Limitation for misfeasance claims under company liquidation follows the suit-based article, without any fresh start from winding-up.

Section 235 of the Indian Companies Act, 1913 is treated as a special procedural provision and does not create a fresh substantive right or a new starting point of limitation for misfeasance applications. Limitation continues to be governed as if the claim were brought as a regular suit, so the applicable article depends on the nature of the underlying relief and liability; where no specific article fits, Article 120 applies. The winding-up order does not automatically postpone limitation or confer a universal fresh start. A dissenting view accepted that limitation could be pleaded, but considered Article 120 applicable with time running from the winding-up order.

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Issues: Whether an application under Section 235 of the Indian Companies Act, 1913 for misfeasance is governed by a fresh starting point of limitation from the liquidation proceedings, or whether limitation continues to run from the date which would govern a regular suit for the same relief, and which article of the Indian Limitation Act, 1908 applies.

Analysis: The majority held that Section 235 is a special procedural provision which does not create a new substantive right in the liquidator, creditor, or contributory. The section preserves the defendant's limitation defence by making the Indian Limitation Act, 1908 applicable as if the application were a suit. The winding-up order does not itself create a fresh cause of action or a universal fresh start for limitation. The applicable limitation article depends on the nature of the relief and the underlying liability that would govern a regular suit; where no special article fits, Article 120 applies. The majority rejected the view that liquidation proceedings automatically postpone limitation or that every applicant gets a new and personal starting point.

Conclusion: The answer was that the winding-up order does not give a fresh start for limitation, and the proper article of limitation is the one that would govern a suit for the same relief.

Dissenting Opinion: Mukerji, J. agreed that the respondent could plead limitation, but held that under Section 235 the application is to be treated as if filed by the applicant and that Article 120 applies. He further held that the starting point is the date of the winding-up order, not the appointment of the liquidator.

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