Judgement

Appeal (No. 86 of 1930) from a decree of the High Court (May 14, 1929) made in the winding-up of the Dehra Dun-Mussoorie Electric Tramway Company, Ld.

Law Rep. 60 Ind. App. 13 ( 1932- 1933) Hansraj Gupta v. Official Liquidators of Dehra Dun-Mussoorie 190

The above-named company was ordered to be wound up by an order made on March 26, 1926, upon a petition presented on January 26, 1926. The present appeal arose out of an application made by the respondents, the official liquidators, on March 26, 1928, under s. 186, sub-s. 1, of the Indian Companies Act, 1913, praying that the appellants, who as executors of Lala Raghumal were in the list of contributories, should be ordered to pay three sums of Rs. 27,000, Rs. 35,000, and Rs. 7703-13-0, as moneys due from the deceased to the company.

By the above-named sub-section " The Court may, at any time after making a winding-up order, make an order on any contributory for the time being settled on the list of contributories to pay, in manner directed by the order, any money due from him or from the estate of the person whom he represents to the company exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act.

The facts giving rise to the three claims are fully stated in the judgment of the Judicial Committee in Hansraj Gupta v. Asthana (reported supra, p. 1).

The application was heard by Mukerji and Young JJ., who made an order for payment of the three sums with interest. Upon grounds which appear in the judgment of the Board (Supra at p. 9.) in Hansraj Gupta v. Asthana, the learned judges held that suits by the company to recover the sums in question would not have been barred by the Indian Limitation Act, 1908, before the winding-up order. With regard to the sum of Rs. 35,000 they held that the claim being to recover money paid under a contract which had been discovered to be void, the time would ordinarily have run from the date of the agreement and a suit would have been barred on September 13, 1925 ; but that the company had been kept uninformed of the payment and that therefore art. 95 or art. 120 applied, and accordingly a suit would not have become barred until September 13, 1928, or later. The learned judges held that as the three claims were not time-barred at the commencement of the winding-up, the liquidators, representing the creditors as well as the company, were entitled to an order for payment under s. 186, sub-s. 1, of the Indian Companies Act, 1913. They attached particular weight to the words " at any time " in the sub-section, and rejected the view of the Lahore High Court in Sri Narain v. Liquidator, Union Bank of India (( 1922) I. L. R. 4 Lah. 109.), that under s. 186, sub-s. 1, an order could not be made for payment of a debt which was time-barred at the date of the application.

The present appeal was argued together with appeal No. 127 of 1930 (reported supra, p. 1), but by the judgment in that appeal was ordered to be further argued.

1932. June 16, 17, 20, 21 ; Nov. 24. Lionel Cohen K.C. and Wallach for the appellants. Neither of the sums Rs. 27,000 and Rs. 35,000 were recoverable by the company at any time. They were paid as earnest money and were to be set off against sums becoming due from the company; the company having failed to order the goods could not recover the payments. If, however, the Rs. 35,000 was ever recoverable the cause of action arose at the date of the agreement, and was time-barred even before the winding-up. The High Court was wrong in holding that the company did not know of the payment and that consequently the commencement of the period was postponed. The payment was made by the manager of the company who negotiated the contract on its behalf. Each of the claims being time-barred at the date when the application was made the liquidators were not entitled to an order under s. 186 of the Indian Companies Act. It was rightly held in Sri Narain v. Liquidator, Union Bank of India(( 1922) I.