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HIGH COURT OF CALCUTTA
S. C. Lahiri, R. S. Bachawat
SARKAR DUTT ROY AND CO. - Appellant
Versus
SHREE BANK LTD. (IN LIQUIDATION) - Respondent
A. F. O. O. 230 Of 1958
Decided On : SEPTEMBER 22, 1959
BANKING COMPANIES ACT - Section 45-O - Retrospective effect - Limitation - Execution of decree - Right to apply for execution of decree barred by limitation on the date of the commencement of Section 45-O - Whether revived by Section 45-O.
Fact of the Case:
The respondent Bank obtained a compromise decree against the appellant firm for a sum of Rs. 31,000. The appellant firm paid a sum of Rs. 2115 towards the decretal dues and it was agreed that a sum of Rs. 6885 would be paid on May 9, 1947 and the balance of Rs. 22,000 would be paid according to the following instalments: (1) Rs. 1,000/- on May 30, 1947. (2) Rs. 2,000/- on December 30, 1947. (3) Rs. 4. 000/- on December 30, 1948. (4) Rs. 4. 000/- on December 30, 1949. (5) Rs 4. 000/- on December 30, 1950. (6) Rs. 4,000/- on December 30, 1951. (7) Rs. 3,000/- on December 30, 1952. The respondent Bank was wound up by an order of the Court on a petition for winding up presented on May 11, 1948. Before the winding up order the respondent Bank filed an unsuccessful application for execution in the court of the Subordinate Judge, Midnapore in Title Execution Case No. 16 of 1948. After the winding up order the respondent Bank through its Liquidator filed a second application for execution in the same court on July 16, 1930 and this execution case was registered as Title Execution Case No. 29 of 1950. The main point raised in the appeal is whether the respondent's claim is barred by limitation.
Finding of the Court:
The Court held that Section 45-O (1) of the Banking Companies Act is not retrospective to the extent that it revives the decree-holder's light to apply for execution in respect of instalments which had already become barred on the date when section 45-O came into operation. The Court also held that Section 45-O (1) does not apply to a case where the right to sue or the right to apply accrued after the date of the presentation of the petition for the' winding up of the banking company.
Issues: 1. Whether Section 45-O of the Banking Companies Act has retrospective effect? 2. Whether the right to apply for execution of a decree which had become barred under the Limitation Act of 1877 could be revived under the Limitation Act of 1908? 3. Whether Section 45-O (1) of the Banking Companies Act applies to suits which were instituted before the coming into operation of that section?
Ratio Decidendi: 1. Section 45-O (1) of the Banking Companies Act is not retrospective to the extent that it revives the decree-holder's light to apply for execution in respect of instalments which had already become barred on the date when section 45-O came into operation. 2. The right to apply for execution of a decree which had become barred under the Limitation Act of 1877 could not be revived under the Limitation Act of 1908 in the absence of any provision in the latter Act so retrospective in its effect as to revive and make effective a judgment or decree which before that date had become unenforceable by lapse of time. 3. Section 45-O (1) of the Banking Companies Act does not apply to suits which were instituted before the coming into operation of that section.
Final Decision: The appeal was allowed and the order of Bose, J. , dated 2-6-1958, by which his Lordship directed the appointment of a Receiver in execution for the realisation) of the amounts payable on bills submitted by the appellant to the Executive Engineer, Works and Buildings Department, Midnapore, and the application made on the tabular statement dated 24-8-1957 and filed on or about 26-8-1957 was dismissed.
( 1 ) THIS appeal arises out of an order of Bose J. dated June 2, 1958, by which His Lordship confirmed an interim order appointing the Court Liquidator High Court as the Receiver of certain amounts of money payable on bills submitted by the appellant firm to the Executive Engineer, Works and Buildings Department, Midnapore Division and authorising the Receiver so appointed to collect the outstanding debts and claims due in respect of the aforesaid bills. The aforesaid order was made by Bore J. upon a Tabular Statement filed by the respondent Bank verified by an affidavit dated the 24th of August, 1957. The question that arises for consideration is whether the application for execution filed by the respondent is barred by limitation.
( 2 ) THE facts which are not in dispute may be briefly stated as follows: on March 29, 1947, the respondent Banking Company obtained a compromise decree against the appellant firm for a sum of Rs. 31,000. 00. On the date of the compromise decree the appellant firm paid a sum of Rs. 2115. 00 towards the decretal dues and it was agreed that a sum of Rs. 6885. 00 would be paid on May 9, 1947 and it was further agreed that the balance of Rs. 22,000. 00 would be paid according to the following instalments: (1) Rs. 1,000;- on May 30, 1947 .
(2) Rs. 2,000/- on December 30, 1947 .
(3) Rs. 4. 000/- on December 30, 1948 .
(4) Rs. 4. 000/- on December 30, 1949 .
(5) Rs 4. 000/- on December 30, 1950 .
(6) Rs. 4,000/- on December 30, 1951 .
(7) Rs. 3,000/- on December 30, 1952 .
According to paragraph 4 of the petition of compromise the decree-holder was entitled to realise by execution the amount of instalment in default and according to paragraph 5 the decree-holder was further entitled to realise the entire amount of the decree after four months of the due dates if any of the instalments still remained unpaid. It is admitted that the appellant firm paid the sum of Rs. 2115/-and also the sum of Rs. 6,8857- on the dates on which they were due to be paid. It is also admitted that the appellant firm paid the first instalment of Rs. 1,000/- on or before the 30th May, 1947 but did not pay the remaining instalments. On August 3, 1948, the respondent Bank was wound up by an order of the Court on a petition for winding up presented on May 11, 1948. Before the winding up order the respondent Bank filed an unsuccessful application for execution in the court of the Subordinate Judge, Midnapore in Title Execution Case No. 16 of 1948. After the winding up order the respondent Bank through its Liquidator filed a second application for execution in the same court on July 16, 1930 and this execution case was registered as Title Execution Case No. 29 of 1950. Before the filing of the second application for execution the Banking Companies Amendment Act (Act XX of 1950) had come into operation on March 18, 1950. Under Section 11 of the Banking Companies Amendment Act of 1950, Title Execution Case No. 29 of 1950 of the Court of the Subordinate Judge, Midnapore was transferred, to this Court on or about August 16, 1950 and it was registered in this Court as T. B. C. Suit No. 11 of 1950. In T. B. C. Suit No. 11 of 1950 a precept was issued by this Court to the District Judge, Midnapore under sec. 46 of the Code of Civil Procedure with the direction to attach the amounts payable on the bills submitted by the appellant firm to the Executive Engineer, Works and Buildings Department, Midnapore. On an application by the appellant firm Bose J. by an order dated December 11, 1957 cancelled the precept and lifted the attachment. Thereafter the respondent Bank through its Liquidator filed a Tabular Statement on or about August 26, 1957 upon which the order under appeal has been made.
( 3 ) THE main point raised in the appeal is whether the respondent's claim is barred by limitation. That question will have to he answered by a correct interpretation of Section 45-O of the Banking Companies (Amendment)
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