Winding-up claims against an agent may avoid limitation and be proved by account books plus corroborating testimony.

In winding-up proceedings, a company's claim against its agent was held not to be barred by limitation where section 468 of the Companies Act, 1956 applied and there was no reliable proof of earlier termination of the agency or prior demand and refusal. Section 543 was found inapplicable because the respondent was only an agent. Liability was also proved because entries in regularly kept books of account, though insufficient by themselves under section 34 of the Evidence Act, were corroborated by the managing director's direct testimony that the agent had collected money and failed to remit it. The claim succeeded with costs.

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Issues: (i) Whether the company's claim against its agent was barred by limitation under the law governing winding-up proceedings and principal-agent claims. (ii) Whether the books of account, together with the managing director's testimony, were sufficient to establish the respondent's liability.

Issue (i): Whether the company's claim against its agent was barred by limitation under the law governing winding-up proceedings and principal-agent claims.

Analysis: Section 468 of the Companies Act, 1956 empowers the court, after a winding-up order, to require an agent or other person holding the company's money or property to deliver it to the liquidator at any time, and that power is available in voluntary liquidation through section 518. The claim could not be defeated by article 89 of the Indian Limitation Act, 1908 or article 3 of the Limitation Act, 1963, because there was no reliable proof that the agency had ended earlier or that a demand and refusal had occurred before the 1971 notice. Section 543 of the Companies Act, 1956 was also inapplicable because the respondent was only an agent and did not fall within the categories covered by that provision.

Conclusion: The claim was not barred by limitation.

Issue (ii): Whether the books of account, together with the managing director's testimony, were sufficient to establish the respondent's liability.

Analysis: Under section 34 of the Indian Evidence Act, entries in regularly kept books of account are relevant but cannot by themselves fasten liability. Here, the account books were supported by the managing director's direct testimony that the respondent had collected money as agent and failed to remit the amount due. The combined effect of the oral evidence and the account entries was sufficient to establish the liability claimed.

Conclusion: The respondent's liability was proved.

Final Conclusion: The appeal succeeded and the petition was granted, resulting in an order directing payment of the amount found due with costs throughout.

Ratio Decidendi: In winding-up proceedings, section 468 of the Companies Act, 1956 is not subject to a general limitation bar where the claim falls within its scope, and liability under section 34 of the Indian Evidence Act may be established by entries in regularly kept books of account corroborated by reliable oral testimony.

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