TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court clarifies Companies Act: Limitation period tied to cause of action, not official liquidator.</h1> <h3>M Thankamani Versus Official Liquidator</h3> The court, in Appeal No. 64 of 1991, overturned a single judge's decision and held that section 458A of the Companies Act, 1956, does not create a new ... Winding up – Exclusion of certain time in computing periods of limitation Issues:Calculation of time for filing a suit or application for recovery of a claim on behalf of a company ordered to be wound up.Detailed Analysis:The judgment involves Appeal No. 64 of 1991, challenging a single judge's decision making the judge's summons absolute. The issue revolves around the interpretation of section 458A of the Companies Act, 1956, regarding the exclusion of time in computing the period of limitation for suits or applications on behalf of a company in liquidation. The judgment consolidates two matters with a common question - how to calculate time for filing a suit or application post a company's winding-up order.The court analyzed the facts of the case, including the execution of a promissory note, the winding-up petition, and subsequent legal proceedings. The key contention was whether the claim was time-barred, considering the provisions of section 458A. The court referred to previous judgments, notably the case of Ch. S. Rao v. Prabhudas S. Budhwani, and compared it with conflicting decisions from the Madras High Court.The court scrutinized section 458A, emphasizing its exclusionary nature in computing the limitation period for company-related suits or applications. It clarified that the provision does not establish a new limitation period but rather excludes specific time frames. The analysis highlighted the suspension and revival of the limitation period based on the winding-up order date and the cause of action accrual.The judgment critiqued the view that the official liquidator acquires a fresh cause of action or extended limitation period under article 137 of the Limitation Act. It distinguished the roles of the official liquidator and the company in liquidation, emphasizing that the limitation period attaches to the cause of action, not the individual prosecuting the claim.The court referenced a Division Bench case concerning the interpretation of section 458A, affirming the extension of the limitation period for the benefit of the company and the official liquidator. It endorsed the underlying objective of enabling the liquidator to manage the company's affairs and pursue debt recoveries on its behalf.Ultimately, the court overruled the previous judgment in Ch. S. Rao's case, asserting that section 458A does not create a new cause of action for the official liquidator. The judgment allowed the appeal, setting aside the earlier order, and dismissed another application as time-barred. No costs were awarded in the matter.In conclusion, the judgment clarifies the computation of time for filing suits or applications on behalf of a company in liquidation, emphasizing the exclusionary provisions of section 458A and the continuity of the limitation period based on specific events in the winding-up process.
TaxTMI 
TaxTMI 
