Court grants recovery under Companies Act, rejects limitation defense, highlights exclusion of time.

The court allowed the application under section 446(2)(b) of the Companies Act, 1956 for recovery of a sum with interest, rejecting the argument of limitation raised by the first respondent. The court interpreted section 458(A) of the Companies Act in conjunction with the Indian Limitation Act, emphasizing the exclusion of time during the winding up process and one year thereafter in calculating the limitation period. Consequently, the court issued a decree in favor of the applicant against the respondents, holding them jointly and severally liable for the payment as per the judgment terms.

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Issues:
Application under section 446(2)(b) of the Companies Act, 1956 for recovery of a sum with interest - Claim of repayment of loan under H.P. agreement - Barred by limitation or not - Interpretation of section 458(A) of the Companies Act in relation to the Indian Limitation Act.

Analysis:
The Official Liquidator representing a company in provisional liquidation filed an application for direction to the respondents to pay a sum with interest. The first respondent obtained a loan for purchasing plant and machinery and was due a substantial amount as per the books of account. The Official Liquidator issued notices for payment, which were returned unserved. The first respondent contended that the claim was barred by limitation as the repayment period had ended, and the application was filed after a significant delay. However, the court analyzed the provisions of the Indian Limitation Act in conjunction with section 458(A) of the Companies Act to determine the period of limitation. The court emphasized that the exclusion of time during the winding up process and one year following the winding up order was crucial in computing the limitation period.

The court referred to a Supreme Court judgment highlighting that section 458(A) allows for the exclusion of specific periods concerning the winding up of a company when calculating the limitation period. The court rejected the argument that the date of the winding up order relates back to the filing date of the petition, emphasizing that section 458(A) provides a distinct procedure for calculating the limitation period. Therefore, the court concluded that the application was not barred by limitation as the time taken for winding up proceedings and one year thereafter had to be excluded from the limitation period calculation.

In conclusion, the court allowed the application, issuing a decree in favor of the applicant against the respondents for the specified amount with interest. The court held the respondents jointly and severally liable for the payment as per the terms stated in the judgment.

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