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Section 358: Exclusion of certain time in computing period of limitation

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Act 2013
Section 357 All 470 Sections of Companies Act Section 359
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Legal Commentary & Landmark Judgments: Section 358

Section 358 of the Companies Act, 2013 grants statutory extension of limitation periods for claims brought on behalf of a company in winding up, excluding the entire timeframe from petition presentation to one year following the winding-up order.

  • Scope of Exclusionary Window: In computing limitation for any suit or application instituted in the name and on behalf of a company being wound up by the Tribunal, the entire period from the commencement of winding up to one year following the winding-up order is excluded.
  • Exclusive Shield for the Company: The benefit of statutory exclusion is restricted strictly to actions filed by or on behalf of the company in liquidation, and cannot be invoked by creditors or third parties proceeding against the company.
  • Protection of Statutory Liquidator: Designed to afford the liquidator adequate time to seize books, investigate past records, conduct audits, and recover debts without being barred by general statutes of limitation.
Key Landmark Precedents:
  • Karnataka Steel & Wire Products Ltd. v. Kohinoor Rolling Mills, (2003) 1 SCC 76: The Supreme Court held that Section 458A of the 1956 Act (corresponding to Section 358) excludes the period from petition presentation to one year after the winding-up order, extending limitation for debt recovery claims filed by the Official Liquidator.
  • Official Liquidator v. B. Lakshmikantham, (1987) 61 Comp Cas 218 (AP): The Division Bench held that the benefit of exclusion under this provision applies to all recovery suits and misfeasance claims initiated by the liquidator on behalf of the company.
  • Central Bank of India v. Official Liquidator, (1982) 52 Comp Cas 539 (Bom): Held that Section 358's predecessor was enacted to overcome the practical difficulties faced by liquidators upon taking charge of disorganized records of collapsed companies.
Courtroom Practice & Strategic Litigation Guidance:

When computing limitation for corporate debt recovery or misfeasance summons under Section 358, calculate the base limitation under the Limitation Act, 1963, add the exact intervening days between the presentation of the winding-up petition and the date of the winding-up order, plus a statutory grace period of precisely 365 days.

Section 357 All 470 Sections of Companies Act Section 359