Section 458-A of the Companies Act does not provide for a fresh period of limitation for filing a suit or application on behalf of a company in liquidation.

Headnote:
COMPANIES ACT, 1956 - SECTION 458-A - LIMITATION - CALCULATION OF TIME FOR FILING SUIT OR APPLICATION ON BEHALF OF COMPANY IN LIQUIDATION - SECTION 458-A PROVIDES FOR EXCLUSION OF CERTAIN TIME IN COMPUTING PERIOD OF LIMITATION - IT DOES NOT PROVIDE FOR A FRESH PERIOD OF LIMITATION - CAUSE OF ACTION ACCRUED IN FAVOUR OF COMPANY ENURES FOR BENEFIT OF OFFICIAL LIQUIDATOR - LIMITATION STARTED UNDER LIMITATION ACT WOULD CONTINUE SUBJECT TO EXCLUSION OF PERIOD MENTIONED UNDER SECTION 458-A.
Fact of the Case:

A promissory note was executed on 16th January, 1976. On 7th July, 1978 a petition for winding up of the Company was filed. On 19th January, 1979 winding up order of the Company was passed. On 14th June, 1983 Company Application No. 657 of 1983 was filed by the Official Liquidator praying that the respondents be ordered and decreed to pay to the Applicant a sum of Rs. 11, 995.02 with further interest.
Finding of the Court:

The court held that section 458-A of the Companies Act does not provide for a fresh period of limitation. The cause of action accrued in favour of the Company enures for the benefit of the Official Liquidator. Limitation started under the Limitation Act would continue subject to the exclusion of the period mentioned under section 458-A.
Issues: Whether section 458-A of the Companies Act provides for a fresh period of limitation for filing a suit or application on behalf of a company in liquidation.
Ratio Decidendi: The court interpreted section 458-A of the Companies Act and held that it provides for exclusion of certain time in computing the period of limitation for filing any suit or application in the name and on behalf of the Company. It specifically mentions "..... in computing the period of limitation prescribed for any suit or application .... ". The Limitation Act, 1963 prescribes the period of limitation for filing of suits or applications and further provides under several of its sections the period which can be excluded while computing period of limitation. In our opinion, section 458-A of the Companies Act provides for a further exclusion of period and it contains a non-obstante clause. Thus from the language of the said provision it is obvious that it does not provide for a period of limitation or even for that matter, a fresh period of limitation. But provides for exclusion of time from the date of filing of the winding up petition to the date of the winding up order and further, a period of one year thereafter.
Final Decision: The appeal was allowed and the judgment and order dated 15th February, 1990 in Company Application No. 657 of 1983 was set aside. Company Application No. 1248 of 1983 was dismissed as the claim appeared to be time-barred.

JUDGMENT - N.D. VYAS, J. :---Appeal No. 64 of 1991 is filed impugning the judgment of the learned Single Judge dated 15th Feburary, 1990 making the Judges Summons absolute. As far as Company Application No. 1248 of 1983 is concerned, the same has been referred to the Division Bench in view of the decision impugned in Appeal No. 64 of 1990.

2. A question which requires to be considered in both these matters being common, both the matters are being disposed of by a common judgment. The short question that requires consideration in the present appeal is as to how time for filing a suit or an application for recovery of a claim on behalf of a Company which is ordered to be wound up is to be calculated in view of the provisions of section 458-A of the Companies Act, 1956.

3. As far as the facts of both the matters are concerned, there is hardly any dispute. It would suffice to mention brief facts of the appeal which are as follows :

A promissory note was executed on 16th January, 1976. On 7th July, 1978 a petition for winding up of the Company, being Petition No. 497 of 1978, was filed. On 19th January, 1979 winding up order of the Company was passed. On 14th June, 1983 Company Application No. 657 of 1983 was filed by the Official Liquidator praying that the respondents be ordered and decreed to pay to the Applicant a sum of Rs. 11, 995.02 with further interest in which the judgment appealed from was delivered.

4. Before the learned Single Judge, it was the contention of the appellants that the claim was time barred. The learned Single Judge, following the decision of this Court in the matter of (Ch. S. Rao v. Prabhudas S. Budhwani)1, reported in 80 Bom. L.R. at page 685, rejected the said contention and made the Judges Summons absolute. Hence the present appeal by the original respondents Nos. 1 to 3. As far as section 458-A is concerned, it provides for exclusion of certain time in computing the period of limitation. It provides that notwithstanding anything in the Indian Limitation Act, 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 date on which the winding up order is made and a period of one year immediately following the date of the winding up order shall be excluded. The learned Single Judge has followed the decision of this Court in the case of Ch.S. Rao v. Prabhudas S. Budhwani, reported in 80 Bom.L.R. 695. It was inter alia held in the case of Ch.S. Rao, (supra) that as far an Official Liquidator was concerned, he got a right under section 446(2)(d) of the Companies Act to recover the claim by the Company for the first time when the winding up order is made, and that any application made by him for this purpose was governed by Article 137 of the Limitation Act, 1963 under which the period of limitation is three years for applications not otherwise provided for from the date when the right to sue accrues. The learned Single Judge in the case of Ch. S. Rao v. Prabhudas S. Budhwani, relied on a Full Bench decision of the Delhi High Court in (Faridabad Cold Storage v. The Ammonia Supplies)2, reported in A.I.R. 1978 Delhi 158. As against these decisions, a Division Bench of the Madras High Court has in the case of (Official Liquidator, Radel Services P. Ltd. v. Southern Screws P. Ltd.)3, reported in 63(1988) Company Cases at page 749 inter alia held that section 446 of the Companies Act, 1956, does not prohibit or oust the Civil Courts jurisdiction for commencement of a suit or legal proceeding against a company in liquidation nor continuance of pending suits or legal proceedings, but only provides that leave of the Company Court will have to be obtained for commencement or proceeding further with pending matters and that at the same time sub-section (3) of section 466 confers concurrent j

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