V. RAMASWAMI J.


Company Application No. 1060 of 1984 in Company Petition No. 13 of 1980 was filed by the official liquidator for a direction to the respondent to pay a sum of Rs. 504 towards the amount due with interest of Rs. 133.50, totalling in all Rs. 637.50, with subsequent interest till the date of payment. The amount was due to the company in liquidation in respect of labour charges for certain work done by the company for the respondent. The invoice issued by the company for the said labour charges is dated January 8, 1979. Company Petition No. 13 of 1980 was filed on March 5, 1980, for winding-up Messrs. Radel Services P. Ltd. and, by an order dated July 25, 1980, it was ordered to be wound up and, by virtue of section 449 of the Companies Act, 1956, the official liquidator attached to this court became the official liquidator of the company. Company Application No. 1060 of 1984 was filed on December 4, 1984. Though the respondent did not deny the claim, it claimed a set-off to the extent of a sum of Rs. 653 due to it from the company in liquidation as per the bill dated November 22, 1971. The respondent also claimed that the application filed by the liquidator is barred by limitation. The counter-claim put forward by the respondent was found to be out of time. The learned single judge who heard the application felt that the questions raised in the application need to be considered by a larger Bench, and, accordingly, he referred the following two questions for decision : (1) Whether the claim by or against the company in liquidation, which is ordinarily enforceable by means of a suit, has to be initiated before the company court by means of a suit under clause (a) of sub-section (2) of section 446 of the Companies Act, or by means of an application under clause (b) of the said sub-section ? and(2) What is the article of the Limitation Act that is applicable if the claim is held to be enforceable by means of an application ?


The contention of learned counsel for the liquidator was that the liquidator is entitled to file the application on behalf of the company in liquidation under section 446(2) for enforcement of a claim before the court winding-up the company, that such an application is governed by article 137 of the Limitation Act, 1963, and that the period of three years provided under that article will have to be calculated from the date of the winding-up order, when the right to apply could be stated to have arisen to the liquidator. He also pleaded that in calculating the period of three years, the liquidator is also entitled to the exclusion of the aggregate of the two periods referred to in section 458A of the Companies Act.


The invoice issued by the company, as already stated, for the labour charges is dated January 8, 1979. Ordinarily, for the piece of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment, the period of limitation prescribed under article 18 of the Schedule to the Limitation Act of 1963, is three years from when the work is done. If a regular suit is to be filed in a civil court, therefore, it shall have to be filed on or before January 8, 1982. Under section 458A of the Companies Act, the period from the commencement of the winding-up of the company to the date on which the winding-up order was made and the further period of one year immediately following the date of the winding-up order shall have to be excluded. In this case, therefore, the period from March 5, 1980, to July 25, 1980, and a further period of one year will have to be excluded. The aggregate of these two periods comes to 1 year 4 months and 22 days. Excluding this period, the claim by the company could have been filed on or before May 30, 1983. But, Company Application No. 1060 of 1984 was filed only on December 4, 1984. As per the contention of learned counsel for the official liquidator, the application filed by him is governed by article 137 of the Schedule to the Limitation Act, 1963, which is the residuary article relating to applications prescribing a period of three years from "when the right to apply accrues". According to learned counsel, the right to file the application accrued to the liquidator only on July 25, 1980, and, in calculating the period of three years from that date, 1 year, 4 months and 22 days, referred to above, should be excluded and, if it is so excluded, the application could be filed on or before December 17, 1984, and this application, filed on December 4, 1984, is in time.We shall first refer to the statutory provisions before we deal with some of the cases cited at the Bar. Section 446 of the Companies Act, 1956, reads as follows :


"Suits stayed on winding-up order.--(1) When a winding-up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose.


(2) The court which is winding-up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of (a) any suit or proceeding by or against the company ;


(b) any claim made by or against the company (including claims by or against any of its branches in India) ;


(c) any application made under section 391 by or in respect of the company ;


(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding-up of the company ;


whether such suit or proceeding has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding-up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960.


(3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding-up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court.


(4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court." *


Sub-section (1) deals with both the commencement of any suit or other proceeding, as also suit and other legal proceeding, pending at the date of the winding-up order. In respect of suits or other legal proceedings pending at the date of the winding-up order, while sub-section (1) prohibits the court from proceeding further with the same except with leave of the court and subject to such terms as the court may impose, sub-section (3) states that they may be transferred to and disposed of by the "court" which is winding-up the company (hereinafter referred to as the company court). Sub-section (2) confers jurisdiction on the company court to entertain or dispose of any suit or proceeding by or against the company or any claim made by or against the company, whether such suit or proceeding has been instituted before or after the order for winding-up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960. At the same time, sub-section (1) permits the commencement of any suit or other legal proceeding though with leave of the company court and subject to such terms as the company court may impose. Thus, both with respect to the commencement of any suit or other legal proceedings, as also the continuing of all the pending suits or other legal proceedings, the civil court's jurisdiction is not excluded, but leave of the company court is required to commence or proceed further with pending matters. At the same time, concurrent jurisdiction is vested in the company court to entertain or to dispose of any suit or other legal proceeding which has already been instituted, on being transferred to it under sub-section (3).


The Code of Civil Procedure contemplates suits and original petitions as the broad division of legal proceedings. An original petition is defined as meaning a petition whereby any proceeding other than a suit is instituted in a court. Though an application is defined in the Civil Rules of Practice, as including an execution application, execution petition and interlocutory application, the words, "applications" and "petitions" convey the same meaning. A suit is instituted by the presentation of a plaint or in such other manner as may be prescribed. Though original petitions are not considered as plaints, the cause-title and other details and particulars which they have to contain are similar to those in the plaints and these petitions are also required to be heard and determined in the same manner as original suits. The question for consideration in this case is, as to in what matters suits have to be instituted before the company court and in what matters mere applications could be filed. The learned single judge, in his referring order, his stated that claims which are ordinarily enforceable by means of suits should be initiated before the company court only by instituting suits, that is, by filing plaints, while other claims under the Code of Civil Procedure or any other Act may be made before the company court by means of applications. Otherwise, clause (a) of section 446(2) of the Companies Act becomes futile.In Thangia v. Hanuman Bank Ltd. 1958 (28) CC 270 (Mad), a case arising under the Banking Companies Act, a learned judge of this court observed:


"The term 'claim' is a word of very extensive signification embracing every species of legal demand. It is one of the largest words of law and includes 'demand' and 'debt'. The word 'claim' has been considered a word of art ; and long since was defined by Chief Justice Dyer to be a challenge, by a man, of the property or ownership of a thing which he has not in possession but which is wrongfully detained from him. The term also signifies a demand made of a right or supposed right ; a calling of another to pay something due or supposed to be due, as a claim for wages or services. 'Claim' is sufficiently comprehensive to embrace actions founded on torts as well as actions founded on contract." *


So considered in its widest signification, even a suit for possession based on title or a suit for a declaration of title would be considered as a claim suit. But, we are of the view that in the context in which "claim" is used in clause (b) in section 446(2), it will have to be understood in not such wide and extensive signification. Sub-section (2), in the present form, was substituted by the Companies (Amendment) Act, 1960, for the old sub-section, which ran as follows :


"The court which is winding-up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain or dispose of any suit or proceeding by or against the company." *


Clause (b) was new. If the word "claim" will comprehend all types as are mentioned above, clause (a) itself may not be necessary. If relief in respect of all "claims" in its widest sense is to be only by a suit, then clause (b) is unnecessary. In our opinion, the claims referred to in clause (b) are in the nature of actionable money claims or debts due and owing other than mortgage debts or debts secured by pledge of movables or recovery of money or those matters which are, under the specific provisions in the Act, to be summarily dealt with, and not other types of claims by or against the company. Section 456 refers to the liquidator taking into custody or under his control all the property, effects and actionable claims to which the company is or appears to be entitled. Section 457 enables the liquidator, with the sanction of the court, to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and on behalf of the company. Section 468 confers power on the court to require any contributory and any trustee, receiver, banker, agent or other officer of the company to pay or deliver forthwith or within such time as the court directs, to the liquidator any money, property, books or papers in his custody or under his control to which the company is prima facie entitled. Under section, 469, the court also could direct any contributory to pay any money due to the company. Under section 477, the court can summon any person who is known or suspected to be indebted to the company. And under section 528, all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company. These are some of the provisions which clearly show that the words, "any claim made by or against the company" under clause (b) generally refer to all debts or money claims, and are not in respect of claims to property or title relating to property. This is something in the nature of an actionable claim as defined in section 3 of the Transfer of Property Act. It may be pointed out that "actionable claim" is defined in that provision as meaning a claim to any debt or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil court recognises as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent, but does not include a debt secured by a mortgage of immovable property or by hypothecation or pledge of movable property. In respect of such claims, the very purpose of amendment of section 446(2)(b) by substitution of that clause is to enable the company in liquidation to file an application and get the relief, and not to resort to a suit or other legal proceeding as contemplated under the Code of Civil Procedure or any other law for the time being in force. There could be no doubt that even without clause (b), a claim made by or against the company could be in the form of a suit or proceeding as contemplated in clause (a). If a special additional right to claim the amount by way of an application was not intended, there was no need to bring in, by an amendment, clause (b) to the sub-section. The report of the Companies Act Amendment Committee, with reference to the need for a provision like clause (b), has stated :

"Suits and proceedings by or against the company.--A provision that the winding-up court should have full power to decide all claims made by or against the company in liquidation and all questions of priorities and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of the winding-up of the company, would speed up the winding-up proceedings. There is no danger of the provision being abused."


In the Statement of Objects and Reasons, it is stated :


" Clause 161.--The amendment would have the effect of empowering the court, as in exercise of insolvency jurisdiction, to decide all claims made by or against the company and other questions whatsoever, so that, the winding-up proceedings might be expedited." *


Thus, in our opinion, the provisions contemplate that in the case of money claims or debts, the normal procedure of filing a suit for recovery of the same need not be resorted to and the official liquidator, at his option, could file a claim application before the company court for recovery of the amount due to the company.


A Full Bench of the Delhi High Court in the decision in Jaimal Singh Makin v. Official Liquidator 1978 (48) CC 419, 1978 AIR(Delhi) 169, has taken a similar view. The ratio of the judgment has been brought out clearly in the headnote, which reads as follows :


"A money claim by the official liquidator of a company in winding-up against any person has not necessarily to be made by a suit ; it can be made by a petition. The right to file a suit under clause (a) or a petition under clause (b) of section 446(2) of the Companies Act, 1956, is an option conferred by the statute and these rights do not militate one against the other." *


Though the provisions of the Banking Companies Act, 1949, are not in pari materia with those of the Companies Act, it is useful to refer to a decision of the Supreme Court in Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd. 1955 AIR(SC) 213, 1955 (1) SCR 1098, 1955 (1) MLJ 110, 1955 (25) CC 19, 1955 (61) CrLJ 555. In that case, after the bank went into liquidation, the liquidator served a notice on the tenant of the company terminating his tenancy and calling upon him to vacate the land and to hand over possession. The tenant not having handed over possession, the liquidator filed an application under section 45B of the Banking Companies Act for ejectment of the appellant and obtained a decree against him. There were some intermediate proceedings thereafter, which, it is not necessary to set out.Suffice it to say, the question for consideration before the Supreme Court was as to whether the appropriate proceeding under section 45B was only a suit and not an application. The Supreme Court referred to section 45A of the Banking Companies Act, which provided that notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, no other court, that is a court other than the High Court exercising jurisdiction in the place where the registered office of the banking company concerned is being wound up, shall have jurisdiction to entertain any matter relating to or arising out of the winding-up of the company. Section 45B(1) of the Act provided :


"Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in any other law for the time being in force, the court shall have full power to decide all claims made by or against any banking company...and all questions of priorities and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of the winding-up of the banking company coming within the cognizance of the court." *


The Supreme Court referred to the group of sections in Part III-A of the Banking Companies Act and, after nothing that under the various sections thereof, the liquidator can approach the company court for exercising certain powers in aid of and expediting the process of liquidation and the procedure normally adopted for the purpose is by way of applications, held:


"In the absence of any specific provision in this behalf in the Act itself and in the absence of any rules framed by the High Court concerned under section 45G, the procedure must be taken to be one left to the judgment and discretion of the court, having regard to the nature of the claim and of the questions therein involved." *


Again, after referring to the provisions of section 45B, the Supreme Court further observed :


"It is to be remembered that section 45B is not confined to claims for recovery of money or recovery of property, movable or immovable, but comprehends all sorts of claims which relate to or arise in the course of winding-up. Obviously, the normal proceeding that the section contemplated must be taken to be a summary proceeding by way of application." *


But, what is relevant for our purpose is that section 45B was wide and, therefore, the Supreme Court observed that even with regard to the recovery of property, movable or immovable, summary proceedings by way of applications could be resorted to by the liquidator. Even there, the learned judges have definitely stated that the procedure must be taken to be one left to the judgment and discretion of the court having regard to the nature of the claim and the questions therein involved.


The Full Bench of the Delhi High Court in the decision in Jaimal Singh Makin v. Official Liquidator 1978 (48) CC 419, 1978 AIR(Delhi) 169 , has also taken a similar view and held;


"If the object of bringing sub-clauses (b), (c) and (d) to sub-section (2) of section 446 of the Companies Act was to avoid inevitable delay and expense which would be incidental to the institution and trial of a suit, we do not see any reason why, as a matter of construction, even a money claim by the official liquidator against any person has to be made only by a suit and not by a petition. The fact that a suit is contemplated by clause (a) of sub-section (2) does not go counter to this construction. The right to file a suit by or against the company or a petition making any claim by or against the company is an option conferred by the statute. These options do not militate against each other." *


It is true that the provision of section 446(2) has been amended with the object and purpose of avoiding delay and expenses and to enable the liquidator to file an application in the company court itself and to seek relief in respect of claims by or against the company. But, as we have already stated, claims in this respect should be treated as claims for money or actionable claims and even here, an option is given to the liquidator either to resort to the proceeding by filing an application or to file a regular suit.


In a recent decision, a learned single judge of this court in Fabrimats (Madras) P. Ltd., In re,1982 (52) CC 501, has held that though the claim on behalf of a company in liquidation, filed by the official liquidator, is in the form of an application, it is really a plaint and hence such application should contain, as in the case of a plaint, all the materials necessary to sustain the claim as also the particulars regarding the claim being in time, particularly when an extended period of limitation is claimed on behalf of the company. We are in entire agreement with this view of the learned judge.


For the foregoing reasons, we hold that the application filed by the official liquidator is maintainable.


That leads us to the question as to what is the article of the Limitation Act that is applicable to such an application. As observed by the learned judge in his referring order, where a suit is filed before a company court to enforce a claim, there is no difficulty in holding that the article of limitation applicable to such a suit will be the appropriate article in the First Schedule to the Limitation Act, 1963 1933 (3) CC 207, 1933 AIR(PC) 63, 54 All 1067, 1933 (64) MLJ 403, 1978 (9) Ch(D) 595 (PC), the Privy Council had occasion to consider the scope of section 3 of the Indian Limitation Act, 1908

"Notwithstanding anything in the Indian Limitation Act, 1908, or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application in the name and on behalf of a company which is being wound up by the court, the period from the date of commencement of the winding-up of the company to the date on which the winding-up order is made (both inclusive) and a period of one year immediately following the date of the winding-up order shall be excluded." *


It may be seen from this provision that in computing the period of limitation, the time during which the company petition for liquidation was pending, as also a period of one year from the date of the winding-up order will have to be excluded. Therefore, we have to first find out that article of limitation under the Limitation Act applicable to the suit or proceeding and exclude, from the total period provided under that article, the periods contemplated under section 458A, and find out whether, on the date when the application or suit was filed, it was in time. Having regard to the conclusion, which we have already referred to, that concurrent jurisdiction has been conferred both on the civil court as also on the company court, and the option given to the liquidator to make the claim by way of an application or a suit in respect of money claims, and the need to treat this as a suit, though in form an application, in view of the special provisions in the Companies Act, that when a claim is made it has to be decided whether it could have formed a claim in a regular suit and, if that is so, the limitation applicable to that proceeding will have to be applied. If such a claim could not be the subject-matter of a suit, but could be claimed by way of an application only, then the corresponding article applicable to such an application should be determined. In either case, in computing the period of limitation, the two periods referred to in section 458A will have to be excluded. The Privy Council's decision referred to above related to a case arising under the Indian Companies Act, 1913, which did not have provisions like section 446(2) and section 458A and, therefore, though for the purpose of understanding certain words like "money due", " suit instituted ", etc., that decision could be referred to as an authority, it could not be considered to be an authority for holding that an application filed under section 446(2)(b) could not be treated as in the nature of a plaint or that the limitation applicable thereto is the limitation provided under article 137, and not any other article. The Full Bench decision of the Delhi High Court in Jaimal Singh Makin v. Official Liquidator 1978 (48) CC 419, 1978 AIR(Delhi) 169, considered the question as to whether the provision of section 446(2) which applies to any claim could be applied to claims which were already barred by time on the date when the application is so filed under section 446(2)(b), and held that the expression "any claim" in clause (b) of section 446(2) means any claim enforceable at law and, since the right to avail of the remedy provided under clause (b) of section 446(2) arises only after the passing of the winding-up order, the appropriate date to be seen for the purpose of determining whether the claim was enforceable at law or not, is the date of the winding-up order. With great respect to the learned judges of the Delhi High Court, we are unable to agree with this view. Neither section 446(2) nor section 458A relates to any determination of the enforceability of the claim or the dates on which it shall be enforceable. Section 446(2)(b) only enables the liquidator to make the claim by way of an application in the company court. The question whether the claim is enforceable or not, is to be determined with reference to the provisions in the Limitation Act, and that could be decided only with reference to the cause of action and the date on which the suit or application is filed. As already stated, section 458A is only a computation provision for the purpose of limitation. Section 446 confers jurisdiction on the company court and enables the liquidator to file a suit or an application before the company court in respect of a money claim. No claim is wiped out except by payment and discharge. Only the enforceability of that claim for recovery may be barred. Whether the claim is barred or not, is only a question of limitation.Therefore, whether the claim was barred or was enforceable has to be determined with reference to the cause of action arising and the date of the filing only and all the other provisions will only enable the computation of the period. We are, therefore, of the view that though the application is filed in exercise of the option provided to the l

iquidator, if the claim has to be considered as in the nature of a suit, the provisions in the Limitation Act for such suits only would govern the case, and not article 137. Again, we have to make it clear that in each case, the application of the liquidator will have to be considered with reference to the nature of the claim and not the article applicable in the Limitation Act and then only the computation could be done in order to find out whether the claim was in time or not. Two other decisions cited at the Bar may now be noticed and they are, a decision of the Delhi High Court in Liberty Finance P. Ltd., In re, 1979 (49) CC 287, and a decision of the Karnataka High Court in Union Trading and Chit Funds v. S. H. Lahatti 1982 (52) CC 340, 1981 (2) KLJ 144, 1981 (2) Kar(LJ) 144. Each of these decisions is by a single judge, and both have followed a Full Bench decision of the Delhi High Court in Faridabad Cold Storage and Allied Industry v. Ammonia Supplies Corporation P. Ltd. 1978 (48) CC 432, 1978 AIR(Del) 158, 1978 AIR(Delhi) 158, 1978 TaxLR 1893, which decision, in turn, had referred to the Full Bench decision of the Delhi High Court in Jaimal Singh Makin v. Official Liquidator 1978 (48) CC 419, 1978 AIR(Delhi) 169 , and, therefore, those two decisions need not be discussed. In the result, therefore, we are of the view that article 137 of the Limitation Act is not the article applicable in all cases, but the relevant article will have to be determined with reference to the nature of the claim made by the official liquidator, the provision of law under which it is claimed and not with reference to the form of proceeding which he has opted. When an application is filed instead of a plaint, the said application which has to be treated as a suit will have to be governed by the article of the Limitation Act applicable to suits of that nature. If the claim could have formed the subject-matter of a normal application in a regular court or if the application is filed under any specific provision of the Companies Act, then the corresponding article in the Limitation Act will have to be applied, and if no other specific article is applicable, the residuary article 137 would have to be applied. In this case, since the subject-matter of the claim could have been the subject-matter of a suit, the relevant article applicable is article 18 under which a period of three years is provided and it is to be calculated with reference to the "date when the work is done". As already stated, the work was done on January 8, 1979. The application was filed on December 4, 1984. One year, four months and twenty-two days will have to be excluded. That means, a period of 4 years, 4 months and 22 days is available and even if that period is taken into account, the application should have been filed on May 30, 1983. The application filed on December 4, 1984, was clearly, therefore, out of time. The company application is accordingly dismissed. However, the costs of the application will come out of the estate. Counsel's fee is fixed at Rs. 1, 000.