The period of limitation under Sec. 543 (2) of the Companies Act cannot be extended, and the general provision of exclusion under Sec. 458-A does not apply to extend the limitation period.

( 1 ) THIS is a misfeasance proceeding against the Directors of any limited company that is in liquidation.

( 2 ) ). The case involves an interesting issues concerning the interpretation of two of the Sections of the Companies Act, viz. , Sec. 458-A and Sec. 543 (2), both of which revolve around the question as to what precisely is the period of limitation within which the Official Liquidator is permitted to institute proceedings before a judicial forum in such cases.

( 3 ) THERE is no dispute about the fact that the windingup petition was presented before the High Court on 26-5-1987 and that a windingup order came to be passed on 7-4-1988. Simultaneously the Official Liquidator was appointed as Liquidator of the Company on the same day. The present application under Sec. 543 (2) has been filed before the High Court on 19-9-1994. The application is contested and, on behalf of some of the Directors a preliminary objection has been canvassed viz. , that the application has been presented beyond the period prescribed by law and that consequently, it would have to be dismissed on the ground of limitation. For this purpose, the respondents have pointed out to the Court that there is no ambiguity with regard to the time limit prescribed under Sec. 543 (2) of the Act which is five years from the date on which the Company was woundup, the Official Liquidator was appointed as Liquidator or the dates on which the acts complained of have been committed, whichever is later. The section very clearly mandates that there is an outer limit of five years provided to the Official Liquidator for institution of these proceedings and the section uses the word 'shall' which leaves no doubt about the fact that this period of time cannot be extended. To my mind, there is a very valid reason why the Legislature has prescribed the ceiling, insofar as five years is a sufficiently long period of time within which the Official Liquidator can have the affairs of the Company examined threadbare and institute proceedings against the guilty persons. The Legislature was also conscious of the fact that if hopelessly belated action is instituted, that it always turns out to be an infructuous exercise because either the parties are dead or not traceable; more importantly because of the practical difficulty of establishing the charges at that late point of time when either the witnesses are not available or documents are not traceable and the like.

( 4 ) THE respondents contend that if five years are added to the date of windingup which is 7-4-88, that the cut-off date would be 7-4-93 and that the petition filed on 19-9-94 is hopelessly time-barred and must fail on this ground alone.

( 5 ) ON behalf of the O. L. , an entirely different argument has been presented. It is contended that there is a general provision in the Companies Act viz. , Sec. 458-A which prescribes that the whole of the period consumed in the windingup of proceedings, plus a period of one year shall be excluded while computing limitation. According to the learned Counsel who represents the O. L. Sec. 458-A is a general provision applicable to all applications emanating from the O. L. including petitions of the present type, and his submission is that while computing the period of limitation the aforesaid two periods which aggregate one year ten months will have to be excluded. He proceeds to contend that this period is dehors the five years provided under S. 543 (2 ). If the Official Liquidator is given the benefit of the period of one year ten months by reading two sections in conjunction, then the present application would be within time and would still be maintainable.

( 6 ) IN response to the further submission, the respondent's learned Counsel have relied on a Full Bench decision of this Court reported in 1993 (78) Com Cas Pg. 96, Karnataka Steel and Wire Products Ltd. v. Kohinoor Rolling Shutters and Engineering Works (P) Ltd. , wherein the High Court had occasion to lay