TaxTMI 
TaxTMI 
2008 (7) TMI 574
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....to in section 543(2) of the Companies Act, 1956 ("Companies Act", for short) expired on 1-12-1988. As stated above, misfeasance proceedings were filed by the O.L. on 1-12-1989. Therefore, contention has been raised by the appellant that the said proceedings filed on 1-12-1989 stood filed beyond limitation as prescribed under section 543(2) of the said Act. Under the said section the period is five years from the date of the order for winding up or of the first appointment of the Liquidator in the winding up. 5. Mr. Shyam Divan, learned senior counsel appearing on behalf of the appellant, submitted at the outset that since limitation is specifically provided for of five years under section 543(2) of the said Act, it was not open to the O.L. to rely upon and take resort to general limitation provision contemplated by section 458A of the said Act. He further contended that the non obstante clause in section 458A refers to laws other than the Companies Act and consequently section 543(1) and (2) constituted a separate Code by itself and, therefore, the said section was not required to be read with section 458A. Alternatively, he contended that even if one is to read harmoniously sec....
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....tion 543(2) as a stand-alone provision applicable to only misfeasance proceedings whereas section 458A in the matter of computation of limitation would apply to all other non-misfeasance proceedings. Therefore, according to learned counsel, the Parliament did not intend to override vide section 458A any other provisions of the Companies Act. On the contrary, according to learned counsel, the Parliament vide section 458A intended to override potential conflict between the Companies Act and the Limitation Act on one hand and any other law for the time being in force. 7. Mr. Puneet Jain, learned counsel appearing on behalf of the Official Liquidator, submitted that section 458A of the Companies Act supplements Part III of the Limitation Act. He submitted that section 458A does not extend the period of limitation of five years mentioned in section 543(2). Learned counsel submitted that on the contrary section 458A only provides for exclusion in the matter of computation of a period of five years limitation under section 543(2). Learned counsel submitted as and by way of illustration that if a contributor moves an application in his own name and not in the name of the company and on ....
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....the time specified in that behalf in sub-section (2), examine into the conduct of the person, director, managing agent, secretaries and treasurers, manager, liquidator or officer aforesaid, and compel him to repair or restore the money or property or any part 'thereof respectively, with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust, as the Court thinks just. (2) An application under sub-section (1) shall be made within five years from the date of the order for winding up, or of the first appointment of the liquidator in the winding up, or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer." 9. On reading the provisions of section 458A and section 543(2) of the Limitation Act, we find that there is a clear dichotomy between the concept of the "period of limitation" on one hand and the concept of "computation of that period". Section 543(2) limits the time after which misfeasance or breach of trust proceedings, retainer proceedings and misapplication proceedings becomes ti....
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.... 12 to 24 for computation of the period of limitation. Similarly, section 458A provides for an additional circumstance which is not there in the Limitation Act which is required to be taken into account as an item of exclusion in the matter of computation of the period of Limitation of five years prescribed by section 543(2). That circumstance is a period spent between the date of commencement of winding up of the company and the date on which the winding up order is passed plus one year therefrom. If this period of limitation is to stand excluded it is only by virtue of section 458A which circumstance is not contemplated by sections 12 to 24 of the Limitation Act. Just as a different period of limitation is prescribed for misfeasance proceedings vide section 543(2) so also vide section 458A a special circumstance is indicated as an item of exclusion of certain time in computing the period of limitation. Therefore, there is no conflict between section 458A and section 543(2) of the Companies Act. If so read, there is no extension of the period of limitation of five years as contended on behalf of the appellant. In our view, section 458A excludes the period between the date of comme....
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....the Court. Therefore, it is sought to be argued that misfeasance proceedings instituted by the O.L. is neither a suit nor an application in the name and on behalf of a company which is being wound up by the Court. We find no merit in this argument. If book-debt is assigned by the company to a bank which fails to file a suit for recovery of money within the time prescribed under the Limitation Act, it would not be open to O.L. to institute the suit under section 458A because in that event the O.L. is said to have filed a suit not on behalf of the company but on behalf of the bank. It is to such cases that section 458A will not apply. In the present case, the O.L. was authorized to take steps to recover assets both financial and other assets by the company court under the winding up order. It is pursuant to that authority that the O.L. has instituted, the misfeasance proceedings for recovery on 1-12-1989. The said proceedings have been initiated in the name of the company and on behalf of the company to be wound up. The name of the applicant, indicated at page No. 27 of the appeal paper book, shows that the O.L. has filed misfeasance proceedings in the name of the company and on beha....