LexSREE BANK LID. versus SARKAR DUTI ROY AND CO.
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SREE BANK LID.
v.
SARKAR DUTI ROY AND CO.
April 9, 1965
(A. K. SARKAR, K. N. WANCHOO AND RAGHUBAR DAYAL, JJ.]
Banking Companies Act (10 of 1949), s. 45-0 and Banking Com-
panies (Amendment) Act (52 of 1953)-Applicabilitl/ to instalment
decree.
In 1949, the Banking Companies Act was passed with a view to
protect and secure the interests of depositors. [n 1953 s. 45-0 was
enacted by the Banking Companies (Amendment) Act, in pursuance
of the recommendations of the Banking Companies Liquidation
Proceedings Committee. Section 45-0 (1) provided that in computing
the period of limitation prescribed for an application by a banking
company which is being wound up, the period commencing from
the date of the presentation of the winding up petition shall be
excluded; and s. 45-0 (3) provided that sub-s. (1) shall also apply to
a banking company in respect of which the winding-up petition was
presented before the commencement of the Amendment Act, that is,
30th December 1953.
On 1st May 1947, a decree for a sum of money had been passed
in favour of the appellant-Bank, against the res1xmdents. The
decree provided that the amount which was due on 30th May shou.ld
be paid in 6 annual instalments each payatle on 30th December
ftom 1947 to 1952. The decree also provided that if the respondents
failed to pay any instalment within 4 months of its becoming due,
the appellant shall be entitled to realise all the amounts then due,
ty execution. None of the instalments was· paid. On May 11, 1948
a petition for winding up of the appellant was presented and it was
ordered to be wound up on August 3, 1948. In August 1956 the liquidator
filed an execu,tion application on the original side of the High Court,
for realising the amounts. The applicatiOn was allowed, but the
High Court, in Letters Patent Appeal, held that the application was
barred by time.
In appeal to this Court, the
appellant
contended that
in view of s. 45-0 the application was. within time; while the respon-
dents contended that: (1) all the instalments fell due by 1st May
1948 by operation of the default clause, and therefore, the applica-
tion was barred by Art. 182 (7) of the Limitation Act, 1908, by the
time s. 45-0 was brought _on the statute book; (ii) the section has no
retrospective operation so as to revive a debt which had become
tarred at the date of its enactment; and (iii) if the default clause
gave only an option to the appellant so that it could apply for execu-
tion as and when an instalment fell due, then, the instalments which
fell due in 1947, 1948 and 1949 had become barred before the enact-
ment of the sectioH; and the instalments which fell due during the
years 1948 to 1952 were also not saved from the bar of limitation
as the section applied only to those cases where the right to execut~
had arisen before the presentation of the winding-up petition.
708
A
B
c
D
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G
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A
B
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D
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If
SH.J.~E H:\XK 1".
ltl"l"l' HOY '
HELD: (By full Court): Sc.:tion ~5-0 saved the oxccutim1 appli-
,·ation from the lnH" of limita)ion imposed by. Art."182(7) of the L'mi-
tation Act. [ll~H; 7!9A: 727D: '142A]
,
(ij Per Sarkar. J: Thc.,right to apply for execution in resp-ect
ot' the instaln1ents uncle~· the decree arose on the dates on which
they respectively fell due. r113Hl
.
The default clause was only
intended
for the benefit 6f the
appellant and gave an option to the apP.,llant to sµe for the entire
amount or waive the- benefit of the option, and the aµpellant had
not taken advantag~ of it. f713D, E, Hl
·
.
Ram Culpo Bhattachar;ij, v. Ram Chunder Shame, (18S7) I.L.R. 14
Cal. 352, referred to.
,
(ii) Per Sarkar, J: There 'is no reason why a distinction should
have been intended between debtors, the claims against w•hom'might
have become barred before the section was\ enacted and those. the
claims against whom, becazi,ie barred thereafter. In fact, the otject
of fhe section would be better achieved by applying it to both classe.-.
[715 F-G] ,
One of the methods by which, the object of the Act which' was
lo protect depositors, cQ_uld be achieved is by extending thL period of
limitation. for enforceineht--0{ the claims of a bank in liqui<lation, so
tha: more money may be collected for payment to the depositors.
That be'ng so, the largest extension of the period, which the langu-
age used is capable of, must have been intended. [715~-Fl'
Besides, s. 45-0(3) expressly makes. sub-s. (1Excerpt shown. Read the full judgment & AI analysis in Lexace.