Application under Companies Act not time-barred, court orders preliminary hearing

The court held that the application under section 543 of the Companies Act, 1956, was not barred by limitation as the provisions of section 458A applied, excluding certain periods from the computation of the limitation period. The court concluded that the application made by the official liquidator was within the prescribed time limit and ordered it to be posted for preliminary hearing for directions under rule 261 of the Companies (Court) Rules, 1959.

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Issues Involved:
1. Limitation period for filing the application under section 543 of the Companies Act, 1956.
2. Applicability of section 458A of the Companies Act, 1956.
3. Requirement of court sanction for filing the application under section 543.

Issue-wise Detailed Analysis:

1. Limitation Period for Filing the Application under Section 543 of the Companies Act, 1956:
The respondents contended that the application was barred by limitation as it was filed beyond the five-year period prescribed in sub-section (2) of section 543 of the Companies Act, 1956. The winding-up order was passed on August 28, 1981, and the application was filed on October 5, 1987, which is more than five years after the winding-up order.

2. Applicability of Section 458A of the Companies Act, 1956:
The official liquidator argued that section 458A of the Companies Act, 1956, should be applied to exclude certain periods from the computation of the limitation period. According to section 458A, the period from the date of commencement of the winding up to the date of the winding-up order, and one year immediately following the date of the winding-up order, should be excluded. If these periods are excluded, the application would be within the five-year limitation period.

The respondents countered that section 458A was not applicable to the present application because section 543 itself specifically stipulated the period of limitation. They argued that section 458A applies only to suits or applications in the name and on behalf of the company filed after obtaining the sanction of the court, not to applications under section 543.

The court referred to a previous judgment in Arkay Chit and Commercial Trading Co. P. Ltd., In re [1982] 52 Comp Cas 174, where it was held that both the period from the commencement of the winding up to the date of the winding-up order and the period of one year following the winding-up order should be excluded in computing the limitation period. The court agreed with this interpretation, stating that section 458A has an overriding effect and applies to all applications made in the name and on behalf of the company.

3. Requirement of Court Sanction for Filing the Application under Section 543:
The respondents argued that the official liquidator did not obtain the sanction of the court before filing the present application, which is necessary for section 458A to apply. The court, however, noted that an order dated July 2, 1982, in Company Application No. 92 of 1982, had accorded permission to the official liquidator to exercise all or any of the powers under section 457(1) of the Companies Act, which includes the power to institute or defend any legal proceeding in the name and on behalf of the company. The court further held that for applications under section 543(1), the sanction contemplated under section 457 can be implied when the application is presented to the company court itself.

Conclusion:
The court concluded that the present application made by the official liquidator under sub-section (1) of section 543 is in the name and on behalf of the company and that the provisions of section 458A are attracted to such an application. Therefore, if the period covered by section 458A is excluded, the application is within the prescribed time limit. Consequently, the court held that the company application is not barred by time and shall be posted for preliminary hearing for directions under rule 261 of the Companies (Court) Rules, 1959.

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