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TMI Blog1997 (9) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ts due to the company from them. On December 9, 1982, both the said suits were dismissed for default by the trial court. Thereafter, the respective applications under Order 9, rules 4 and 5 read with section 151 of the Civil Procedure Code, 1908, were made by the company before the court below in Misc. Cases Nos. 433 of 1988 and 435 of 1988, along with I.A. No. 1 under section 5 of the Limitation Act, praying to restore the said suits in S.C. Nos. 3341 of 1981, and 3342 of 1981, to its file by condoning the delay caused in making of the said applications and permit the company to prosecute further proceedings in the suits. In Ex. Case No. 51 of 1991, the company had filed the execution petition on June 26, 1991, in the court below seeking execution of money decree dated August 21, 1972, against the judgment-debtor passed in S.C. No. 74 of 1972, for recovery of a sum of Rs. 745.70 claiming benefit of section 458A of the Companies Act saving the period of limitation. In both the aforementioned cases in Misc. Cases Nos. 435 and 433 of 1988, the reason for the delay in making the said applications is sworn to in the affidavit of the company's official filed in support of respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that the company was not entitled to exclusion of the time stipulated in section 458A of the Act as the same could be claimed only when an effective winding up order is passed against it by the company court, since there being no such order as yet against the company in the winding up proceeding commenced against it in the said Company Petitions Nos. 8, 9 and 49 of 1981. Therefore, he has passed the impugned orders rejecting the company's applications filed under Order 9, rules 4 and 5 of the Civil Procedure Code, in Misc. Cases Nos. 433 and 435 of 1988, and in Ex. Case No. 51 of 1991, as time-barred. Mr. Humayun, learned counsel appearing for the company, attacking the legality of the orders under revision submitted that in view of section 458A of the Act, the law of limitation became inapplicable to the proceedings in the said S.C. Nos. 3341 and 3342 of 1991, and Ex. Case No. 51 of 1991, on and with effect from the date of commencement of the winding up proceeding against the company initiated by the said Company Petitions Nos. 8, 9 and 49 of 1981. His argument was that by virtue of section 458A of the Act the period of limitation under the Limitation Act stopped flowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 433 and 435 of 1988, as also in Ex. Case No. 51 of 1991, on the basis of the commencement of the winding up proceedings against it by the said Company Petitions Nos. 8, 9 and 49 of 1981; and, if so, whether the operation of the Limitation Act in relation to these proceedings has remained suspended and inapplicable in the face of the existing order dated October 8, 1982 (See Sudarsan Chits India Ltd. v. Sukumaran Pillai [1985] 57 Comp Cas 85 (Ker)), of the High Court of Kerala passed in the said M.F.A. Nos. 518, 519 and 520 of 1981 holding the company court's said winding up order dated October 13, 1981, in abeyance? The decision on the above question depends upon the interpretation and legal effect of section 458A of the Companies Act which reads: "458A. Exclusion of certain time in computing periods of limitation.- -Notwithstanding anything in the Indian Limitation Act, 1908 (9 of 1908), or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application in the name and on behalf of a company which is being wound up by the court, the period from the date of commencement of the winding up of the company to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both dated December 9, 1982. The period of limitation prescribed under article 122 of the Schedule to the Limitation Act to make such applications is 30 days from the date of order, which period stood expired in the normal course on January 8, 1983. The execution application in Ex. Case No. 51 of 1991 was filed on June 26, 1991, seeking execution of the decree passed on August 21, 1972. The limitation period of 12 years to seek execution of a decree prescribed by article 136 of the Schedule to the Limitation Act expired on August 21, 1984. The said suits and the said applications were filed in the name and on behalf of the petitioner-company. When the said orders dated December 9, 1982, were made by the court below in the said S.C. Nos. 3341 and 3342 of 1981, and when the said execution application was made on June 26, 1991, by the company, the winding up proceeding against it had already been commenced on and with effect from January 16, 1981, by the creditors with their respective applications made on January 16, 1981, April 13, 1981, and on a subsequent date, and on those petitions, a winding up order dated October 13, 1981, was also passed by the company court but the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2) of section 446. The claims of the company in all its said proceedings are not under section 446 of the Act. Therefore, that authority of the Kerala High Court is without relevance. Support was sought to be drawn by him from the following observations of the Delhi High Court in Diwan Chand Kapoor v. New Rialto Cinema (P.) Ltd, [1986] 60 Comp Cas 276 , 279 that: "Section 458A of the Companies Act provides for exclusion of certain time in computing periods of limitation where a winding-up order has been made, but the benefit of the section is confined to proceedings 'in the name and on behalf of a company which is being wound up by the court'. It is not available against the company which is being wound up." He, therefore, maintained that as held by the court below, section 458A comes into play only when and after an effective winding up order against the company is passed by the court and not from the time of its commencement, without any legal force ( sic ) . The above said observation of the Delhi High Court made in the context of the facts and circumstances in the case of Diwan Chand Kapoor v. New Rialto Cinema (P.) Ltd. [1986] 60 Comp Cas 276 (Delhi) does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable for all such claims of the company till the expiry of the period of one year immediately after the said winding up order dated October 13, 1981, in abeyance becomes effective. Hence, the said applications made by the company before the court below on September 13, 1988, in Misc. Case No. 433 of 1988, on September 16, 1988, in Misc. Case No. 435 of 1988, the cause of action for which applications had arisen on December 9, 1982; and the said execution application in Ex. Case No. 51 of 1991, filed on June 16, 1991, for execution of the decree dated August 21, 1972, the execution whereof was not barred by time as on January 16, 1981, were all maintainable before it in law, since they were all made during this suspended period of limitation. As such, there was no question of delay involved in the making of these applications by the company and it was not required in law to explain any delay as such. The company was entitled to initiate or prosecute any legal action in respect of its any claim which was not barred by time under any provision of the Limitation Act before the date of commencement of its winding up proceeding, i.e., January 16, 1981, till the said cut-off date of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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