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Issues: (i) Whether the liquidator's application under section 446 of the Companies Act, 1956 was within limitation. (ii) Whether proceedings and liability could be fastened on the ex-director under section 446 of the Companies Act, 1956 for the company's truck or its equivalent value.
Issue (i): Whether the liquidator's application under section 446 of the Companies Act, 1956 was within limitation.
Analysis: No specific article governed an application under section 446, so the residuary period under article 137 of the Limitation Act, 1963 applied. The right to apply accrued when there was a clear refusal to return the vehicle or to liability. On the facts found, such refusal emerged in 1972, and the application filed in 1973 was within three years. The Court found it unnecessary to rely on section 10 or article 70 of the Limitation Act, 1963, or on section 458A of the Companies Act, 1956.
Conclusion: The application under section 446 was within limitation.
Issue (ii): Whether proceedings and liability could be fastened on the ex-director under section 446 of the Companies Act, 1956 for the company's truck or its equivalent value.
Analysis: Section 446 was held to be wide enough to cover claims against persons holding company assets without right, including a director. The remedy under section 446 was not excluded merely because section 543 could also have been invoked in a case of fraudulent conduct. Since the truck was handed over under the appellant's authority, and neither the truck nor its proceeds were returned, the appellant remained liable to account for the company's asset along with the second respondent.
Conclusion: Proceedings under section 446 were maintainable against the ex-director and his liability was rightly fastened.
Final Conclusion: The appeal failed, and the order directing recovery from the second respondent first and from the appellant for any balance was upheld.
Ratio Decidendi: Where no special limitation period is provided for a company-court claim under section 446 of the Companies Act, 1956, article 137 of the Limitation Act, 1963 applies and time runs from the accrual of a clear right to apply, and section 446 is broad enough to proceed against an ex-director who continues to be accountable for company assets handed over under his authority.
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