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Karnataka Steel and Wire Products Ltd. (In Liquidation) Vs. Kohinoor Rolling Shutters and Engineering Works (P.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany;Arbitration
CourtKarnataka High Court
Decided On
Case NumberCompany Applications Nos. 133, 343, 425 and 466 of 1987
Judge
Reported in[1993]77CompCas179(Kar); [1993]78CompCas96a(Kar); ILR1993KAR293; 1993(1)KarLJ212
ActsCompanies Act, 1956 - Sections 391, 441, 442, 443, 444, 445, 446, 446(1), 446(2), 446(2B), 446(3), 447, 456, 457, 458A, 466(2) and 543; Banking Regulation Act, 1949 - Sections 45B and 45G; Limitation Act, 1963 - Schedule - Article 137
AppellantKarnataka Steel and Wire Products Ltd. (In Liquidation) ;premier Commercial Bankers (In Liquidation)
RespondentKohinoor Rolling Shutters and Engineering Works (P.) Ltd.;shivaram Durga Naik;
Appellant Advocate S.M. Chandrashekar, Adv.
Respondent Advocate V.G. Sabahit, Vigneshwar S. Shastry, ;Chaitanya Hegde and ;S. Mahesh, Advs.
Excerpt:
- karnataka land reforms act, 1961.[k.a. no. 10/1962]. section 48a: [h.v.g. ramesh, j] rejection of form no.7 vesting of land in the state under section 44 no notice to purchasers who had purchased the lands in the year 1967 and subsequently order of vesting of land passed by the land tribunal held, the purchasers who had purchased the land in the year 1967 and subsequent to that are entitled to be informed by the land tribunal about the order of rejection of form no. 7 and the order of vesting. hence, the matter requires reconsideration for want of due notice to the petitioners. -- karnataka land revenue act, 1964.[k.a. no. 12/1964]. sections 128 & 129: [h.v.g. ramesh, j] registering of mutations and register of disputed cases held, it is needles to say it is duty bound on the part.....k.a. swami, actg. c.j.1. this division bench consisting of n. venkatachala, j. (as he then was) and k. shivashankar bhat, j. has referred the following question for consideration by a full bench under section 7 of the karnataka high court act, 1961 : 'what is the correct period of limitation for claims to be made under section 446(2)(b) of the companies act having regard to the provision in section 458a of the companies act, 1956 ?' 2. hence, the matter is before us. 3. the reference is necessitated due to conflicting views expressed by several high courts. 4. we have heard both sides. 5. before we embark upon considering the question referred to us for opinion, it is necessary to notice sections 446 and 458a of the companies act, 1956 (hereinafter referred to as 'the act'), as the answer.....
Judgment:

K.A. Swami, Actg. C.J.

1. This Division Bench consisting of N. Venkatachala, J. (as he then was) and K. Shivashankar Bhat, J. has referred the following question for consideration by a Full Bench under section 7 of the Karnataka High Court Act, 1961 :

'What is the correct period of limitation for claims to be made under section 446(2)(b) of the Companies Act having regard to the provision in section 458A of the Companies Act, 1956 ?'

2. Hence, the matter is before us.

3. The reference is necessitated due to conflicting views expressed by several High Courts.

4. We have heard both sides.

5. Before we embark upon considering the question referred to us for opinion, it is necessary to notice sections 446 and 458A of the Companies Act, 1956 (hereinafter referred to as 'the Act'), as the answer to the question depends upon the interpretation to be placed on these sections.

6. Sections 446 and 458A of the Act read as follows :

'446. Suits stayed on winding up order. - (1) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceedings shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose.

(2) The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of -

(a) any suit or proceeding by or against the company;

(b) any claim made by or against the company (including claims by or against any of its branches in India);

(c) any application made under section 391 by or in respect of the company;

(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company;

whether such suit or proceedings has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960.

(3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court.

(4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.

458A. Exclusion of certain time in computing periods of limitation. -

Nothwithstanding anything in the Indian Limitation Act, 1908 (9 of 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 (both inclusive) and a period of one year immediately following the date of the winding up order shall be excluded.'

7. Section 458A of the Act was inserted by the Companies (Amendment) Act, 1960 (Act 65 of 1960). Similarly sub-section (2) of section 446 was also substituted by the same enactment. The purpose and object of substituting the old sub-section (2) by new sub-section (2) of section 446 of the Act has been specifically considered by the Supreme Court in Sudarshan Chits (I.) Ltd. v. G. Sukumaran Pillai, : [1985]1SCR511 . The same will be referred to at a later stage.

8. Section 458A only provides for exclusion of certain time in computing the periods of limitation. A reading of the section which is reproduced above, makes it clear that for the purpose of application, or attraction of section 458A of the Act, there are certain prerequisites which are to be satisfied. They are :

1. The period of limitation must have been prescribed by the Limitation Act or any other law for the time being in force;

2. Such prescription of the period of limitation must be in respect of any suit or application; and

3. Such suit or application is filed in the name and on behalf of a company which is being wound up by the court.

9. If these conditions are satisfied, - (a) the period from the date of commencement of the winding up of the company to the date on which winding up order is made (both inclusive), and (b) a period of one year immediately following the winding up order shall have to be excluded. Therefore, this section only provides for exclusion of the period from the date of commencement of the winding up proceeding of a company plus one year following the date of the winding up order.

10. In a case where a suit or application is not filed in the name and on behalf of the company or cannot in substance or in effect be construed or considered to have been filed for and on behalf of the company which is being wound up by the court, the provisions of this section are not attracted. Similarly, if on the date of commencement of the proceedings of winding up of the company, any claim of the company which can be made the subject of a suit or an application, was barred by the period of limitation prescribed either by the Limitation Act or any other law for the time being in force, the question of exclusion of 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 plus one year immediately following the date of the winding up order, does not arise. In other words, the provisions contained in section 458A of the Act, would be attracted if the claim of the company which is being wound up was subsisting or enforceable on the date the winding up proceeding was commenced, and not otherwise.

11. As noticed by the Supreme Court in Sudarshan Chits (I.) Ltd., : [1985]1SCR511 , the Indian Companies Act did not contain any provision similar or identical to that of section 446(2) of the Act. Section 171 of the Indian Companies Act, 1913, only provided for stay of suits and proceedings pending at the commencement of the winding up proceedings and the embargo against the commencement of any suit or other legal proceedings against the company except by the leave of the court. Of course, section 171 of the Indian Companies Act, 1913, with little modification is retained in section 446(1) of the Act. There was no specific provision conferring jurisdiction on the court winding up the company analogous to the one conferred by section 446(2) of the Act which was introduced to enlarge the jurisdiction of the court winding up the company facilitating the disposal of winding up proceedings. However, this provision also did not meet with the requirement. Therefore, the committee appointed for examining comprehensive amendments to the Companies Act in its report recommended that 'a suit by or against the company in winding up should, notwithstanding any provision in law for the time being in force, be instituted in the court in which the winding up proceedings are pending.' It was to give effect to these recommendations, that sub-section (2) came to be suitably amended and it was substituted by the Companies (Amendment) Act, 65 of 1960. The committee also noticed that on a winding up order being made and the official liquidator being appointed liquidator of the company, he has to take into is custody company property as required by section 456 of the Act. It was also noticed in the aforesaid decision that section 457 of the Act conferred power on the official liquidator to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name and on behalf of the company and to sell properties - both movable and immovable - of the company and to realise the assets of the company. This was to be done for the purpose of distributing the assets of the company amongst the claimants. The Supreme Court further held as follows (at page 637) :

'Now at a stage when a winding up order is made, the company may as well have subsisting claims and to realise these claims the liquidator will have to file suits. To avoid this eventuality and to keep all incidental proceedings in winding up before the court which is winding up the company, its jurisdiction was enlarged to entertain a petition amongst others for recovering the claims of the company. In the absence of a provision like section 446(2) under the repealed Indian Companies Act, 1913, the official liquidator in order to realize and recover the claims subsisting debts owned to the company had the unenviable fate of filing suits. These suits as is not unknown, dragged on through the trial court and courts of appeal resulting not only in multiplicity of proceedings but in holding up the progress of the winding up proceedings. To save the company which is ordered to be wound up from this prolix and expensive litigation and to accelerate the disposal of winding up proceedings, Parliament devised a cheap and summary remedy by conferring jurisdiction on the court winding up the company to entertain petitions in respect of claims for and against the company. This was the object behind enacting section 446(2) and, therefore, it must receive such construction at the hands of the court as would advance the object and at any rate not thwart it.'

12. Further on, dealing with section 446(2) of the Act, the Supreme Court has observed thus (at page 638) :

'It specifies the contours of the jurisdiction of the court which is winding up the company. It confers special jurisdiction on the court which is winding up the company to do things that are set out in the various sub-clauses notwithstanding anything contained in any other law for the time being in force. Section 446(2) thus conferred special jurisdiction on the court winding up the company which otherwise it may not have enjoyed.'

13. It has also been further observed by the Supreme Court that (at page 639) :

'Sub-section (2) of section 446 confers jurisdiction on the court which is winding up the company to entertain and dispose of proceedings set out in clauses (a) to (d). The expression 'court which is winding up the company' will comprehend the court before which a winding up petition is pending or which has made an order for winding up of the company and further winding up proceedings are continued under its directions. Undoubtedly, a look at the language of section 446(1) and (2) and its setting in Part VII which deals with winding up proceedings would clearly show that the jurisdiction of the court to entertain and dispose of proceedings set out in sub-clauses (a) to (d) of sub-section (2) can be invoked in the court which is winding up the company.'

14. Therefore, it is clear that a claim application or any other proceedings set out in clauses (a) to (d) which could be entertained under section 446(2) of the Act, must be subsisting on the date the winding up proceeding commenced or which became due during the pendency of the winding up proceedings. As such it is not possible to hold that sub-section (2) of section 446 of the Act covered the suit claim or other proceedings as set out therein which had become barred by time on the date the winding up proceeding commenced. No doubt, in the case of money claim, the debt does not get extinguished merely because the enforcement and recovery of the debt through the process known to law is barred by time. If the creditor comes across the money of the debtor without any stipulation as to the manner of appropriating the same, it would still be open to the creditor to appropriate it towards the debt which has become time-barred. But, such a situation does not arise when it is sought to be recovered through the process of the court which is winding up the company.

15. Sections 446 and 458A, both appear in Chapter II Part VII of the Act. Part VII relates to winding up. It is divided into five chapters. Chapter I deals with preliminary matters. Chapter II deals with winding up by the court. Chapter III deals with voluntary winding up. Chapter IV deals with winding up subject to supervision of court and Chapter V contains the provisions applicable to every mode of winding up. Section 446 occurs in the context of consequences of winding up order. Section 458A provides for exclusion of certain time in computing periods of limitation in the circumstances stated therein.

16. Sub-section (1) of section 446 of the Act does not oust the jurisdiction of a civil court. As per this sub-section, for the purpose of filing a suit or other legal proceedings against the company against which a winding up order is passed or the official liquidator has been appointed as provisional liquidator, the permission of the court which is winding up the company has to be obtained. It is open to such court to grant leave subject to such terms as it may deem fit to impose. Similarly, the suit or the other legal proceeding commenced against the company before the winding up order is passed, cannot also be proceeded with without the leave of such court. Thus, sub-section (1) of section 446 of the Act, imposes a condition on the right of a party for filing suit or other legal proceeding after the winding up order is passed or for continuing the suit or other legal proceeding pending on the date the winding up order is passed, to obtain the leave of the court which is winding up the company subject to such terms as it may deem fit to impose. It does not in any way take away or oust the jurisdiction of a civil court. This sub-section also does not apply to suits or other legal proceedings to be filed before any other competent court prior to the date of passing the winding up order.

17. Sub-section (2) of section 446 of the Act overrides any other law for the time being in force, and confers jurisdiction on the court which is winding up the company, to entertain or dispose of during the course of winding up : (a) any suit or proceeding by or against the company which is being wound up; (b) any claim made by or against the company (including claims by or against any of the branches in India); (c) any application made under section 391 by or in respect of the company; and (d) any question of priorities or any other question whatever, whether on law or fact which may relate to or arise in course of the winding up of the company. The jurisdiction so conferred on the court, which is winding up the company, can also be exercised irrespective of whether such or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for winding up of the company or before or after the commencement of the Companies (Amendment) Act, 1960. Thus, the jurisdiction conferred upon the court which is winding up the company under sub-section (2) of section 446 of the Act, becomes exercisable from the date the winding up order is passed, the covers the proceedings filed or commenced even before the order of winding up is passed, and fall within the clauses (a) to (d) as set out in sub-section (2) of section 446 of Act. As a consequence thereof, no suit or other legal proceeding pending against such company in any court other than the court which is winding up the company, shall be proceeded with and the same shall have to be transferred to the court which is winding up the company; and the same shall have to be disposed of by that court. Sub-section (3) of section 446 of the Act gives effect to this consequence and specifically provides for transfer of pending suits and other legal proceedings to the court which is winding up the company. However, the proceedings in appeal pending before the Supreme Court or a High Court are excluded from the purview of sub-section (1) and sub-section (3) of section 446 of the Act. Thus, the object of section 446 of the Act is to ensure that no suit or other legal proceeding pending against the company in any court other than the court which is winding up the company, shall go on and the same shall have to be transferred to and disposed of by the court which is winding up the company. Similarly, the court which is winding up the company is also conferred with the jurisdiction to entertain and dispose of the proceedings relating to the company which is being wound up, as set out in clauses (a) to (d) of sub-section (2) of section 446 of the Act. Thus, the effect of section 446 is to ensure that no suit or proceedings or application can be entertained or disposed of against the company by any other court other than the court which is winding up the company and similarly no suit or other legal proceeding pending against the company in any court other than the court which is winding up the company, shall go on except in the court which is winding up the company. It is also relevant to notice that section 446 of the Act, does not prescribe any period of limitation for institution of suits or proceedings or applications set out in clauses (a) to (d) of sub-section (2) of section 446 of the Act either before any court or before the court which is winding up the company. Consequently, the object of this provision is to avoid inevitable delay and expenses which would be incidental to the institution and trial of a suit and also to avoid interference with the proceedings of winding up, so that the company, which is ordered to be wound up, will be free from prolonged litigation in various courts and avoid expensive litigation, as all the proceedings are to be instituted and entertained by the court winding up the company. This also results in accelerating the winding up proceedings. It is also one of the objects as pointed out by the Supreme Court in Sudarshan Chits (I.) Ltd. [1985] 58 Comp Cas 633, as adverted to by us earlier in para 8.

18. The jurisdiction of the court under sub-section (2) of section 446 of the Act commences from the date the winding up order is passed. However, it is noticed that the learned single judge of this court in Karnataka Light Metal Industries P. Ltd. v. Provisional Liquidator, Karnataka Steel and Wire Products Ltd. [1985] 57 Comp Cas 668 has taken a view that (p. 673) 'the expression 'is winding up' being in the present continuous tense grammatically, provides a clue to the true intention of the Legislature which is that even before a winding up order is actually made, the court which is seized of the proceedings can and may in its discretion entertain or dispose of any claim made by or against the company. I, therefore, see no reason to read any ambiguity into the language of sub-section (2) of section 446 of the Act to construe it as acquiring jurisdiction only after the winding up order is made'.

19. It is not possible to agree with the aforesaid view. Section 446 occurs under the heading 'Consequences of winding-up order.' Under this heading sections 444 to 447 are found. Section 441 deals with the commencement of winding-up proceedings, and sections 442 and 443 deal with the powers of the court after the presentation of a winding-up petition. Section 441 provides that where, before the presentation of a petition for winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of passing of the resolution. In any other case, the winding up of a company by the court shall be deemed to commence on the date of presentation of the petition for winding up. Section 442 provides that once a petition for winding up is presented and before the winding up order is passed, where any suit or proceeding against the company is pending in the Supreme Court or in any High Court, the company or any director or contributory, may apply to the court in which the suit or proceeding is pending for stay of proceedings; and in a case where any suit or proceeding is pending against the company in any other court, they may apply to the court having jurisdiction to wind up the company, to restrain further proceedings in the suit or proceedings. Therefore, it is clear that if the jurisdiction of the court which is winding up the company were to commence on the date of the presentation of the petitioner for winding up, or on the date a resolution is passed by the company for voluntary winding up, to entertain or dispose of a suit or proceedings set out in clauses (a) to (d) of sub-section (2) of section 446 of the Act, the provisions like those contained in section 442 of the Act would have been unnecessary. Therefore, the grammatical construction placed by the learned single judge in Karnataka Light Metal Industries' case [1985] 57 Comp Cas 668 on sub-section (2) of section 446 of the Act cannot be approved and accepted. In Jaipal Singh v. Tanwar Finance Pvt. Ltd. [1978] 48 Comp Cas 149 (Delhi), it has been held that the jurisdiction of the court under section 446 of the Act can be exercised only after the winding up order is passed. We, accordingly, overrule the decision in Karnataka Light Metal Industries' case [1985] 57 Comp Cas 668.

20. Section 458A of the Act, as already pointed out, only provides for exclusion of certain time in computing the period of limitation, just as sections 4 to 24 and 26 of the Limitation Act, 1963, make provision for computation of the period of limitation and exclusion of certain periods or extension of the period of limitation.

21. Section 446 of the Act does not create any right or obligation. It only provides for filing suits, claims or other proceedings as set out in sub-section (2) of section 446 of the Act before the court winding up the company instead of a regular court. As already pointed out, it also provides for deciding all suits and proceedings filed and pending on the date the winding-up order is passed by the court winding up the company. Section 446 of the Act does not prescribe any period of limitation. The period of limitation for suits, applications or proceedings or claims etc., as set out in clauses (a) to (d) of sub-section (2) of section 446 of the Act is governed by the relevant provisions of the Limitation Act or the provisions of any other law prescribing the limitation for the same. Therefore, on a reading of section 446 and 458A in the context these sections occur, it is not possible to hold that the cause of action for any claim, suit or proceeding or application by or against the company to be instituted, will accrue only on the appointment of the official liquidator as provisional liquidator. It is relevant to notice that the official liquidator only enforces or recovers the enforceable claims of the company which is being wound up and collects the assets of the company and settles the liabilities. If, on the date of the commencement of the proceeding for winding up of the company, any claim by or against the company under the relevant provisions of the Limitation Act or any other law for the time being in force had become barred by time, the fact of passing of the winding-up order and appointment of a provisional liquidator does not result in, and cannot be held to result in, the creation or accrual of a new cause of action so as to give rise to a fresh starting point of limitation.

22. It is also relevant to notice that the cause of action and the subsistence of the claim or right, etc., does not depend upon the passing of a winding-up order or appointment of a provisional liquidator. Both are quite different. However, on this point, the precedents and decisions vary. It is this variation that has necessitated this reference to the Full Bench. Therefore, we now proceed to consider these decisions.

23. A Full Bench of the High Court of Delhi in Faridabad Cold Storage and Allied Industry v. Official Liquidator of Ammonia Supplies Corporation (P.) Ltd., : AIR1978Delhi158 has held that the right to avail of the remedy by filing a claim petition as against the suit conferred by section 446(2)(b) can be availed of only in a court which is winding up the company and, therefore, it goes without saying that the right to avail of the remedy provided by the aforesaid clause (b) will arise only after the passing of the winding up order. So long as the winding up order is not passed, no claim can be preferred under section 446(2)(b).

24. This decision has been followed in some of the decisions rendered by the other High Courts. However, we are of the view that the very basis of the decision is not correct. Enforceability of the claim of the company did not depend upon the substitution of sub-section (2) of section 446 of the Act by Act No. 65 of 1990 nor does it depend upon the passing of an order of winding up or the appointment of official liquidator as provisional liquidator. Even before the passing of the winding up order or the appointment of the official liquidator as provisional liquidator, the claim of the company must have been subsisting and it must have been enforceable in accordance with the provisions of the Act, the law of limitation and any other law for the time being in force. If the claim of the company under winding up was not subsisting as having become barred by time, on or before the commencement of the winding up proceeding there was no question of enforcement of the same on the passing of the winding up order or on the appointment of official liquidator as provisional liquidator. The provisional liquidator cannot, and does not have any right or claim different from those available to the company under winding up before the commencement of the winding up proceeding. Of course any claim of the company which becomes due on or after the commencement of the winding up proceeding, or had not become barred by time on or before the commencement of the winding up proceeding, he can enforce and recover the same by making an application under section 446(2)(b) of the Act within the period of limitation computed as per the period prescribed under the relevant article of the Limitation Act and on excluding the two periods mentioned in section 458A of the Act. Therefore, with great respect, we find it difficult to accept the reasoning in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB] that as the right to avail of the remedy provided under section 446(2)(b) of the Act, becomes available to the official liquidator only on the passing of the winding up order; therefore, the period of limitation to enforce the claim through the 'court winding up the company' should be computed from the date on which the winding up order is passed.

25. The object of section 446 read with section 458A of the Act is not to make the claim of the company under winding up enforceable or revive it even though it had become barred by time before the commencement of the winding up proceedings. The object of section 446 has been specifically pointed out by the Supreme Court in Sudarshan Chits (I.) Ltd. v. G. Sukumaran Pillai, : [1985]1SCR511 which has already been extracted in para 8 of this order.

26. It is also not possible to agree with the decision in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB] that for the proceedings to be initiated under clause (b) of sub-section (2) of section 446 of the Act, by the official liquidator, article 137 of the Limitation Act, 1963, would apply. This article is a residuary article. It would apply only if there is no other article applicable to the nature of the claim. Even otherwise, unless it is otherwise provided by law, it is not the form, or the forum, or the mode of enforcement of the claim that would decide the application of the law of limitation but it is the nature of the claim made before the court winding up the company, and the relevant provisions of the Limitation Act, which prescribe the limitation for such claims, which would be relevant for the purpose of determining the commencement and expiry of the period of limitation for a particular claim.

27. To illustrate the point, if in a given case, a certain sum of money was due to the company for the money lent, article 19 of the Limitation Act, provides for three years from the date when the loan is made. If, in such a case, more than three years had elapsed on the date the winding up proceeding was commenced, it is not possible to appreciate how such a claim can be enforced by the official liquidator after the winding up order is passed taking refuge under article 137 of the Limitation Act and also on the ground that the right to sue has accrued to him only on the date the winding up order is passed. Similarly several claims answering the descriptions mentioned in various articles of the Schedule to the Limitation Act which had become time-barred on the date the winding up proceedings was commenced, cannot be enforced applying article 137 of the Limitation Act.

28. It also appears that in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB] for coming to the conclusion that article 137 of the Limitation Act would be available for a claim filed under section 446(2)(b) of the Act, two decisions of the Supreme Court in the Kerala State Electricity Board v. T. P. Kunhaliumma, : [1977]1SCR996 and Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, : (1969)IILLJ651SC , have been relied upon.

29. In Kerala State Electricity Board's case, : [1977]1SCR996 , the respondent had filed a petition under sections 10 and 16(5) of the Indian Telegraph Act, 1885, read with section 51 of the Indian Electricity Act, 1910, claiming compensation against the appellant - Kerala State Electricity Board. The Electricity Board assessed the compensation at Rs. 1,619.90. The respondent filed a petition before the District Judge, Tellicherry, under section 16(3) of the Indian Telegraph Act, 1885, claiming enhanced compensation. Before the District Judge, a question arose as to whether the provisions of article 137 of the Limitation Act, 1963, were applicable to the petition filed under section 16(3) of the Indian Telegraph Act, 1885. The Supreme Court held that the District Judge acted judicially as a court. It was also held that 'where by statutes, matters are referred for determination by a court of record with no further provision, the necessary implication is that the court will determine the matters as a court (see National Telephone Co. Ltd. v. Postmaster General [1913] AC 546 (HL). In the present case, the statute makes a reference to the District Judge as the Presiding Judge of the District Court. In many statutes, reference is made to the District Judge under this particular title while the intention is to refer to the court of the District Judge. The Telegraph Act, section 16, contains intrinsic evidence that the District Judge is mentioned there as the court of the District Judge ....' 'The District Judge under the Telegraph Act, acts as a civil court in dealing with applications under section 16 of the Telegraph Act.' Thereafter, it was further held thus : [1977]1SCR942 :

'The changed definition of the words 'applicant' and 'application' contained in sections 2(a) and 2(b) of the 1963 Limitation Act indicates the object of the Limitation Act to include petitions, original or otherwise, under special laws. The interpretation which was given to article 181 of the 1908 Limitation Act, on the principle of ejusdem generis is not applicable with regard to article 137 of the 1963 Limitation Act. Article 137 stands in isolation from all other articles in Part I of the third division. This court in Nityananda Joshi's case, : (1969)IILLJ711SC , has rightly thrown doubt on the two-judge Bench decision of this court in Athani Municipal Council's, case : (1969)IILLJ651SC where this court construed article 137 to be referable to applications under the Civil Procedure Code. Article 137 includes petitions within the word 'applications'. These petitions and applications can be under any special Act as in the present case.

The conclusion we reach is that article 137 of the 1963 Limitation Act will apply to any petition or application filed under any Act to a civil court. With respect we differ from the view taken by the two-judge Bench of this court in Athani Municipal Council's case, : (1969)IILLJ651SC , and hold that article 137 of the 1963 Limitation Act, is not confined to applications contemplated by or under the Code of Civil Procedure. The petition in the present case was to the District Judge as a court. The petition was one contemplated by the Telegraph Act for judicial decision. The petition is an application falling within the scope of article 137 of the 1963 Limitation Act.'

30. Therefore, it is clear that in Kerala State Electricity Board's case, : [1977]1SCR996 , it has not been laid down that article 137 of the Limitation Act could be availed of even though there is another article in the Limitation Act which is relevant to the claim in question. Similarly, in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, : (1969)IILLJ651SC , also, no such proposition has been laid down. This is clear from para 11 of the judgment which is as follows (at page 1343) :

'The point in our opinion, may be looked at from another angle also. When this court earlier held that all the article in the third division to the Schedule, including article 181 of the Limitation Act of 1908, governed applications under the Code of Civil Procedure only, it clearly implied that the applications must be presented to a court governed by the Code of Civil Procedure. Even the applications under the Arbitration Act that were included within the third division by amendment of articles 158 and 178 were to be presented to courts whose proceedings were governed by the Code of Civil Procedure. At best the further amendment now made enlarges the scope of the third division of the Schedule so as also to include some applications presented to courts governed by the Code of Criminal Procedure. One factor at least remains constant and that is that the applications must be to courts to be governed by the articles in this division. The scope of the various articles in this division cannot be held to have been so enlarged as to include within them applications to bodies other than courts, such as a quasi-judicial Tribunal or even an executive authority. An Industrial Tribunal or a Labour Court dealing with applications or references under the Act are not courts and they are in no way governed either by the Code of Civil Procedure or the Code of Criminal Procedure. We cannot, therefore, accept the submission made that this article will apply even to applications made to an Industrial Tribunal or a Labour Court. The alterations made in the article and in the new Act cannot, in our opinion, justify the interpretation that even applications presented to bodies, other than courts, are now to be governed for purposes of limitation by article 137.'

31. Of course, the aforesaid proposition has not been accepted by the larger Bench of the Supreme Court, in Kerala State Electricity Board's case, : [1977]1SCR996 , as is evident from para 21 of the judgment in that case, which we have extracted above.

32. We may also point out here that in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB], in para 17 of the judgment, it has been rightly held that the expression 'any claim' occurring in section 446(2B) of the Act, will have to be interpreted as a claim which is legally enforceable. But, nevertheless, it has been held that the limitation has to be computed from the date the winding up order is passed because the right to make an application accrues to the official liquidator only on and from the date the winding up order is passed. We may point out that a claim enforceable by law must be one which was enforceable at law on the date the winding up proceedings commenced. In other words, it should not have become time-barred on that date. Further, as already pointed out, the official liquidator does not and cannot be held to enjoy higher or fresh rights than those of the company under winding up. If any claim of the company had become barred by time, the official liquidator cannot revive it and recover the same through a proceeding under section 446(2) of the Act.

33. Therefore, it is not possible to agree with the view expressed in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB].

34. In R. C. Abrol and Co. (Pvt.) Ltd. v. A. R. Chadha and Co., : AIR1978Delhi167 [FB], the Full Bench of the Delhi High Court following the decisions of the Supreme Court in Kerala State Electricity Board, : [1977]1SCR996 and Town Municipal Council, Athani's case, : (1969)IILLJ651SC , has held that article 137 of the Limitation Act, 1963, is applicable to the applications filed by the official liquidator under section 446(2)(b) and section 543 of the Act, and the limitation was computed from the date the winding up order was passed on the ground that the right to apply accrued on the date the winding up order was passed.

35. Again, the same Full Bench of the Delhi High Court in Jaimal Singh Makin v. Official Liquidator of Majestic Financiers (P.) Ltd., : AIR1978Delhi169 has taken a similar view. In this case, section 446(2)(b) of the Act has been referred to but the computation of the period of limitation and the applicability of article 137 of the Limitation Act has not been considered.

36. For the very same reasons on which we have found ourselves in disagreement with the view expressed in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB], we find it difficult to agree with the view expressed in the aforesaid two decisions also : AIR1978Delhi167 and : AIR1978Delhi169 .

37. In Maruti Ltd. (In Liquidation) v. Parry and Co. Ltd. [1989] 66 Comp Cas 309, a Division Bench of the Punjab and Haryana High Court, following the Full Bench decision of the Delhi High Court in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) has held that the law of limitation is a procedural law; it does not bar the right but only bars the remedy. It has been further held that when the action can be deemed to have arisen on the date of the winding up order, the period of limitation for an application making a claim under section 466(2) of the Act on behalf of the company which is being wound up shall commence from the date of the winding up order and the period from the date of commencement of the winding up proceedings of the company to the date on which the winding up order passed both inclusive and a period of one year immediately following the date of the winding up order shall be excluded in computing the period of three years provided by article 137 of the Limitation. This decision is also followed by a learned single judge of the same Punjab and Haryana High Court in Maruti Ltd. (In Liquidation) v. P. R. Sasidharan [1990] 68 Comp Cas 5. As already pointed out while considering the decision in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB], it is not possible to agree with these decisions which take the same view as the one taken in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB].

38. Similarly, a Full Bench of the High Court of Kerala in K. P. Ulahannan v. Wandoor Jupiter Chits (P.) Ltd. : AIR1989Ker41 has followed the decisions in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB] and R. C. Abrol and Co. (Pvt.) Ltd.'s case, : AIR1978Delhi167 [FB]. In this decision also, it has been held that since the right of the official liquidator to apply under section 446(2)(b) of the Act arises only on the passing of the winding up order or on the appointment of a provisional liquidator, the starting point of limitation for claims under the said provision is the date on which the winding up order is passed or a provisional liquidator is appointed; that as the claim is summary and is by way of an application, it has been held that article 137 of the Limitation Act would apply to such proceedings. The reason given for coming to the conclusion as contained in para 8 of the said decision is as follows (at page 186) :

'It was in pursuance of these recommendations of the Committee that sub-section (2) of section 446 was amended. The provision for filing any suit or proceeding by or against the company was already there before the amendment. The amendment introduced in clauses (b), (c) and (d) to sub-section (2) of section 446 was intended to confer a very comprehensive jurisdiction upon the company court to decide all claims by or against the company so that the winding up proceedings can be expedited. It is for a similar objective that section 45B had been added to the Banking Companies Act, 1949. The scope of section 45B of the Act was considered by the Supreme Court in Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd. : 1955CriLJ555 . The Supreme Court dealing with Part III-A of the Banking Companies Act, came to the conclusion that it was to avoid unnecessary delay and expense that the sections in Part III-A of the Act were brought in and the claims under section 45B are summary and are initiated by way of applications.'

39. In Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd. [1955] 25 Comp Cas 19 (SC), the Supreme Court has not held that section 45B of the Banking Companies Act, 1949, covered claims which were barred by time on the date section 45B came into force. In the said case, the Supreme Court, regarding the scope of section 45B of the Banking Companies Act, has held as follows (at page 23) :

'It appears to us that consistently with this policy, and with the scheme of the amending Act, where the liquidator has to approach the court under section 45B for relief in respect of matters legitimately falling within the scope thereof, elaborate proceedings by way of suit involving time and expense, to the detriment of the ultimate interests of the company under liquidation, were not contemplated. In the absence of any specific provision in this behalf in the Act itself and in the absence of any rules framed by the High Court concerned under section 45G, the procedure must be taken to be one left to the judgment and discretion of the court, having regard to the nature of the claim and of the questions therein involved ... It is to be remembered that section 45B is not confined to claims for recovery of money or recovery of property movable or immovable, but comprehends all sorts of claims which relate to or arise in the course of winding up. Obviously, the normal proceeding that the section contemplated must be taken to be a summary proceeding by way of application.'

40. Therefore, it is not possible to read the decision of the Supreme Court in Dhirendra Chandra Pal's case [1955] 25 Comp Cas 19 (SC) as holding that section 45B of the Banking Companies Act, gave rise to a fresh cause of action and a fresh starting point of limitation. Therefore, we find it difficult to agree with the decision in K. P. Ulahannan's case, : AIR1989Ker41 [FB].

41. A learned single judge of the Kerala High Court in New Kerala Roadways Pvt. Ltd. (In Liquidation) v. K. K. Nanu [1989] 66 Comp Cas 715, has also taken the same view as the one taken in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB]. Similarly, in Liberty Finance (P.) Ltd., In re [1979] 49 Comp Cas 287 (Delhi), a learned single judge of the Delhi High Court has also taken a similar view following the decision in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB]. For the reasons already given while considering the decision in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) [FB] it is not possible to agree with these decisions also.

42. In Gleitlargor (India) P. Ltd. and H. S. Kamlani, Official Liquidator v. Mazagaon Dock Ltd. [1985] 57 Comp Cas 742 (Bom), the question as to computation of limitation has not been decided. In this case, the claim was in time on the date the winding up petition was filed. Therefore, the question as to the manner in which the period of limitation has to be computed did not arise. In this decision, regarding section 458A of the Act it was held that the provision was intended to extend the limitation period for the benefit of the company (in liquidation) and the official liquidator appointed to carry on its winding-up process by collecting the assets and distributing the same among those entitled to the same. It was further held that the underlying object in extending the limitation obviously is to enable the liquidator to take charge of the company's affairs, to examine the records, account books, study the statements, decide against whom to proceed and in what manner. The proceedings so initiated by him whether by way of suit or judge's summons for enforcement of the recovery of debts cannot but be on behalf of the company having regard to his source of authority, viz., the provisions of the Companies Act and the statutory obligation in discharge of which he has to act in that behalf. Therefore, even this decision cannot be of any assistance to the stand taken by the official liquidator that as he is entitled to make an application only on and from the date the order for winding up of the company is passed and, therefore, the limitation commences from that date.

43. A Division Bench decision of the Madras High Court in Official Liquidator, Radel Services P. Ltd. v. Southern Screws P. Ltd. [1988] 63 Comp Cas 749 accords with the view taken by us. In this decision, the Full Bench decisions of the High Court of Delhi in Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) and Jaimal Singh Makin's case [1978] 48 Comp Cas 419 (Delhi) have not been accepted as correct. After referring to the Statement of Objects and Reasons for substituting section 446(2) of the Act and the aforesaid two Full Bench decisions of the High Court of Delhi, with reference to section 446(2) of the Act, it has been held as follows (at page 759) :

'That leads us to the question as to what is the article of the Limitation Act that is applicable to such a application. As observed by the learned judge in his referring order, where a suit is filed before a company court to enforce a claim, there is no difficulty in holding that the article of limitation applicable to such a suit will be the appropriate article in the First Schedule to the Limitation Act, 1963, dealing with suits. However, where an application is filed instead of a plaint, the said application, as already stated, will have to be treated as a suit, and, therefore, will be governed by that article of the Limitation Act applicable to suits of that nature. Otherwise, there would be an anomaly of the same claim having two different periods of limitation according to the form in which the proceeding in initiated at the option of the liquidator. Under section 3 of the Limitation Act, 1963, every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence. For the purposes of the Act, a suit is instituted, in a ordinary case, 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 his claim to the official liquidator. Sections 4 to 24 contain the provisions for making the computation of the periods of extension of the period of limitation.'

44. After quoting section 458A of the Act, it has been held as follows (at page 762) :

'It may be seen from this provision that in computing the period of limitation the time during which the company petition for liquidation was pending, as also a period of one year from the date of the winding up order will have to be excluded. Therefore, we have to first find out that article of limitation under the Limitation Act applicable to the suit or proceeding and exclude from the total period provided under that article, the periods contemplated under section 458A and find out whether, on the date when the application or suit was filed, it was in time. Having regard to the conclusion, which we have already referred to, the concurrent jurisdiction has been conferred both on the civil court as also on the company court, and option given to the liquidator to make the claim by way of an application or a suit in respect of money claims and the need to treat this as a suit, though in form an application, in view of the special provision in the Companies Act, that when a claim is made it has to be decided whether it could have formed a claim in a regular suit and, if that is so, the limitation applicable to the proceeding will have to be applied. If such a claim could not be the subject matter of a suit, but could be claimed by way of an application only, then the corresponding article applicable to such an application should be determined. In either case, in computing the period of limitation, the two periods referred to in section 458A will have to be excluded. The Privy Council's decision referred to above related to a case arising under the India Companies Act, 1913, which did not have provisions like section 446(2) and section 458A and, therefore, though for the purpose of understanding certain words like 'money-due', 'suit instituted', etc., that decision could be referred to as an authority, it could not be considered to be an authority for holding that an application filed under section 446(2)(b) could not be treated as in the nature of a plaint or that the limitation applicable thereto is the limitation provided under article 137, and not any other article. The Full Bench decision of the Delhi High Court in Jaimal Singh Makin v. Official Liquidator of Majestic Financiers P. Ltd. [1978] 48 Comp Cas 419 considered the question as to whether the provision of section 446(2) which applies to any claim could be applied to claims which were already barred by time on the date when the application is so filed under section 446(2)(b) and held that the expression 'any claim' in clause (b) of section 446(2) means any claim enforceable at law and, since the right to avail of the remedy provided under clause (b) of section 446(2) arises only after the passing of the winding up order, the appropriate dated to be seen for the purpose of determining whether the claim was enforceable at law or not, is the date of the winding up order. With great respect to the learned judges of the Delhi High Court, we are unable to agree with the view. Neither section 446(2) nor section 458A relates to any determination of the enforceability of the claim or the dates on which it shall be enforceable. Section 446(2)(b) only enables the liquidator to make the claim by way of an application in the company court. The question whether the claim is enforceable or not, is to be determined with reference to the provisions in the Limitation Act, and that could be decided only with reference to the cause of action and the date on which the suit or application is filed. As already stated, section 458A is only a computation provision for the purpose of limitation. Section 446 confers jurisdiction on the company court and enables the liquidator to file a suit or an application before the company court in respect of a money claim. No claim is wiped out except by payment and discharge. Only the enforceability of that claim for recovery may be barred. Whether the claim is barred or not is only a question of limitation.

Therefore, whether the claim was barred or was enforceable has to be determined with reference to the cause of action arising and the date of the filing only and all the other provisions will only enable the computation of the period. We are, therefore, of the view that though the application is filed in exercise of the option provided to the liquidator, if the claim has to be considered as in the nature of a suit, the provisions in the Limitation Act for such suits only would govern the case and not article 137. Again, we have to make it clear that in each case, the application of the liquidator will have to be considered with reference to the nature of the claim and not the article applicable in the Limitation Act and then only the computation could be done in order to find out whether the claim was in time or not.'

45. As the view expressed by the Division Bench of the High Court of Madras in the aforesaid case accords with our view, we agree with the said view expressed in the above decision.

46. A Division Bench of this court in Official Liquidator v. Hindustan Lever Ltd. [1982] 2 Karnataka Law Chronicle 1, proceeded on the basis that the period of limitation prescribed under article 137 of the Limitation Act applied to a case wherein the official liquidator files an application against the respondent for recovery of certain sum due from the respondent as a debt. The facts of that case were :

(1) Amount became due on 30-5-1973;

(2) Petition for winding up the company was filed on 14-3-1973;

(3) Order for winding up was passed on 8-3-1974;

(4) Application for recovery of amount was filed on 1-3-1979.

47. In this decision, though the application was held to be barred by time, the contention that the right to claim accrued only from 8-3-1974, the date on which the winding up order was passed was accepted. No doubt, on the date the winding up order was passed, the claim had not become time-barred because the amount became due only on 30-5-1973, whereas the petition for winding up was filed on 14-3-1973. Even after the expiry of one year from the date of appointment of the official liquidator as provisional liquidator or the date on which the winding up order was passed, the application for recovery of money was filed beyond three years. Therefore, it was not a case in which it was necessary for the court to decide as to whether the right to sue accrues on the date the official liquidator was appointed, and no such question also was decided in that case. To the extent the decision seems to hold that the right to sue accrues only from the date the winding up order is passed, the view cannot be accepted as correct. Therefore, we overrule this decision in so far as it holds that the right to claim the debt accrues from the date the winding up order is passed.

48. In Unico Trading and Chit Funds India (P.) Ltd. v. S. H. Lohati [1981] 2 KLJ 144; [1982] 52 Comp Cas 340 (Kar), a learned single judge of this High Court has followed the Full Bench decision of the Delhi High Court in Faridabad Cold Storage's case, : AIR1978Delhi158 , and has held that the limitation commences from time the right to sue accrues and the 'right to sue' accrues to the official liquidator only on the date the court makes the winding up order. The learned judge has followed this decision reported in [1982] 52 Comp Cas 340 (Kar) in the two subsequent decisions rendered by him in Galaxy Trading and Chit Funds (P.) Ltd. (In Liquidation) v. S. Bashanudien [1984] 56 Comp Cas 479 (Kar) and Unico Trading and Chit Funds (India) Pvt. Ltd. (In Liquidation) v. Zahoor Hassan [1991] 71 Comp Cas 270 (Kar).

49. No doubt in Galaxy Trading and Chit Funds (P.) Ltd.'s case [1984] 56 Comp Cas 479, the following observation was made (at page 485) :

'If on April 1, 1979, the claim against the first respondent could not be enforced on account of the bar of limitation, considering the transaction as a chit transaction and no more, then notwithstanding the fact that by virtue of the provisions contained in section 458A of the Companies Act and applying article 137 of the Limitation Act, an application under section 446(2)(b) of the Companies Act not being a suit, there was no legally enforceable claim on the date the petition for winding up was presented. If this view is applicable, then the claim against the first respondent to compel him to pay the balance of the subscription together with the interest accrued was not maintainable under that section.'

50. The aforesaid underlined observation is quite inconsistent with the following observation made by the learned judge in the earlier portion of the very same judgment (at page 485) :

'.... It is now well-settled that in so far as the claim application under section 446(2)(b) of the Companies Act is concerned, the right to sue accrues to the official liquidator only from the date the winding up order was made and that he has a period of three years from that date and the period of additional one year provided for under section 458A of the Companies Act read with the relevant article for computing the limitation, that is, the residuary article 137 of the Limitation Act, and not the relevant articles provided for filing a suit in so far as they relate to a claim ....'

51. In Unico Trading and Chit Funds (India) Pvt. Ltd. (In Liquidation) v. Zahoor Hassan [1991] 71 Comp Cas 270 (Kar), following the decision reported in [1982] 52 Comp Cas 340 (Kar), it has been held thus (at p. 271) :

'The claim petition by the official liquidator is a special proceeding by which the official liquidator is empowered to sue all debtors of the company in liquidation. By operation of law, the moment the winding up petition is filed, which, in the instant case was on October 3, 1975, the period of limitation against the company in liquidation stops running and is revived only after the winding up order is made. In other words, if on the date of the presentation of the winding up petition, the debt was enforceable, then the official liquidator may enforce the payment of the debt by virtue of the winding up order and not by virtue of the cause of action the company in liquidation had against the subscriber. Therefore, this being a special proceeding and not being a suit for recovery of money, it is covered by the residuary article 137 of the Limitation Act (see Unico Trading and Chit Funds India (P.) Ltd. v. S. H. Lohati [1982] 52 Comp Cas 340 (Kar). The right to sue accrues only after the winding up order is made. Therefore, he has three year's time plus one year under section 458A of the Act to sue the debtors. Therefore, the petition filed on 30th January, 1981, is well within that four-years period as the debt was alive on the date of presentation of the winding up petition.'

52. We find in this decision also two inconsistent statements, viz., that if the claim was enforceable on the date the winding up petition was filed, the official liquidator may enforce the payment of the debt by virtue of the winding up order that the right to sue accrues only after the winding up order is made, therefore, he has three years time. It is not possible to accept the latter statement as correct. These two propositions do not go together. If the claim was not enforceable on the date the winding up petition was filed as having been barred by time, it is not possible to hold how the order of winding up would revive or give rise to a fresh cause of action or a fresh starting point of limitation. The official liquidator only enforces the claims of the company. Therefore, there is no question of starting a fresh period of limitation. If the cause of action had arisen prior to the filing of the petition for winding up and the period of limitation for enforcing the claim had not expired on the date of the petition for winding up, no doubt the official liquidator can enforce such a claim within the time allowed by law. But if the claim of the company had become barred by time on the date the petition for winding up was filed, it is not possible to hold by any interpretation of law that the official liquidator would have a fresh period of limitation from the date the winding up order is passed. Thus the basis or the two decisions of the learned single judge in Galaxy Trading and Chit Funds (P.) Ltd. (In Liquidation) v. S. Bashanudien [1984] 56 Comp Cas 479 and Unico Trading and Chit Funds (India) Pvt. Ltd. (In Liquidation) v. Zahoor Hassan [1991] 71 Comp Cas 270 (Kar) is the decision in Unico Trading and Chit Funds India (P.) Ltd. v. S. H. Lohati [1981] 2 Kar LJ 144; [1982] 52 Comp Cas 340 which in turn is based on the decision of a Full Bench of the High Court of Delhi in Faridabad Cold Storage's case, : AIR1978Delhi158 . For the reasons already mentioned while dealing with Faridabad Cold Storage's case [1978] 48 Comp Cas 432 (Delhi) and also for the reasons stated hereinabove, we hold with great respect that the aforesaid three decisions rendered we hold with great respect that the aforesaid three decisions rendered by the learned single judge of this High Court do not lay down the law correctly. We, accordingly overrule the same.

53. For the reasons stated above our answer to the question referred to the Full Bench is as follows :

'The correct period of limitation for claims made under section 446(2)(b) of the Companies Act, is the relevant article in the Limitation Act, 1963, as applicable to the nature of the claims. Whether the claim is enforceable or not is to be determined with reference to the relevant article in the Limitation Act, as applicable to the nature of the claim and not with reference to the form by which the claim is enforced or by or through whom it is enforced. In a given case, if the claim does not fall under any one of the relevant articles in the Schedule to the Limitation Act, the residuary article 137 will be applicable. The expression 'when the right to apply accrues' has to be decided with reference to the right of the company and the nature of the claim. In other words, as to when the right to recover the claim accrued to the company, and not on the basis that the 'right to apply accrues only on the date the winding up order is passed or the official liquidator is appointed as provisional liquidator is appointed as provisional liquidator' as the liquidator enforces the claim of the company. In computing the period of limitation, for claims to be made under section 446(2)(b) of the Act, firstly, the applicability of the relevant article with reference to the nature of the claim has to be decided and then the question as to whether such period of limitation has or had not expired on the date the petition for winding up was filed or the winding up proceeding commenced has to be determined. In the event it is found that as per the period of limitation prescribed by the relevant article applicable to the claim, the period of limitation had not expired on the date the winding up proceeding commenced, to that period of limitation, the two periods described in section 458A of the Act, are to be added and the question as to whether on the date the application filed under section 446(2)(b) of the Act was within time or not, has to be determined. In other words, in the period computed from the date the limitation commenced as per the relevant article in the Schedule to the Limitation Act till the date of filing of the application under section 446(2)(b) of the Act, the two periods stated in section 458A of the Act are to be excluded.'

54. These cases shall now be decided by a Division Bench, in the light of the opinion rendered by us.


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