Special limitation under company law governs the whole proceeding, barring a separate Limitation Act defence in liquidator applications.

Section 235(1) of the Indian Companies Act, 1913 was construed as imposing a special limitation that governs the proceeding under the section as a whole, not merely the time for filing the liquidator's application. Reading the provision against its legislative history, including the deletion of the earlier sub-section applying the Limitation Act and the insertion of limitation words in 1936, the Madras HC treated the amendment as a deliberate response to conflicting authority. On that construction, a respondent could not raise a separate limitation defence based on the Limitation Act in proceedings under section 235, and the plea of limitation was unavailable to defeat the liquidator's application.

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Issues: Whether the words of limitation in section 235(1) of the Indian Companies Act, 1913 merely fix the period for presenting the liquidator's application or whether they govern all proceedings under the section so as to exclude a separate plea of limitation based on the Limitation Act.

Analysis: Section 235 was examined in the light of its legislative history. The section originally followed the English model, then in the 1913 Act sub-section (3) made the Limitation Act applicable as if the application were a suit, and in 1936 that sub-section was deleted while limitation words were inserted in sub-section (1). The earlier Indian decisions had treated applications under the section as not barred by limitation, but the later amendment was taken as a deliberate legislative response to conflicting authority. On that construction, the special limitation in section 235(1) was intended to govern the proceeding as a whole and not merely the filing of the application. The Court therefore rejected the view that a respondent could still rely on the limitation defence that would have been available in a separate suit.

Conclusion: The plea of limitation was not available to the respondents in proceedings under section 235, and the preliminary objection failed in favour of the liquidator.

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