Time-barred debt cannot support a winding up petition; exclusion of time was rejected under limitation rules.

A winding up petition under the Companies Act, 1956 is maintainable only where the underlying debt is legally recoverable and not time-barred. A barred claim cannot be enforced through the deeming fiction of inability to pay debts, and Section 5 of the Limitation Act, 1961 does not apply to such original proceedings. Time spent in earlier Bombay proceedings was not excluded in full because the claimant had already faced jurisdictional and service objections and still delayed further action. Even after the notice period and claimed exclusion, the petition remained beyond limitation, so the plea for exclusion of time was rejected.

---

---

Issues: Whether a winding up petition under the Companies Act, 1956 can be maintained on the basis of a debt that is barred by limitation, and whether the appellant was entitled to exclusion of time spent in the earlier Bombay proceedings.

Analysis: A petition under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956 is maintainable only if the debt is legally recoverable and due. A claim that is already barred by limitation cannot be used to invoke the deeming fiction of inability to pay debts. The earlier proceedings before the Bombay High Court did not justify exclusion of the entire period claimed, since the respondent had already objected to jurisdiction and to non-service at the registered office, and the appellant still delayed further action. Even after giving credit for the period spent in the earlier proceedings and the notice period under Section 434(1)(a), the petition remained beyond limitation. Section 5 of the Limitation Act, 1961 had no application to such original proceedings.

Conclusion: The winding up petition was based on a time-barred debt and was not maintainable; the plea for exclusion of time was rejected.

Final Conclusion: The appeal failed because the debt sought to be enforced through winding up was time-barred and the delay could not be cured by the claimed exclusion of time.

Ratio Decidendi: A winding up petition under Section 433(e) of the Companies Act, 1956 cannot be used to recover a debt that is barred by limitation, and exclusion of time under the Limitation Act is unavailable unless the claimed period is shown to have been prosecuted bona fide and within the governing limitation rules.

---