Limitation and retrospective revival of claims under company law: later enactment could not validate a time-barred petition.

A proceeding is generally governed by the limitation law in force when it is instituted, and a later enactment will not revive a claim already barred unless retrospective effect is shown by express words or necessary intendment. On that basis, a petition filed under the Indian Companies Act, 1913 could not be validated by section 543 of the Companies Act, 1956, because the later Act did not apply to pre-commencement winding-up proceedings. The discretionary power under section 235 of the 1913 Act also could not override an admitted limitation bar. Limitation ran from the wrongful credit or retainer itself, not from the company's later discovery of the mistake, so the petition remained time-barred.

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Issues: (i) Whether the petition under sections 216 and 235 of the Indian Companies Act, 1913 was barred by limitation and could be saved by section 543 of the Companies Act, 1956; (ii) whether section 235 of the Indian Companies Act, 1913 empowered the Court to entertain a time-barred application in its discretion; (iii) whether limitation commenced from the date of the company's knowledge of the mistaken credit entries.

Issue (i): Whether the petition under sections 216 and 235 of the Indian Companies Act, 1913 was barred by limitation and could be saved by section 543 of the Companies Act, 1956.

Analysis: The governing rule is that a proceeding is ordinarily controlled by the limitation law in force when it is instituted, and a barred claim is not revived unless the later enactment clearly gives retrospective effect by express words or necessary intendment. The Companies Act, 1956 itself excluded pre-commencement winding-up proceedings by section 647, so section 543 could not be applied to revive or validate a petition filed in 1953 under the 1913 Act.

Conclusion: The petition could not be saved by section 543 of the Companies Act, 1956 and remained time-barred.

Issue (ii): Whether section 235 of the Indian Companies Act, 1913 empowered the Court to entertain a time-barred application in its discretion.

Analysis: The discretion under section 235 relates to whether relief should be granted in a proper case, but it does not authorise the Court to ignore an admitted bar of limitation. Discretion cannot be used to override the express legal effect of limitation.

Conclusion: Section 235 did not permit the Court to entertain the petition after limitation had expired.

Issue (iii): Whether limitation commenced from the date of the company's knowledge of the mistaken credit entries.

Analysis: Section 24 of the Limitation Act applies only to suits for compensation where the cause of action arises upon actual injury, and its principle did not govern the present claim. The material event for limitation was the wrongful credit or retainer itself, not the later discovery of the mistake.

Conclusion: Limitation did not begin from the date of knowledge and the petition was out of time.

Final Conclusion: The challenge to the dismissal order failed because the application was time-barred, the later Companies Act did not revive it, and no discretionary or discovery-based ground displaced the bar.

Ratio Decidendi: A later enactment extending limitation does not revive a claim already barred unless retrospective operation is clearly provided, and discretionary power cannot be exercised to admit a petition barred by limitation.

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