Recovery of Company Funds: liquidator may compel delivery from persons who received funds as company officers, even if application made later, and such claims are not time barred after winding up.
Section 185 permits the liquidator, after a winding up order, to require delivery of money held by persons who received it in their capacity as company officers even if they ceased to be officers before the application; the decisive fact is the recipient's status when the funds were received. An application under section 185 is a summary protective remedy to recover company property and does not attract the ordinary limitation rules applicable to ordinary debt claims; consequently the liquidator's application is not time barred and payment to the official liquidator may be compelled.
Issues: (i) Whether an application under section 185 of the Indian Companies Act is competent against a person who was an officer of the company at the time the money was received though he had ceased to be an officer when the application was made; (ii) Whether the official liquidator's application under section 185 was barred by limitation.
Issue (i): Whether section 185 of the Indian Companies Act permits the court to require delivery of company money held by a person who received it in the capacity of an officer of the company even if he ceased to be an officer before the application was filed.
Analysis: Section 185 empowers the court, after making a winding up order, to require persons including an officer of the company to deliver money in their hands to the official liquidator if the company is prima facie entitled to it. The relevant inquiry is the status of the person at the time the money came into his hands and whether the money was received by him as an officer of the company; it is immaterial that he ceased to be an officer at the time of the application.
Conclusion: Section 185 is competent to be invoked against a person who received company money in his capacity as an officer even though he was no longer an officer when the application was made; decision is against the appellant.
Issue (ii): Whether the liquidator's application under section 185 is barred by any period of limitation.
Analysis: Section 10 of the Limitation Act (suits against trustees for specific purposes) is inapplicable. Section 186 (relating to ordinary debts) and its limitation implications are distinguishable because section 186 contemplates recovery of debts recoverable in ordinary courts. Section 185 provides a summary protective remedy after a winding up order to recover company property held by certain persons, and operates irrespective of when the money was received provided it was received as company money by an officer; therefore no separate period of limitation applies to an application under section 185 that would bar the liquidator once a winding up order has been made.
Conclusion: The application under section 185 was not barred by limitation; decision is against the appellant.
Final Conclusion: The appeal is dismissed and the order for payment to the official liquidator is affirmed.
Ratio Decidendi: An application under section 185 of the Indian Companies Act may be made after a winding up order to require delivery of money received by a person in the capacity of an officer of the company, and such an application is not subject to the ordinary limitation rules applicable to suits for ordinary debts.
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