The judgment establishes the principle that the period of limitation for misfeasance applications by banking companies in liquidation is as prescribed by S.45-0(2) of the Banking Companies Act.

1. The question is whether this proceeding in misfeasance brought under S.543 of the Companies Act read with S.45-H of the Banking Companies Act by the liquidator of a banking company is in time,

2. The winding up petition was presented on 25th March 1949 and the winding up order was made on 10th December 1950, the liquidator being appointed for the first time on the same date. (There was a prior winding up order by the Bombay High Court on 27th September 1946 in respect of the British Indian Branches of the Bank which was incorporated in what was then known as the Indian State of Travancore and the appointment of a liquidator consequent thereto, but that may be ignored for the present purpose). On 9th December 1953 the then joint liquidators made a report, Report No. 10, in which they alleged that certain sums were due from the directors named in the report and prayed that proceedings may be started against them under S.235 of the Indian Companies Act, 1913. The present application was brought on 22nd May 1958 and, obviously with an eye on limitation, professes to be in continuation of Report No. 10 and the first argument advanced by the liquidator is that the misfeasance proceeding must be regarded as having been instituted by means of that report on 9th December 1953. I do not think this argument can bear a moment's examination. In the first place both under S.235 of the Indian Companies Act, 1913 and under S.543 of the Companies Act, 1956 read with S.45 H of the Banking Companies Act, the proceeding has to be initiated by an application. A report is not an application. Report No. 10 does not pretend to be one and does not comply in any way with the rules in force regarding the presentation of an application. That apart, it gives no particulars whatsoever but only makes the bare allegation that certain sums are due from certain directors and prays that the court may be pleased to take action against them. It does not become an application under S.235 of the Indian Companies Act, 1913 by the mere mention of that section. The proceeding was commenced only by the present application of the 22nd May 1958.

3. Under S.543 (2) of the Companies Act, 1956 an application in misfeasance has to be made within five years from the date of the order for winding up or of the first appointment of the liquidator in the winding up, or of the misfeasance or breach of trust as the case may be whichever is longer. The alleged acts of misfeasance in this case are all before the winding up order and the appointment of the liquidator on 10th December 1950, naturally so since the application is against the directors. As I have said the application was brought only on 21st May 1958, and since I have repelled the argument that the proceeding must be deemed to have been initiated on 9th December 1953 it follows that the application is out of time so far as S.543(2) of the Companies Act is concerned.

4. The company being a banking company is however entitled to the benefit of S.45-0 of the Banking Companies Act which prescribes a special period for limitation for banking companies that are being wound up. This section runs as follows:

"45-0. (1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 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 or S.543 of the Companies Act, 195(5 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, exp