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TMI Blog2008 (7) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Jain for the Respondent. JUDGMENT S.H. Kapadia, J. - Leave granted. 2. A short question which arises for determination in this civil appeal is : whether misfeasance proceedings filed by the Official Liquidator on 1-12-1989 under section 543(1) of the Companies Act stood barred by limitation provided for in section 543(2) of the said Act. 3. The facts of this case lie in a very narrow compass. 4. On 2-12-1983 order of winding up was passed by the High Court. Official Liquidator ( O.L. , for short) was appointed on that day. The period of five years referred to in section 543(2) of the Companies Act, 1956 ( Companies Act , for short) expired on 1-12-1988. As stated above, misfeasance proceedings were filed by the O.L. on 1-12-1989. Therefore, contention has been raised by the appellant that the said proceedings filed on 1-12-1989 stood filed beyond limitation as prescribed under section 543(2) of the said Act. Under the said section the period is five years from the date of the order for winding up or of the first appointment of the Liquidator in the winding up. 5. Mr. Shyam Divan, learned senior counsel appearing on behalf of the appellant, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 543(2) from its ambit. That, the non obstante clause in section 458A refers to a potential conflict between the provisions of the Companies Act and the Limitation Act or to a potential conflict between Companies Act and any other law for the time being in force. In this connection, learned counsel invited our attention to section 408(4) of the Companies Act in support of his contention that the words notwithstanding anything contained in the Companies Act which find place in the said sub-section do not find place in section 458A which indicates the intention of the Parliament to treat section 543(2) as a stand-alone provision applicable to only misfeasance proceedings whereas section 458A in the matter of computation of limitation would apply to all other non-misfeasance proceedings. Therefore, according to learned counsel, the Parliament did not intend to override vide section 458A any other provisions of the Companies Act. On the contrary, according to learned counsel, the Parliament vide section 458A intended to override potential conflict between the Companies Act and the Limitation Act on one hand and any other law for the time being in force. 7. Mr. Pune ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst delinquent directors, etc. -(1) If in the course of winding up a company, it appears that any person who has taken part in the promotion or formation of the company, or any past or present director, managing agent, secretaries and treasurers, manager, liquidator or officer of the company- ( a )has misapplied, or retained, or become liable or accountable, for, any money or property of the company; or ( b )has been guilty of any misfeasance or breach of trust in relation to the company; the Court may, on the application of the Official Liquidator, of the liquidator, or of any creditor or contributory, made within the time specified in that behalf in sub-section (2), examine into the conduct of the person, director, managing agent, secretaries and treasurers, manager, liquidator or officer aforesaid, and compel him to repair or restore the money or property or any part thereof respectively, with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust, as the Court thinks just. (2) An application under sub-section (1) shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act deals with limitation of suits, appeals and applications whereas Part III deals with the computation of period of limitation. Similarly, in our view section 543(2) deals with limitation for applications/claims mentioned in section 543(1) which includes misfeasance proceedings whereas the computation of the period of five years is contemplated by section 458A of the Companies Act. 12. In our view, there is no merit in the contention advanced on behalf of the appellant that by virtue of section 458A the period of limitation is extended by one year. Part III of the Limitation Act excludes certain circumstances mentioned in sections 12 to 24 for computation of the period of limitation. Similarly, section 458A provides for an additional circumstance which is not there in the Limitation Act which is required to be taken into account as an item of exclusion in the matter of computation of the period of Limitation of five years prescribed by section 543(2). That circumstance is a period spent between the date of commencement of winding up of the company and the date on which the winding up order is passed plus one year therefrom. If this period of limitation is to stand exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of winding up and one year immediately following such date of order of winding up. We are in agreement with the view expressed by the Madras High Court in the said judgment. 15. One of the contentions advanced on behalf of the appellant is that section 458A is not applicable to misfeasance proceedings instituted by the O.L. as such proceedings are not in the name and on behalf of a company which is being wound up by the Court. In this connection, reliance is placed on section 458A which prescribes the mode of computation of the period of limitation for any suit or an application in the name and on behalf of a company which is being wound up by the Court. Therefore, it is sought to be argued that misfeasance proceedings instituted by the O.L. is neither a suit nor an application in the name and on behalf of a company which is being wound up by the Court. We find no merit in this argument. If book-debt is assigned by the company to a bank which fails to file a suit for recovery of money within the time prescribed under the Limitation Act, it would not be open to O.L. to institute the suit under section 458A because in that event the O.L. is said to have filed a suit no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. He has also to find resources for conducting the proceedings. The proceedings initiated by him by way of Judge s summons or suit for enforcement of the recoveries, cannot but be on behalf of the company having regard to his source of authority, viz., the provisions of the Companies Act and the statutory obligation in discharge of which he has to act in this behalf. The said Act does not contemplate his acting in the matter of recoveries excepting as O.L. and excepting on behalf of the company. 16. Before concluding, we may state that learned counsel for the appellant placed reliance on the judgment of the Orissa High Court in the case of B. Pattnaik Mines (P.) Ltd. v. Bijoyananda Pattnaik [l994] 80 Comp. Cas. 237 , in which it has been held that when the Liquidator or a creditor or a contributory makes an application under section 543 he does not do so as representing the company but in his own independent right. As against this judgment, learned counsel for the respondents (O.L.) cited before us the judgment of the Bombay High Court in the case of Gleitlargor (India) (P.) Ltd. v. Mazagaon Dock Ltd. [1985] 57 Comp. Cas. 742 , which has taken the view that the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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