Limitation for misfeasance applications runs from the first liquidator's appointment; a successor cannot revive time or challenge final sanctions.

Section 235 of the Indian Companies Act, 1913 fixed limitation from the first appointment of a liquidator in the winding up, or from the date of misapplication, retainer, misfeasance or breach of trust, whichever period was longer; a successor liquidator could not restart the statutory period. The application was therefore time-barred. Payments made under an unchallenged company court order that had attained finality could not be impeached by the successor official liquidator, so the liquidator lacked locus standi to question the disbursement. On these preliminary objections, the application failed in limine and the substantive merits were not examined.

---

---

Issues: (i) Whether the application under section 235 of the Indian Companies Act, 1913 was barred by limitation, and whether limitation ran from the first appointment of the liquidator or from the appointment of the successor liquidator or the alleged date of misfeasance. (ii) Whether the official liquidator had locus standi to maintain the application in view of the subsisting court order sanctioning the payments in question.

Issue (i): Whether the application under section 235 of the Indian Companies Act, 1913 was barred by limitation, and whether limitation ran from the first appointment of the liquidator or from the appointment of the successor liquidator or the alleged date of misfeasance.

Analysis: Section 235 prescribed a three-year period running from the date of the first appointment of a liquidator in the winding up or from the date of the misapplication, retainer, misfeasance or breach of trust, whichever period was longer. The expression was held to be clear and to fix the terminus a quo at the first appointment of the liquidator in the winding up. The appointment of a later liquidator could not restart limitation. On the applicant's own case, the impugned conduct was also complete, at the latest, more than three years before the application was filed.

Conclusion: The application was barred by limitation and the issue was decided against the applicant.

Issue (ii): Whether the official liquidator had locus standi to maintain the application in view of the subsisting court order sanctioning the payments in question.

Analysis: The payments out of the amount in dispute had been made under the authority of an order of the company judge which had never been challenged and had attained finality. So long as that order stood, the successor official liquidator could not impeach the payments made under it. The court treated the absence of any challenge to the sanctioning order as fatal to the applicant's standing to question the same disbursement.

Conclusion: The official liquidator had no locus standi to present the application and the issue was decided against the applicant.

Final Conclusion: The preliminary objections succeeded, the substantive issue was not gone into, and the application failed in limine.

Ratio Decidendi: For an application under section 235 of the Indian Companies Act, 1913, limitation runs from the first appointment of a liquidator in the winding up, and a successor liquidator cannot revive or extend the statutory period by a fresh appointment.

---