M/S. Mysore Fruit Products Pvt. Ltd., Vs Official Liquidator of M/S. United Breweries (Holdings) Ltd.

M/S. MYSORE FRUIT PRODUCTS PVT. LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 NO. 17, SANKEY ROAD, BENGALURU - 560 020, REPRESENTED BY ITS DIRECTOR, MRS. D. A. THEJESHWARI

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…APPELLANT

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Digitally signed by VASANTHA KUMARY B K Location: HIGH COURT OF KARNATAKA

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(BY SRI. A. MURALI, ADVOCATE A/W SRI. ARJUN P.K, AVOCATE)

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AND:

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OFFICIAL LIQUIDATOR OF M/S. UNITED BREWERIES (HOLDINGS) LTD., (IN LIQUIDATION) ATTACHED TO HIGH COURT OF KARNATAKA, CORPORATE BHAVAN, NO. 26-27, 12TH FLOOR, RAHEJA TOWERS, M.G. ROAD, BENGALURU - 560 001

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SRI KRISHNAPPA MUNIVENKATASWAMAPPA SRINIVASAMURTHY, DIRECTOR,

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HC-KAR

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NO. 5/25, 10TH MAIN, 3RD CROSS, 1ST BLOCK, JAYANAGAR, BENGALURU - 560 011.

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M/S. DALAVOI AUDIKESAVULU THEJASHWARI, DIRECTOR, NO. 5/25, 10TH MAIN, 13TH CROSS, NEAR ASHOKA PILLAR, 1ST BLOCK, JAYANAGAR, BENGALURU - 560 011.

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…RESPONDENTS

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(BY SRI. KRUTIKA RAGHAVAN, ADVOCATE A/W SRI. KAILASH NATH, ADVOCATE AND SRI. B.P. CHENGAPPA, ADVOCATE FOR OL/R1; VIDE ORDER DATED 17.02.2025, SERVICE OF NOTICE IS HELD SUFFICIENT IN RESPECT OF R2 AND R3 AND UNREPRESENTED)

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THIS OSA IS FILED UNDER SECTION 483 OF THE COMPANIES ACT R/W SEC. 4 OF THE HIGH COURT OF KARNATAKA ACT, 1961 PRAYING TO A. CALL FOR THE RECORDS C.A. NO. 280 OF 2023 IN C.O.P NO.57 OF 2012 ON THE FILE OF THIS HON'BLE COURT AND ETC.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE D K SINGH

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AND

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HON'BLE MR. JUSTICE VENKATESH NAIK T

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HC-KAR

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ORAL ORDER

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(PER: HON'BLE MR. JUSTICE D K SINGH)

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The present OSA has been filed impugning the order dated 12.06.2024 passed by learned Company Judge in Company Application No.280/2023 in Company Petition No.57/2012. The United Breweries (Holdings) Ltd., (UBHL) came to be wound up by order dated 07.02.2017. The petition for winding up was filed in the year 2012.

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Against the said winding up order, Company Appeal OSA 5/2017 was filed before the Division Bench of this court. An interim order dated 25.04.2017 was passed directing the Official Liquidator not to precipitate the matter during the pendency of the appeal. The Official Liquidator was however authorized to collect the rents, etc. from the tenants of UBHL.

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Finally the judgment in appeal came to be passed on 06.03.2020 and the order passed by learned Company Judge dated 07.02.2017 was upheld.

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The Official Liquidator, when he came to know that a sum of Rs.20,01,43,101/- was due to the appellant company as

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on 07.02.2017 which was advanced by the Ex-Director of UBHL, the company under liquidation is the appellant company, during the pendency of winding up proceedings, he filed an application u/s.446(2b) of the Companies Act, 1956 on 13.09.2023 before the learned Company Judge for the following reliefs:

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"a) To direct the respondent No.1 to 3 pay a sum of Rs.20,01,43,101/- and Rs.23,64,86,895/- as interest @ 18% from 07.02.2017 to 31.08.2023, total amounting to Rs.43,66,9,996/- and future interest at 18% from 01.09.2023 till the date of payment.

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b) To pass such other order or orders as may be deemed fit and proper in the Circumstances of the case".

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An objection was raised by the appellant company against the Company Application No.280/2023 filed by the Official Liquidator being time barred under the provisions of Sec.458A of Companies Act, 1956. The learned Company Judge framed the following points/issues for consideration:

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"i) When would the limitation period commence in terms of Section 458-A of the Companies Act, 1956,

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for the Official Liquidator to take action against the company's creditors?

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ii) Would the limitation period stand extended if an appeal is filed challenging the winding up order and the winding up order is stayed? If so, from when would the limitation period have to be calculated?

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iii) Is the Official Liquidator expected to conduct an investigation, ascertain the creditors, and initiate action against such creditors on his own?

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iv) In the present matter, can the application filed by the Official Liquidator under Section 446(2) of the Act be said to be barred by law of limitation and dismissed in limine at this stage?

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v) What order?

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In answer to question no.1, the learned Company

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Judge has held that the limitation of four years as provided u/s.458A for recovery of dues of the company under liquidation would start from the date of filing of the statement of affairs of the company by its Ex-Director. According to the learned Company Judge, the Official Liquidator would come to know about the dues recoverable only from the statement of affairs of the company and not from the winding up order. Therefore,

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the limitation would begin for recovery of dues u/s.458A of the Companies Act from the date of filing of the statement of affairs by its Ex-Director.

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Sri A.Murali, learned Sr. Counsel assisted by Sri Arjun.P.K. appearing for the appellant submits that in fact the learned Company Judge has virtually amended the provisions of Sec.458A of the Companies Act by the interpretative process in saying that the limitation would begin to recover the dues of the company under liquidation from the date of filing of the statement of affairs of the company by its Ex-Directors. He further submits that Sec.458A only prescribes that four years limitation i.e., 3+1 would begin from the date of order of winding up. By way of interpretation, the court cannot amend the provisions and incorporate something which is not intended by the legislature.

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Smt.Krutika Raghavan, learned counsel appearing for

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the Official Liquidator has supported the finding of learned Company Judge on Issue No.1 and has reiterated the findings. She has submitted that the Official Liquidator will not come to know the affairs of the company, and the dues to be recovered

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unless and until the statement of affairs of the company is filed before the Official Liquidator by its Ex-Director. We have considered the submissions. Sec.458A reads as under:

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"458A. EXCLUSION OF CERTAIN TIME IN COMPUTING PERIODS OF LIMITATION: Notwithstanding anything in the Indian Limitation Act, 1908 (9 of 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 1 [Tribunal], 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".

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The language employed in the section is explicit. There is nothing in the language employed in the section which would suggest that any interpretation required to determine the start of the limitation to file suit/application/proceedings for recovery of its dues. The text of the section is unambiguous and explicit. The language of the section is explicit and categorical which states limitation of four years (3+1) would begin from

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the date of winding up order excluding the period between commencement of winding up proceedings and date of winding up order (both inclusive). Therefore, we are in agreement with the learned Sr. Counsel appearing for the appellant that the court by the process of interpretation cannot amend the provision of section 458A which is unambiguous and categorical. When the text is explicit, no interpretation is required and plain language in the provision should be given natural meaning. In that view of the matter, we set aside the finding of the learned Single Judge on Issue No.1 that the limitation of four years (3+1) u/s.458A will begin from the date of filing of the statement of affairs of the company before the Official Liquidator by the Ex-Director of the company under liquidation.

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Now the question that arises for consideration is whether the application filed by the Official Liquidator on 13.09.2020 was within the period of limitation or not.

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Against the winding up order dated 07.02.2017, an appeal came to be filed before the Division Bench of this court and an interim order as stated above came to be passed. The

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appeal came to be dismissed only on 06.03.2020. It is no longer res integra that the appeal is in continuation of the original proceedings of the winding up. If the appeal is in continuation of the original proceedings, the limitation of four years would begin from the date of final judgment/order passed in the appeal which is dated as 06.03.2020.

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Learned Sr. Counsel for the appellant however submits that there was no stay granted in the appeal as to the Official Liquidator not to proceed for recovery of dues of the company under winding up. He therefore submits that the pendency of the appeal or the final order in the appeal would not be the starting point for extending the limitation of four years from the date of order of winding up. He submits that the Official Liquidator was permitted to collect the rents, etc. of the company under winding up, and therefore, the Official Liquidator would have filed the application within the time of four years as prescribed u/s.458A. In sum & substance, the submission is that limitation would not start for taking action for recovery of dues of the company under liquidation from the

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date of final order passed in the appeal but it should relate to the date of the winding up order passed by the company court.

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We have considered the submissions. We have

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perused the interim order passed by learned Division Bench on 25.04.2017 which would read as under:

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"Mr.S.Mahesh, learned advocate appearing for the Enforcement Directorate files a memorandum. Let it be kept with the record.

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Post this matter three weeks after the reopening of the Court after the Annual Vacation, 2017.

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The Official Liquidator is requested not to precipitate the matter during the pendency of the appeal."

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The Official Liquidator was asked not to precipitate the matter during the pendency of the appeal. We are of the considered view that even without the interim order when the appeal was pending and it got finalized only on 06.03.2020, the order of winding up would get merged with the order passed in appeal. The appeal being in continuation of original

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proceedings, the limitation would start from the date of order passed in the appeal which is 06.03.2020.

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In view thereof, we are of the considered view that

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the application filed by the Official Liquidator in Application No.280/2023 was well within time of limitation prescribed u/s.458A of the Companies Act, 1956. Thus, we dismiss the

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appeal and hold that the application filed by the Official Liquidator was within the limitation prescribed u/s.458A of the Companies Act, 1956. No other point was urged for our consideration.

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Sd/(D K SINGH) JUDGE

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Sd/(VENKATESH NAIK T) JUDGE

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SNB

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List No.: 1 Sl No.: 11 CT: BHK

M/S. Mysore Fruit Products Pvt. Ltd., v. Official Liquidator of M/S. United Breweries (Holdings) Ltd.

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M/S. Mysore Fruit Products Pvt. Ltd., v. Official Liquidator of M/S. United Breweries (Holdings) Ltd.

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