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Jagdish Parshad Gupta Vs. Youngmen Benefit Chit Fund (P.) Ltd. (In Liquidation) and Others - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtDelhi High Court
Decided On
Case NumberCompany Appeal No. 20 of 1979
Judge
Reported inILR1981Delhi790
Acts Companies Act, 1956 - Sections 441(1), 458A, 522, 526(1) and 526(2)
AppellantJagdish Parshad Gupta
RespondentYoungmen Benefit Chit Fund (P.) Ltd. (In Liquidation) and Others
Cases Referred(K. Kamaraja Nadar v. Kanju Thevar
Excerpt:
.....inhere to such company ; section 458a of the companies act which lays down that in computing the period of limitation prescribed for a suit or application in the name of and on behalf of the 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 and the period of one year immediately following the date of winding up, shall be excluded. thereforee, 27-4-1973 being the date of commencement of winding up and 13-11-1975 being the date on which order of supervision was passed, the period between 27-4-1973 and 13-11-1975 and a year thereafter has to be excluded. limitation would, thereforee be available for the full period of 3 years from 13-11-1976. claim having been filed..........court. one of the provisions is s. 458a of the companies act which lays down that in computing the period of limitation prescribed for a suit or application in the name and on behalf of the 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 and the period of one year immediately following the date of winding-up shall be excluded. now, april 27, 1973, being the date of special resolution in terms of s. 441(1) of the act, that would be the date of commencement of winding up and the order of supervision having been passed on november 13, 1975, the period between april 27, 1973, and january 13, 1975, and a year thereafter has to be excluded. limitation would, thereforee, be.....
Judgment:

Sachar, J.

1. This is an appeal against the order of the learned single judge by which he held that the application filed by the liquidator was within time. The company, by a special resolution of April 27, 1973, decided to go in for voluntary winding up. Later on, it moved the court and by an order of November 13, 1975, the court ordered that the winding up shall continue but subject to the supervision of the court. On July 14, 1978, the official liquidator who had, in the meanwhile, been appointed for the voluntary liquidation filed a claim against the appellant demanding Rs. 4,160. Preliminary objection was raised by the appellant that the application was barred by time. This plea has been negatived by the learned company judge and the appellant has come up in appeal.

2. Why the plea of limitation was taken because, according to the appellant, limitation would start from April 27, 1973, and as the period under art. 137 of the Limitation Act is 3 years the application filed in 1978 would be barred by time. Now, s. 522 of the Companies Act empowers the court if a company has passed a resolution for voluntary winding up, to direct that the voluntary winding up should continue but subject to supervision of the court. This was what was done by the order of November 13, 1975. Section 523 provides that the effect of a petition for winding up subject to the supervision of the court, is to give jurisdiction to the court over suits and legal proceedings and it is to be deemed to be a petition for winding up by the court. Section 526(1) empowers the liquidator, subject to any restriction imposed by the court, to exercise all its powers without the sanction or intervention of the court in the same manner as if the company were to be wound up altogether voluntarily. Sub-section (2) of s. 526, however, lays down that except as provided in sub-s. (1) any order made by the court for a winding-up subject to the supervision of the court shall, for all purposes ...... be deemed to be an order of the court for winding up of the company by the court. It is apparent that sub-s. (2) of s. 526 creates a legal fiction to the effect that an order passed for winding up subject to the supervision of the court is to be deemed to be an order for the winding up of the company by the court. All the consequences, thereforee, which flow from an order of the winding up of the company by the court must necessarily ensure to such company which is being wound up subject to the supervision of the court. One of the provisions is s. 458A of the Companies Act which lays down that in computing the period of limitation prescribed for a suit or application in the name and on behalf of the 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 and the period of one year immediately following the date of winding-up shall be excluded. Now, April 27, 1973, being the date of special resolution in terms of s. 441(1) of the Act, that would be the date of commencement of winding up and the order of supervision having been passed on November 13, 1975, the period between April 27, 1973, and January 13, 1975, and a year thereafter has to be excluded. Limitation would, thereforee, be available for the full period of 3 years from November 13, 1976. The claim was, however, filed on July 14, 1978, which is as a matter of fact within three years from November 13, 1975, the date of order continuing the winding up subject to the supervision of the court. Mr. Satish Chandra, however, wanted to urge that even the voluntary liquidator could move the application under s. 446 and, thereforee, the passing of an order continuing the winding up subject to the supervision of the court can have no effect on the limitation. The learned judge has found this plea against the appellant. We feel it is unnecessary for us to go into this aspect, the reason being that on the admitted facts the application was within time. It is self-evident that the period from April 27, 1973, to purpose of limitation under s. 458A of the Act. Not to invoke s. 458A of the Act, as was urged by Mr. Satish Chandra, would be to ignore the mandate of s. 526(2) of the Act which clearly says that the order made by the court for a winding up subject to the supervision of the court shall for all purposes be deemed to be an order of the court for winding up the company by the court. The deeming provision obviously commands that when a person is deemed to be something the only meaning possible is that whether he is not in reality that something, the Act requires him to be treated as if he were (see - CIT v. Bombay Trust Corporation Ltd.). Similar are the observations in : [1959]1SCR583 (K. Kamaraja Nadar v. Kanju Thevar) to the effect that a deeming provision creates a legal fiction and the effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under these circumstances. Here, in this case, thereforee, though there is no order of the court for winding up the company, yet by virtue of s. 526(2), the court's order making the winding up subject to supervision of the court shall for all purposes be deemed to be an order of the court for winding up the company, and that would inevitably and immediately attract s. 458A of the Act. In that view the application was filed within limitation. We agree with the reasons given in the judgment of the learned single judge and would dismiss the appeal. Costs will abide the final result. The parties are directed to appear before the company judge on February 26, 1981, for further proceedings.


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