Legal representatives must file applications within stipulated limitations to continue proceedings under Section 235 of the Companies Act.

1. One of the creditors of the Company namely Mrs. Raja Kakarlapudi Sudsrsana Sundara Narasayamma submitted an application on 20/2/954 under S.235 of the Indian Companies Act, 1913 , alleging certain acts of misfeasance, breach of trust and misapplication of the funds of the company by its Directors during the period of their management. This creditor after the submission of the application died on 21/9/1957. On 15/1/1962 her four daughters filed an application for their being brought on record as her legal representatives and sought permission to continue the proceedings.

2. The application was opposed by the Directors on the ground that the proceeding started on the petition of the creditor aforesaid had abated and since the period for setting aside the abatement had expired and no sufficient cause is made out for the delay, the application for their being brought on record was untenable.

3. On behalf of the legal representatives, Mr. Waghmare contended that the provisions of Limitation Act are inapplicable to the proceedings under S.235 of the Act. The learned counsel referred to the change introduced in S.235 by the Companies (Amendment) Act of 1936 whereby Sub-section (3) of S.235 as it stood prior to the passing of the aforesaid Amendment Act had been repealed. It was argued that since the provision as to the applicability of the Indian Limitation Act, 1908 to an application under S.235 of the Companies Act is repealed, we cannot apply even Art.176.

4. S.235 (3) of the Indian Companies Act, 1913 as it stood prior to amendment is as follows -
"The Indian Limitation Act, 1908 , shall apply to an application under this section as if such application were a suit".

5. This provision is intended to prove for a period of limitation in respect of the proceeding started on an application of the liquidator or of any creditor or contributory of the company. It lays down that for an action against a delinquent director etc. under S.235 the same period of limitation was applicable as is applicable had the application been a Civil Suit on the same cause of action before a Court having jurisdiction. The repeal of this provision and amendment introduced in Sub-section (1) of S.235 by the Amending Act of 193S by providing a special period of limitation different from that for a suit affected the initiation of the proceeding by means of an application under S.235. It provides that an application under that section ought to be filed within three years from the date of the first appointment of a liquidator in the winding up or the mis - application, retainer, misfeasance or breach of trust, as the case may be whichever is longer. The repeal of sub-sec. (3) does not in terms mean that the whole of the Limitation Act becomes inapplicable to the entire proceedings under S.235 whether they be for the specific purpose mentioned in the section or for any incidental and procedural matter. It cannot be doubted that the proceedings under S.235 are judicial in nature and pertain to the Civil liability of the delinquent directors etc.

6. In re, Reference under Act 7 of 1870, S.28, ILR (17) All. 238, Burkitt J., no doubt had expressed an opinion that the proceedings under S.235 of the Companies Act 'are not in the strict and technical sense judicial proceedings at all' but this opinion of Burkitt J., was criticised by Monroe J. in Mulk Raj v. Official Liquidator, Peoples Bank of Northern India Ltd., Lahore , AIR 1938 Lah. 658 at p. 662.
The learned Judge referred to the Rules made by the Supreme Court in England in connection with these proceedings and those of the Lahore High Court on the same topic and held that these proceedings are judicial in na