This is a petition by the liquidator under section 235 of the Act. The first respondent was the Managing Director of the Company and the 2nd to 10th respondents were Directors. The 11th respondent was the Company’s auditor and the 12th respondent its head clerk. The first respondent is not appearing in these proceedings. He was adjudicated insolvent and the 13th respondent, who was the Official Receiver of his estate, was joined, but I am told that the insolvency has been annulled and accordingly the 13th respondent has no further interest in the matter.

The liquidator claims that large amounts are recoverable from the respondents for misfeasances consisting for the most part in their having granted loans contrary to the bye-laws of the Company. It is alleged that these loans, which are now I understand, irrecoverable, were granted at the absolute discretion of the first respondent without any previous sanction by the Board and, accordingly that the first respondent is primarily liable for these losses. It is claimed by the liquidator that the other Directors, the auditor and the head clerk, i.e., the respondents now before me, were aware of these loans and were negligent in the performance of their duties in that they did not take steps to prevent them, or to recover the amounts so lent. In these circumstances, the case for the liquidator is that they are equally liable along with the first respondent. The winding up order was made on the 9th January, 1942, and it is common ground that the business of the Company was discontinued as from the 7th April, 1941.

Under the order of the Court there have been investigations into the conduct of the Managing Director and Directors of this Company and as it appeared that they had been guilty of offences relating to the Company, I directed the liquidator to refer the matter to the Registrar of Joint Stock Companies under section 237 of the Act. I understand that the first respondent is now being prosecuted by the police under the Indian Penal Code and that the question of taking action against him and the other Directors under the Indian Companies Act is still under consideration.

In these circumstances it is clearly impossible to proceed with the hearing of this petition on the merits. But as the respondents 2 to 12 inclusive contend that the relief now sought by the liquidator is barred by limitation, I have heard arguments on that point as a preliminary issue.

Under section 235(1) the Court may grant relief on an application by the liquidator “made within three years from the date of the first appointment of a liquidator in winding up or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer.” Now the first appointment of a liquidator in the winding up was on the 19th November, 1941, when provisional liquidators were appointed and this application was presented on 8th November 1944, and filed on the 14th November, 1944. Accordingly, the application is clearly within time; but it is urged on behalf of the respondents that this does not dispose of their contention. It is said that section 235 is a procedure section which gives no new rights, but merely provides a summary mode of enforcing existing rights (vide Narasimha Ayyangar v. Official Assignee of Madras1) and accordingly that any defence of limitation which would have been open to the respondents if a suit had been filed by the Company, or by the Official Liquidator in its name under section 179(a) of the Act is open to them in these proceedings. It is said that if a suit had been filed, the limitation applicable to these alleged misfeasances would have been that provided in Article 36 of the First Schedule to the Limitation Act and that in as much as the business was admittedly discontinued in 1941 the reliefs asked would accordingly have been barred. It is urged that as a suit would have been barred, the present proceedings must be barred also.

Apart from the words of limit