OFFICIAL LIQUIDATOR Vs. T J SWAMY

JUDGEMENT

(1.) This is an application of the official liquidator under sub-section (1) of section 543 of the Companies Act, 1956 (hereinafter referred to as "the Act"), made by summons in Form No. 121 under rule 260 of the Companies (Court) Rules, 1959. The respondents were, during the material and relevant times, directors and officers of Sri Jaya Investments Private Limited, the company in liquidation. The winding-up order in respect of the company under liquidation was made on 28/08/1981, in Company Petition No. 5 of 1981 which was presented on 20/07/1981. The present application was filed on 5/10/1987.

(2.) Notice was ordered in the application. Respondents Nos. 4 and 6 died. Respondents Nos. 1, 2, 5 and 7 to 10 appeared through their counsel. The third respondent was set ex parte on 29/07/1988. Counters were filed for respondents Nos. 1,2, 5 and 7 to 10.

(3.) In the counter dated 15/02/1988, filed by the second respondent, the contention raised is that the present application is barred by limitation as it is beyond the time prescribed in sub-section (2) of section 543 of the Act. It is stated that as the winding-up order was passed on 28/08/1981, and the official liquidator was appointed on the same day for the company in liquidation and the acts of misfeasance or breach of trust, if any, on the part of the respondents were prior to 28/08/1981, the present application is barred by time as it was filed after five years. Respondents Nos. 1, 5 and 8 to 10 filed separate counter-affidavits dated 28/04/1988, adopting the second respondent's counter-affidavit and contending that the present application is barred by time. The seventh respondent filed a separate counter-affidavit dated 16/06/1988, wherein he also contends that the present application is barred by time. In this order dated 29/04/1988, B. P. Jeevan Reddy J. required counsel for the official liquidator to satisfy this court as to how the application filed under section 543 was in time. The official liquidator filed his report on 17/06/1988, to satisfy the court as to how the application was in time. According to the said report, section 458A of the Act is attracted to the present application and, under the said section, the period from the date of commencement of the winding up to the date of the winding-up order (both inclusive) and one year immediately following the date of winding-up order are to be excluded for the purpose of computation of limitation and, therefore, if the said periods are excluded, the application will be within the five-year time prescribed by sub-section (2) of section 543. After the said report was filed by the official liquidator, the second respondent herein filed additional counter-affidavits dated 15/11/1989, on behalf of himself and respondents Nos. 1, 5, 8, 9 and 10 wherein he contends that section 458A is not applicable to the present application because section 543 itself specifically stipulated the period of limitation.