KARNATAKA STEEL & WIRE PRODUCTS AND ORS. versus KOHINOOR ROLLING SHUTTERS & ENG. WORKS AND ORS.

Citation: [2002] SUPP. 4 S.C.R. 51 · Decided: 12-11-2002 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Dismissed

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Judgment (excerpt)

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KARNATAKA STEEL & WIRE PRODUCTS AND ORS.
A
V .
KOHINOOR ROLLING SHUTTERS & ENG. WORKS AND ORS.
NOVEMBER 12, 2002
[G.B. PATTANAIK, CJ. AND S.B. SINHA, JJ.]
B
Companies Act, 1956-Section 458A-limitation period-Computation
of-For a suit or application by a company being wound up by the Court~
Held, a claim, legally eriforceable on the date on which the application for C
winding up is made, could be filed by the official liquidator by taking benefit
of Section 458A-But the section would not mean that even a barred claim
which was not enforceable on the date qf the winding up, would stand revived,
once a winding up application is filed and order is n1ade by virtue of Section
458A-limitation Act, 1908-Article 137.
The issue before the Court was whether on account of Section 458A
of the Companies Act, 1956, the period of limitation for filing any suit or
application gets extended, and if so, whether a claim which was barred
on the date the application for winding up was filed, stands revived on
account of an order of the Court in the winding up proceedings.
D
E
High Court had held that the provisions contained in Section 458A
of the Companies Act, does not confer a fresh cause of action and,
therefore, if the time for the claim is already barred under the relevant
provisions of the Limitation Act, 1908 then the appointment of official
liquidator or an application being filed for winding up of the company,
would not revive the same. Hence the present appeals.
F
Dismissing the appeals, the Court
HELD: On a plain reading of the provisions contained in Section
458A of the Companies Act, 1956 it is crystal clear that it merely excludes G
the period, during which a company was being wound up by the Court
from date of the commencement of the winding up till the order of winding
up is made and an additional period of one year immediately following
the date of the winding up. In other words, in respect of a legally
enforceable claim, which claim could have been made by the company on
51
H
52
SUPREME COURT REPORTS (2002] SUPP. 4 S.C.R.
A the date on which the application for winding up is made, could be filed
by the official liquidator by taking the benefit of Section 458A of the
Companies Act and getting the period of four years to be excluded from
the period of three years, as provided under Article 137 of the Limitation
Act, 1908. The Legislature, by way of an amendment, brought into force
B the provisions of Section 458A, so that an official liquidator, who is
supposed to be in custody of the assets and liability of the company, would
be able to file a claim on behalf of the company, which was legally
enforceable on the date of the winding up, after excluding the period,
indicating under section 458A of the Company Act, so that the company
or its shareholders will not suffer any loss. But by no stretch of
C imaginatiOn, the said provisions contained in section 458A can be
construed to mean that even a barred claim which was not enforceable
on the date of the winding up, would stand revived, once a winding up
application is filed and order is made by virtue of Section 458A of the
Companies Act. (55-F; 56-A]
D
Official Liquidator, Radel Service Pvt. Ltd. v. Southern Services P. Ltd.
63 Company Cases 749; Faridabad Cold Storage & Allied Industry v. Official
Liquidator of Ammonia Supplies Corpn. (P) Ltd., AIR (1978) Delhi 158; R.C.
Abrol. & Co. Pvt. Ltd. v. A.R. Chaddha & Co., AIR (1978) Delhi 167; K.P.
Ulahannan and Ors. v. The Wandoor Jupiter Chits (P) Ltd., AIR (1989)
E Kerala 41; Liberty Finance Pvt. Ltd. (In liquidation) v. Pandit Radha Mohan
and Ors., (1979) Co. cases Vol. 49-287 and Maruti Limited (In Liquidation)
and Anr. v. Parry and Company Ltd., (1989) Company cases Vol. 66-309,
referred to.
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos. 9464-
p
9467 of 1995.
From the Judgment and Order dated 4.1.1993 of the High Court
Karnataka in Company, Appln. Nos. 133, 425, 343 and 466/87.
Dilip Goswami, Arvind Biswal and Ms. Revathy Raghavan, for the
G Appellants.
Ms. Arpita Mahajan, Saurav Agarwal. Ms. Nina Gupta, Shalini Rai,
Lakshya Yadav and Ms. Bina Gupta for the Respondent.
H
The Judgment of the Court was delivered by
...
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KARNAT AKA STEEL & WIRE PRODUCTS 1·. KOHINOOR ROLLING SHUTTERS& ENG WORKS [J'ATT~NA~K,C' J J 53
PATT ANAIK, CJI. These appeals, directed against the Full· Bench A
decision of the Karnataka High Court, raise a common quest

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