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HIGH COURT OF CALCUTTA
Bachawat
SUBURBAN BANK LTD. (IN LIQDN.) - Appellant
Versus
NISTARAN CHAKRABARTI - Respondent
Suit 4617 Of 1949
Decided On : APRIL 08, 1954
LIMITATION ACT - BANKING COMPANIES ACT - SECTION 45-O - APPLICABILITY TO PENDING SUITS - INTERPRETATION OF STATUTE - RETROSPECTIVE OPERATION - VESTED RIGHTS - REMEDIAL STATUTE - CONSTRUCTION OF STATUTE - GENERAL CLAUSES ACT, SECTION 6 - LIMITATION ACT, SECTION 2 - SPECIAL LAW OF LIMITATION - BANKING COMPANIES IN LIQUIDATION - CLAIMS AGAINST DIRECTORS - SUB-SECTION (2) OF SECTION 45-O - NON-APPLICABILITY TO PENDING SUITS - SUB-SECTION (1) OF SECTION 45-O - APPLICABILITY TO SUITS AND APPLICATIONS COMMENCED AFTER THE SUBSECTION CAME INTO FORCE - CHARGE ON POLICIES OF LIFE INSURANCE - LIMITATION ACT, ARTICLE 120 - ENFORCEMENT OF CHARGE - RIGHT TO ENFORCE CHARGE - ACCRUAL OF RIGHT - DECREE - APPOINTMENT OF RECEIVER - APPROPRIATION OF MONEYS REALISED FROM POLICIES.
Fact of the Case:
The plaintiff, a bank in liquidation, claimed a sum of Rs. 1604/12/- in respect of an overdraft account and Rs. 16,751/4/9 in respect of three loans advanced to the defendant on 27-6-1945. The suit was instituted on 3-12-1949. The Banking Companies Ordinance (23 of 1949) came into force on 10-9-1949, inserting Section 45f in Act 10 of 1949, which provided for a special law of limitation for Banking Companies in liquidation. The Banking Companies Ordinance 4 of 1953 came into force on 24-10-1953, substituting a new Part IIIA in place of the existing Part IIIA, including Section 45-O, which also provided for a special law of limitation for Banking Companies in liquidation.
Finding of the Court:
The court held that Section 45-O of Act 10 of 1949 did not apply to a suit or application pending on the date when it came into force. The court found that the claim for a decree for Rs. 16,751/4/9 against the defendant personally was barred by the law of limitation, but the claim to enforce the charge on the policies of life insurance was within time.
Issues: Whether Section 45-O of Act 10 of 1949 applied to a pending suit.
Ratio Decidendi: The court held that a statute which is not a matter of mere procedure will not be presumed to affect the rights of the parties in a pending proceeding even though the statute is shown to affect similar rights in subsequent proceedings. The court found that Section 45-O did not refer to a pending proceeding either in express words or by necessary implication. The court also found that the language of the subsection was not capable of being construed to apply to those pending suits where its application would revive the right of action barred by the law in force at the time of the institution and that it did not apply to other pending suits where its application would bar the existing right of action.
Final Decision: The court passed a decree in favor of the plaintiff against the defendant for the sum of Rs. 350/-, interim interest, interest on decree, and costs. The court also declared that the policies mentioned in the plaint stood charged for the repayment of Rs. 16,751/4/9, but the recovery of which from the defendant personally was barred by the law of limitation. The court appointed the Court Liquidator as Receiver of the said policies without security and without remuneration and declared that the plaintiff was entitled to appropriate all moneys realized from the policies towards pro tanto satisfaction of the said sum of Rs. 16,751/4/9.
( 1 ) THE plaintiff claims a sum of Rs. 1604/12/- in respect of an overdraft account. Admittedly this claim is not barred by the law of limitation. Interest on this account was charged at the rate of 12 per cent, per annum with monthly rests. The bank is not a scheduled bank. It is not alleged nor proved that the loans were commercial loans. The rate of interest being excessive the accounts must be reopened under the provisions of the Bengal Money Lenders Act. It is admitted by both parties that on such reopening and on taking accounts in accordance with the provisions of that Act only a sum of Rs. 350/- is due from the defendant to the plaintiff. The plaintiff is accordingly entitled to a decree for the sum of Rs. 350/- against the defendant in respect of this account.
( 2 ) THE plaintiff claims another sum of Rs. 16,751/4/9 in respect of three loans of Rs. 6. 000/-, Rs. 5. 000/ and Rs. 1,000/-, all advanced by the plaintiff to the defendant on 27-6-1945. On the same date the defendant executed in favour of the plaintiff three promissory notes all carrying interest at the rate of 9 per cent, per annum with quarterly rests.- The plaintiff bank is now in liquidation. The winding up petition was presented on 12-5-1948 and the order for winding up was passed on 30-6-1948. The suit was instituted on 3-12-1949.
( 3 ) THE Banking Companies Ordinance (23 of 1949) came into force on 10-9-1949. It amended. Act 10 of 1949 and inserted in it Part III-A which consists of a group of sections including Section 45f. The Banking Companies (Amendment) Act (20 of1950) came into force on 18-3-1950. It repealed Ordinance 23 of 1949 and re-enacted many of its provisions including Section 45f, Section 45f read as follows:"45f. Special period of limitation--Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908), or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application by a banking company, the period of one year immediately preceding the date of the order for the winding up of the banking company shall be excluded. "the Banking Companies Ordinance 4 of 1953 came into force on 24-10-1953. It amended Act 10 of 1949 and substituted a new part IIIA in place of the existing Part IIIA. The new Part IIIA consisted of a group of sections including Section 45-O. The Banking Companies (Amendment) Act (52 of 1953) came into force on 30-12-1953. It repealed Ordinance 4 of 1953 and re-enacted many of its provisions including Section 45-O. Section 45-O reads as follows:"45-O. Special period of limitation-- (1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908) or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of the presentation of the petition for the winding up of the banking, company shall be excluded. (2) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908) or Section 235 of the Indian Companies Act, 1913 (VII of 1913) or in any other, law for the time being in force, there shall be no period of limitation for the recovery of arrears of calls from any director of a banking company which is being wound up or for the enforcement by the banking company against any of its directors of any claim, based on a contract, express or implied, and In respect of all other claims by the banking company against its directors, the period of limitation snail be twelve years from the date of the accrual of such claims. (3) The provisions of this section, in so far as they relate to banking companies being wound up, shall also apply to a banking company in respect of which a petition for the winding up has been presented before the commencement of the Banking Companies (Amendment) Act, 1953. "
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