects of the company. Thus, the official liquidator acts for the company. He is also required to act in the name of the company. Section 458 merely provides for the discretionary powers of the court. It does not detract from the basic position that the conferment of the powers upon the official liquidator by section 457 is for the benefit of the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries excepting as such official liquidator and excepting on behalf of the company". In that case, it was not disputed that the claim in the name of the liquidator was a claim in the name of the company and the court observed as regards debt owed to the company that "the official liquidator alone can enforce its recovery representing the owner-company on its going into liquidation". In Official Liquidator, Supreme Bank Ltd. v. P.A. Tendolkar [1973] 43 Comp Cas 382 (SC), the Supreme Court was dealing with section 45-0 of the Banking Companies Act, 1949. Sub-section (2) of section 45-0 is as follows : "(2) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908), of section 235 of the Indian Companies Act, 1913 (VII of 1913), or in any other law for the time being in force .... and in respect of all other claims by the banking company against its directors, the period of limitation shall be twelve years from the date of the accrual of such claims". In that case, the official liquidator initiated the misfeasance proceedings against the directors and officers of the bank under liquidation. An objection was raised that the said section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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