A claim against a company in liquidation not barred at the date of the winding-up order can be entertained and admitted by the Liquidator and the Court even after the settlement of the list of creditors.

P. B. MUKHARJI, J.

( 1 ) THIS is an application on a chamber summons taken out by Lloyds Bank Ltd. , against the Liquidator, Chandbali Steamer Service Co. Ltd. , (in Liquidation) for an order upon the Official Liquidator of the company to admit the claim of the petitioner as an ordinary creditor for the sum of Rs. 36,954. 91 np, and for necessary amendment of the list of creditors already settled by this court.

( 2 ) AN interesting point of limitation of considerable importance is raised by the Liquidator on this application. It is contended by the Official Liquidator that the claim of the Lloyds Bank is already barred by limitation. If Lloyds Bank Ltd. , were to institute a suit to enforce this claim today it will undoubtedly be barred by limitation. In such circumstances, the question is can the court direct the Liquidator to admit the claim. No Indian case has answered the point.

( 3 ) THE claim of the applicant Bank arises out of the moneys lent and advanced to the company on overdraft account which continued till October-November, 1954. The company went into liquidation in March, 1955. The applicant Lloyds Bank did not put forward its claim before the Liquidator at any stage until 5-11-1958, which was about four years subsequent to the last transaction in the overdraft account and about more than three years after the date of liquidation.

( 4 ) THE reason which the Lloyds Bank puts forward for this delay is that it was trying to realise this claim from the bills which it was holding as security for this sum. These were the bills supposed to nave been payable by the Government to the company now in liquidation. The Government has claimed a set off for its own claims against the company in liquidation. In fact it has filed a suit against the company now pending against the Liquidator. The Lloyds Bank has failed to realise these Bills from the Government and therefore now wants to come in the winding up.

( 5 ) THE list of creditors was settled by this court in September 1958. The Lloyds Bank there-after filed its claim before the Liquidator on 8-11-1958. The Liquidator rejected the claim on the 15th November 1958 on the ground of limitation. The Bank therefore now applies to the court for an order upon the Liquidator to admit its claim.

( 6 ) IT is contended on behalf of the Liquidator that under the explanation of Section 3 of the Limitation Act this claim is barred and should not be allowed. Section 3 of the Limitation Act reads as follows:"subject to the provisions contained in Sections 4 to 25 (inclusive), every suit instituted, appeal preferred, and application made, after the period of limitation prescribed therefor by the first schedule shall be dismissed, although limitation has not been set up as a defence. Explanation.--A suit is instituted, in ordinary cases, when the plaint is presented to the proper officer; in the case of a pauper, when his application for leave to sue as a pauper is made; and, in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the Official Liquidator. "it is therefore being contended by the Liquidator that the limitation really is accelerated by the provisions contained in the statutory explanation of Section 3 of the Limitation Act because the limitation starts running from the time when the claimant first sends his claim to the Official Liquidator. But I do not see how it accelerates the limitation because the Statute says the starting point is when the claimant first sends his claim to the Liquidator. In tin's case the Bank did not send its claim before 8-11-1958. Therefore the statutory Explanation cannot provide the bar of Limitation to the Bank's claim in this case.

( 7 ) IT appears to me that this statutory explanation of Section 3 of the Limitation Act does not at all apply to this application for many reasons.

( 8 ) IN the first place, the proceeding before me is not a suit. The second reason is that it

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