M/S Benetton India Private Limited Vs Official Liquidator of M/S Natural Textiles Private Limited

SRI. RAMPRASAD SRIDHARAN CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR OF BENETTON INDIA PRIVATE LIMITED HAVING OFFICE AT PLOT NO.25 BLOCK B, INFOCITY, SECTOR - 34 GURGAON, HARAYANA - 122 001

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…APPELLANTS

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(BY SRI. RAGHURAM CADAMBI, ADVOCATE)

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AND:

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OFFICIAL LIQUIDATOR OF

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M/S NATURAL TEXTILES PRIVATE LIMITED (IN LIQUIDATION)

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ATTACHED TO HIGH COURT OF KARNATAKA ”CORPORATE BHAVAN”, NO.26-27 12^th FLOOR, RAHEJA TOWERS, M.G. ROAD, BENGALURU - 560 001

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SRI. RASHMI NAVALKUMAR THAKERIA

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EX-DIRECTOR OF

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M./S NATURAL TEXTILES PRIVATE LIMITED SON OF NAVALKUMAR KHIMRAJ THAKERIA, NO.421, THE EMBASSY, 15, ALI ASKAR ROAD, BENGALURU - 560 052

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…RESPONDENTS

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(BY SRI. K S MAHADEVAN, ADV. FOR OL/R1; V/O DATED 04.08.2025 NOTICE TO R2 IS DISPENSED WITH)

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THIS APPEAL IS FILED UNDER SECTION 483 OF THE COMPANIES ACT, 1956 READ WITH SECTION 4 OF THE HIGH COURT OF KARNATAKA ACT, 1961 PRAYING TO SET ASIDE THE ORDER DATED 14.03.2024 PASSED BY THE HON’BLE COMPANY COURT IN C.A.NO.119/2023 IN CO.P.NO.84/2012 (CONNECTED WITH CO.P.NO.204/2014 AND CO.P.NO.117/2013); AND ETC.

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

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CORAM: HON'BLE MR. JUSTICE JAYANT BANERJI and HON'BLE MR. JUSTICE T.M.NADAF

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE JAYANT BANERJI)

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Heard the learned counsel for the appellants and learned counsel appearing for the Official Liquidator.

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This appeal has been filed under Section 483 of the Companies Act, 1956¹ seeking to set aside the order dated 14.03.2024 passed by the learned Company Judge in C.A No.119/2023.

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The Official Liquidator represents the company in liquidation namely M/s Natural Textiles Private Limited. A demand notice was issued by the company in liquidation to the appellant on 19.12.2011 calling upon it to make certain payments of dues. On 18.04.2012, a petition seeking winding up of the company in liquidation was filed. It appears

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1 The Act

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that two other petitions seeking winding up of the company in liquidation were also filed on 17.06.2013 and 21.08.2014. By a common order dated 31.07.2015, an order of winding up was passed. The Official Liquidator was appointed. It appears that on 01.07.2022, the Official Liquidator received the statement of affairs filed by the ex-directors of the company in liquidation. On 19.04.2023, on the basis of the statement of affairs and the old demand notice dated 19.12.2011, the Official Liquidator filed the aforesaid company application seeking payment of alleged dues of Rs.6,48,42,813/-. Objections were filed by the appellant inter alia , raising the plea of limitation.

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By the impugned order dated 14.03.2024, the application filed by the Official Liquidator under the provisions of Section 446(2)(b) of the Act was held to be within limitation.

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The learned company Judge referred to the provisions of Section 458A of the Act and observed that prior to receipt of the statement of affairs from the ex-directors of the company in liquidation, the Official Liquidator had no knowledge of the affairs of the company and the fact that the

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dues were outstanding from the appellants. It was noted by the company Judge that under the provisions of Section 454 of the Companies Act, a period of 21 days from the date of the winding up order or within such extended time not exceeding three months from that date as the Official Liquidator or the Court may for special reasons, appoint. The Court observed that there is a statutory obligation on the part of the ex-directors to file their statement of affairs within the said period and it is on that basis that under Section 458A, the limitation has been extended for a period of one year from the date of winding up apart from the period from the date of filing of the winding up petition to the date of passing of the winding up order. It was accordingly held that the statement of affairs having been filed on 01.07.2022, the Official Liquidator had initiated the claim process on 21.04.2023, which is within the exclusionary period under Section 458A, after the date of winding up order.

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6. Learned counsel for the appellants has emphatically

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stated that the learned Judge has by means of the impugned order, extended the period of limitation which is impermissible

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in the eyes of them. He has submitted that the order of the company Judge is beyond jurisdiction. In support of his contention, he has cited the judgment of the Supreme Court in the case of Karnataka Steel & Wire Products v. Kohinoor Rolling Shutters & Engg. Works² (para No.4). A judgment dated 17.09.2025 passed by a Co-ordinate Bench of this Court in OSA No.18/2024 and a judgment of a learned single Judge in the case of NGEF Ltd (in Liqn) vs. The Managing Director, Karnataka Power Transmission Corporation Limited³ , (paragraph Nos.8 and 9) has been relied upon in support of his submission.

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Learned counsel for the Official Liquidator on the other hand has strongly opposed the appeal and has stated that on coming to know of the outstanding dues of the company in liquidation, after receipt of the statement of affairs and examining the accounts, the application was moved before the company Judge well within limitation. It is stated that the right to sue accrued to the Official Liquidator only when the statement of affairs was received by him. The submission is

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2 (2003) 1 SCC 76

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3 2015 SCC OnLine Kar 8567

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that the application was moved on behalf of the Official Liquidator within the time period prescribed under Section 458A of the Act. He has referred to the judgments of the Supreme Court in the case of State of Punjab and others vs. Gurdev Singh⁴ , (paragraph 4) and another judgment of the Supreme Court in the case of Salim D. Agboatwala and others vs. Shamalji Oddhavji Thakkar and others⁵ , (paragraph Nos.18 and 19).

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In our considered opinion, the submissions of the learned counsel for the appellants have force. The period prescribed for filing of statement of affairs under sub-Section (3) of Section 454 of the Act is to be strictly complied with by the ex-directors of the company. The legislature in its wisdom has formulated the provision of Section 458A of the Act keeping in mind the fact that the statement of affairs are required to be filed within 21 days from the date of winding up order and a leeway is provided to the ex-directors, subject to the special reasons observed by the Official Liquidator or the Court not

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4 (1991) 4 SCC 1

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5 (2021) 17 SCC 100

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exceeding a period of three months from the date of the order of winding up.

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It is the own submission of the learned counsel for the Official Liquidator that the learned company Judge had condoned the delay in excess of 800 days in filing the statement of affairs by the ex-directors. It is also admitted to the Official Liquidator that, that order of the company Judge was not subjected to challenge.

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The exclusionary period provided under Section 458A of the Companies Act is done for the purpose that given the mandatory provision of sub-Section (3) of Section 454 of the Act, the Official Liquidator would have in its possession the entire statement of affairs and all the books of accounts and assets of the company so as to enable it to take appropriate steps, if required, under the provisions of Section 446 of the Act for misfeasance / recovery of dues from any debtor of the company in liquidation. In view of the aforesaid, the order of the company Judge impugned cannot stand. It goes without saying that the specific period of limitation provided under

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Section 454(3) of the Act and the extension of limitation provided under Section 458A of the Act cannot be extended by the Tribunal/Court. We are in respectful agreement with the judgments cited by learned counsel for the appellants in this regard. The judgments cited by the learned counsel for the Official Liquidator have no application in the facts and circumstances of the instant case.

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For the reasons aforesaid, this appeal therefore succeeds and the order of the company Judge is set aside. The application filed by the Official Liquidator that is C.A No.119/2023 under Section 446(2)(b) of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959 for recovery of the amount due to the company in liquidation is hereby rejected. In parting, we may mention, what has been observed by the Supreme Court in the case of Chennai Metropolitan Water Supply & Sewerage Board and others v. T.T. Murali Babu⁶ , that “procrastination is the greatest thief of time” and secondly, that law does not permit

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