Supreme Court of India· 12 August 2026
Under Section 14 of the Limitation Act, 1963, can the time spent prosecuting a winding up petition before the Company Court be excluded in computing the limitation period for a subsequent suit for recovery of money based on the same transactions?
MAGEBA BRIDGE PRODUCTS PRIVATE LIMITED v. M/S. TRADE CENTRE
2026 INSC 839 · Civil Appeal No.10658 of 2026
Coram: K. Vinod Chandran; J. B. Pardiwala
Answer
No. A winding up proceeding is a separate and independent remedy from a suit for recovery of money; the initiation of a winding up petition, which may or may not enable recovery, does not impact the limitation applicable to the separate remedy of a suit for recovery.
Headnote
Indian Partnership Act, 1932 — s.69(2) — Limitation Act, 1963 — s.14 — Registration of firm — Acknowledgment of debt — Running account — Winding up proceedings —
Indian Partnership Act, 1932 — s.69(2) — Registration of firm — Form-VIII — Order XLI Rule 27(1) —
Held: Exhibit-8, a memorandum issued by the Registrar of Firms acknowledging receipt of documents and intimating that they were filed, recorded and registered, together with a certified copy of Form-VIII produced under Order XLI Rule 27(1), sufficiently proved registration of the plaintiff-firm, and the suit was not hit by Section 69(2) of the Indian Partnership Act, 1932. (¶4, 5, 6)
Limitation Act, 1963 — s.14 — Winding up — Separate and independent remedy — Acknowledgment of debt — Running account —
Held further: Time spent prosecuting a winding up petition cannot be excluded under Section 14 of the Limitation Act, 1963 for a suit for recovery of money, since a winding up proceeding is a separate and independent remedy from a suit for recovery; and since the payment recorded admitted bills, not acknowledgment of debt on a running account, the claim was barred by limitation. (¶14, 15, 16, 17)
Indian Partnership Act, 1932 — Limitation Act, 1963 — Appeal allowed —
Held further: The order of the High Court was reversed to the extent of granting the relief of recovery, since the claim for recovery is hit by limitation, despite the finding that the suit was properly instituted by a partnership firm whose registration was proved in accordance with law; the appeal was allowed. (¶18, 19)
In the Court's own words
Paragraph 13Apposite would also be reference to Yeswant Deorao Deshmukh v. Walchand Ramchand Kothari[^2], which is almost on similar lines. Therein the question was as to whether the period spent in pursuing an insolvency proceedings can be reckoned as the period eligible for condonation under Section 14 of the Limitation Act, when a delayed execution petition is filed. It was categorically held that “There could be no exclusion of the time occupied by the insolvency proceedings which clearly was not for the purpose of obtaining the same relief (sic). The eventual recovery in such a proceeding was held to be a ‘mere consequence or result’. The relief was found to be different and so was the procedure widely divergent. In Jignesh Shah and Anr. v. Union of India and Anr.[^3] a converse situation was considered. The filing of a civil suit was projected as a ground for the delayed winding up petition filed before the High Court, which was sought to be transferred to the NCLT. It was categorically held that the filing of a suit for recovery based upon a cause of action, that is within limitation cannot in any manner impact the separate and independent remedy of a winding up proceeding. The converse position applies squarely to this case that the initiation of a winding up proceeding, which may or may not enable recovery, will not impact the limitation for the separate remedy of suit for recovery of money.
Paragraph 14We are of the opinion that on the facts of this case Yeswant Deorao Deshmukh[^2] & Jignesh Shah[^3] apply squarely. In this context, we also have to notice that the Company Petition filed was not entertained since it was found that, though slightly delayed, the appellant issued a reply alleging that the substantial part of the claim made by the respondent, was apparently ‘at the behest and with the connivance of the erstwhile associates of our company’ (sic). Hence, there was a clear dispute raised and it was in the context of the appellant having undertaken to provide security for two bills i.e. TC/152 and TC/153, which were found in their accounts too, that the respondent was relegated to the civil remedy, further directing that deposit of Rs.12,38,000/- covered by the bills bearing Nos.TC/152 and TC/153 be secured before the Civil Court within 3 weeks; to facilitate which, the company proceeding was kept in abeyance till the security is furnished, failing which the Company Petition was entitled to be revived for the sum of Rs.12,38,000/- with interest @ 8% per annum. The acceptance of the bills was not an admission, giving up the plea of limitation. There was also no extension of limitation by the Company Court, which in any event, the Court was not competent so to do. Hence, the clear finding was that there is no scope of winding up of the appellant, the demand having been disputed by the appellant. The decisions of this Court with respect to finding a clear distinction between a winding up proceeding and a suit for recovery of money simpliciter, applies squarely.
Acts & Sections
s.69(2) Indian Partnership Act, 1932s.14 Limitation Act, 1963s.5 Limitation Act, 1963Order XLI Rule 27(1) Code of Civil Procedure, 1908One judgment a day. That's the whole habit.
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Also decided in this judgment
Where a defendant, in response to a demand notice, admits and pays specific invoices that are undisputed while contesting the rest, does that payment amount to an acknowledgment of debt on a running account so as to extend limitation for the entire claim?Under Section 69(2) of the Indian Partnership Act, 1932, can a suit by an unregistered firm be maintained where a memorandum issued by the Registrar of Firms acknowledging receipt and registration of documents, along with a certified copy of Form-VIII, is produced to prove registration?Does the principle in Kalpraj Dharamshi, permitting exclusion of time under Sections 5 and 14 of the Limitation Act, 1963 for a delayed appeal bona fide pursued before a wrong forum, extend to permit exclusion of time spent in an independent winding up proceeding for the purpose of a separate suit for recovery of money?