JUDGMENT

Braund, J. - We are to decide an important preliminary issue bearing on a misfeasance application u/s 235, Companies Act, 1913, in the matter of the Benares Bank Ltd., in liquidation. For this purpose it is enough to say that the Official Liquidators have launched misfeasance proceedings under the section against a number of directors and officers, and former directors and officers, of the bank in respect of transactions which took place some years before the liquidation began, and it is material to the disposal of a number of these charges to enquire what period of limitation applies. The winding up petition was filed on 3rd August 1939. A provisional liquidator was appointed on 14th February 1940, and the compulsory winding up order, under which the Official Liquidators were appointed, was made on 1st March 1940. This misfeasance application was filed on 12th February 1943. It was, therefore, within three years from the date of the appointment of both the Provisional Liquidator and the Official Liquidators. Section 235(1), Companies Act, 1913, (as now amended) is the section under which the Official Liquidators moved. It runs:

235. (1) Where, in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present director, manager or liquidator, or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of the liquidator, or of any creditor or contributory made within three years from the date of the first appointment of a liquidator in the winding up or of the misapplication, retainer, misfeasance or breach of trust, as the case may he, whichever is longer, examine into the conduct of the promoter, director, manager, liquidator or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the-misapplication, retainer, misfeasance or breach of trust as the Court thinks just.

The words in italics are those which were introduced by the amending Act of 1986. Having brought these proceedings, therefore, within three years from the date of the appointment of the Provisional Liquidator, they were clearly within the actual terms of the section as amended. It is said, however, that this is not enough. It is suggested that not only must the misfeasance proceedings themselves be launched within the period, prescribed by Section 235(1), but the act of misfeasance on which the claim is based must in this case at any rate, be such that a claim, on it was not already barred, at the date of the commencement of the proceedings, or alternatively at the date when the amendment took effect, by the ordinary law of limitation applicable to it. To explain this, it is necessary to set out some of the history of Section 235(1) of the Act as it now stands. Section 235, Companies Act, 1913, as it originally stood in the Act, was differently designed. Sub-section (1) of the original section, following the English Act, contained no express provision as to the time within which an Official Liquidator, a creditor or a contributory was to, or might, move under the section; but the section, unlike the English Act, contained an express sub-section - Sub-section (3) - which said that:

(3) The Indian Limitation Act, 1908, shall apply to an application under this section as if such application were a suit.

2. In 1936 the Act as a whole was substantially amended; and, among other amendments, Section 235(1) was enlarged by introducing into it a time limit of three years within which the Official Liquidators, a creditor or a contributory should, or might, launch misfeasance proceedings, while Sub-section (3), as i