Limitation in Liquidation: compute limitation from the winding up order; only written, signed acknowledgments extend it.

Whether a manager's appointment was bona fide: the nominee's appointment during an interregnum was held imprudent and made to frustrate the controller's authority, so the appointee is not entitled to claimed remuneration. Limitation for liquidation claims: limitation runs from the date of the winding up order, not presentation of the petition, and alleged acknowledgments extend limitation only if in writing and signed by the debtor or a duly authorised agent. Balance sheets extend limitation only if properly authenticated or proved signed by an authorised signatory. A previously admitted claim is reduced to the portion supported by a valid written acknowledgment; the balance is time barred.

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Issues: (i) Whether the appointment of a general manager by a nominated chairman was bona fide and whether the appointee was entitled to salary and other claimed emoluments; (ii) Whether limitation for creditors' claims in liquidation is computed from the date of presentation of the winding-up petition or from the date of the winding-up order, and whether alleged acknowledgments (including balance-sheets and letters) extend limitation under Section 19 of the Limitation Act; (iii) Whether a previously admitted claim should be expunged or reduced on the ground of limitation and whether a balance-sheet constitutes a valid acknowledgment saving part of the claim.

Issue (i): Whether the appointment was bona fide and whether the appointee can claim the remuneration asserted.

Analysis: The nominated chairman had authority, under the partnership deed and the articles, to be successor and to act for the managing agents and hence to make appointments; however, the appointment was made in an interregnum shortly before an authorised controller was reinstated and while a winding-up petition was pending. There was no evidence that the appointee ever assumed or exercised the functions of general manager or that the authorised controller recognized or directed him to act. The circumstances show the appointment was imprudent and intended to frustrate the controller's authority rather than to further bona fide management needs.

Conclusion: The appointment was not bona fide in effect and the appointee is not entitled to the claimed remuneration.

Issue (ii): Whether limitation for claims in liquidation runs from presentation of the winding-up petition or from the date of the winding-up order, and whether acknowledgments under Section 19 extend limitation.

Analysis: Statutory provisions cited show winding-up is deemed to commence at presentation of the petition but do not suspend limitation from that date. The Companies Act provisions governing stay of proceedings and related sections indicate the relevant date for limitation in compulsory winding-up is the date of the winding-up order. An acknowledgment relied upon to extend limitation must satisfy Section 19: made before expiration of the period, in writing, and signed by the debtor or a duly authorised agent. Balance-sheets must be authenticated in accordance with Companies Act requirements to operate as acknowledgments; a signature by a manager requires proof of authorisation to sign. Oral or inadequately proved signatures and uncorroborated lost-document proofs are insufficient to invoke Section 19.

Conclusion: Limitation is to be computed from the date of the winding-up order; alleged acknowledgments (letters, unsigned account-books, or balance-sheets not properly authenticated or proved to be signed by a duly authorised agent) do not extend limitation under Section 19.

Issue (iii): Whether a previously admitted claim should be reduced on limitation grounds and what portion, if any, survives by reason of a valid acknowledgment.

Analysis: Where a balance-sheet was proved to have been signed by an authorised person within the limitation period, that acknowledged portion survives. In the particular claim before the Court one balance-sheet (signed and authenticated as agreed) supported an acknowledged portion; the remainder was barred by limitation.

Conclusion: The previously allowed claim is to be reduced; the claimant is entitled only to the portion established by the valid acknowledgment (Rs. 5,665/-) with proportionate costs.

Final Conclusion: The appeals are finally disposed as follows - appeal on the appointment and salary claim dismissed (no remuneration due); appeal contesting limitation on commercial claims dismissed insofar as reliance on inadequately proved acknowledgments fails; the expunction appeal allowed in part permitting recovery only of the sum supported by a properly authenticated acknowledgment.

Ratio Decidendi: For liquidation claims the period of limitation is computed from the date of the winding-up order, and only a written acknowledgment signed by the debtor or a duly authorised agent in conformity with Section 19 of the Limitation Act will revive or extend the limitation period; balance-sheets operate as such acknowledgments only if authenticated in accordance with Companies Act requirements or if signed by a person proved to be duly authorised to acknowledge the debt.

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