Important Point
Section 458A of the Companies Act, dealing with computation of the period of limitation, has to be read with Section 543(2) of that Act.

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 1.12.89 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 2.12.83 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 1.12.89. Therefore, contention has been raised by the appellant that the said proceedings filed on 1.12.89 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, submitted at the outset that since limitation is specifically provided for of five years under Section 543(2) of the said Act, it was not open to the O.L. to rely upon and take resort to general limitation provision contemplated by Section 458A of the said Act. He further contended that the non-obstante clause in Section 458A refers to laws other than the Companies Act and consequently Sections 543(1) and (2) constituted a separate Code by itself and, therefore, the said section was not required to be read with Section 458A. Alternatively, he contended that even if one is to read harmoniously Section 458A with Section 543(2), the former is enacted to override the provisions of the Limitation Act, 1963 (for short, “Limitation Act”) and not the provision of the Companies Act, 1956. In this connection, learned counsel submitted that since Section 543(2) of the Companies Act specifically provides for limitation of five years, it is not open to read the said section with Section 458A of the Companies Act so as to extend the period of limitation from five years to six years by adding one more year to the specific period of limitation of five years prescribed by Section 543(2). According to learned counsel Section 543 is a stand-alone provision as it contemplates a right to recover, a forum locus and computation of the period of and, therefore, the said section need not be read with Section 458A and even if it is to be read harmoniously learned counsel submitted that the two sections operate in different spheres, inasmuch as for all non-misfeasance proceedings Section 458A would apply whereas for misfeasance proceedings Section 543(2) alone would apply and if this dichotomy is kept in mind then the period of limitation under Section 543(2) will remain as five years which period cannot be extended by invoking Section 458A of the said Act. In Section 543 there is a reference to other proceedings but in this case we are concerned with the question of limitation and its computation qua only the misfeasance proceedings.

6.Learned senior counsel, next contended that Section 458A, in any event, is not applicable as misfeasance proceedings instituted by the O.L. cannot be said to be proceeding instituted in the name and on behalf of the company. In this connection, learned counsel submitted that the intention of the Parliament in enacting Section 458A is to keep out 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 th