In the matter of Agricultural and Industrial Bank Ltd.; In the matter of Official Liquidator Agricultural and Industrial Bank Ltd., Coondapur (in liquidation)

Balakrishna Ayyar, J.—On 18th June 1956 Surendranath Nayak acquired 60 shares in the Agricultural and Industrial Bank Ltd.,

Coondapoor, now in liquidation. The shares were of the face value of Rs. 50 on which only Rs. 10 had been paid. On 4th January 1950 the

directors declared these shares to be forfeited to the bank on the ground that the calls due on the shares had not been paid. On 18th February

1953 a petition was filed in this court for winding up the Bank, and, on 6th April 1953, an order was made directing that the bank be wound up.

On 12th January 1956 the liquidator filed a claim against Surendranath Nayak for a sum of Rs. 2400 being the amount of the unpaid calls on the

60 shares. Article 34 of the Articles of the Bank empowered the directors to charge interest on arrears of calls at a rate not exceeding nine per

cent per annum. On the basis of this article the liquidator has also claimed interest at nine per cent.

which, on the date the claim was filed, amounted to Rs. 1,294-3-9.

Mr. Kamath, learned counsel for Surendranath Nayak resisted the claim on the ground that it is barred by limitation. Counsel for the liquidator,

however, relies on Section 45F of Central Act XX of 1950 and Section 45-0 of Central Act 52 of 1953. Ordinarily, under the Limitation Act the

claim would have been barred within three years from 4th January 1950, which is the date on which the directors of the Bank declared that these

shares had been forfeited. Section 45F of Central Act 20 of 1950, however, enacts,

Notwithstanding anything to the contrary contained in the Indian Limitation Act ..... 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 he excluded.

By virtue of this section the liquidator would be entitled to exclude the one year immediately preceding 6th April 1953 which is the date on which

the order to wind up the company was made.

Section 45 (o) (1) of Act 52 of 1953 runs:

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.

It will be noticed that this section differs from Section 45-F of Act XX of 1950 in two respects. In the first place, the time which is excluded is not

the time commencing from the day on which the order of winding up was made, but the time commencing from the day on which the petition to

wind up the company was presented. In the second place, the period of time excluded is not one year but the entire period commencing from the

date of the presentation of the winding up.

The argument of the learned counsel for the liquidator was this. By reason of Section 45-F of Act XX of 1950 the claim was alive on 30th

December 1953 when the Act 52 of 1953 came into force. Nothing in Act 52 of 1953 affects the life or enforceability of that claim. On the other

hand, the Act gives a further period of limitation.

He also referred to Section 6 of the General Clauses Act to support this contention. That section, so far as is now material, runs as follows:

Where ..... any Central Act ..... made after the commencement of this Act, repeals any enactment ..... then, unless a different intention appears,

the repeal shall not-

(c) affect any right, ..... acquired, .... under any enactment so repealed;

(e) affect any ..... remedy in respect of any such right ..... as aforesaid.

When Act 52 of 1953 was passed the remedy which the liquidator had against Surendranath Nayak was alive, and, that remedy was kept alive by

reason of Section 6 of the General Clauses Act

Mr. Kamath the learned counsel for Sur-endranath Nayak, contended that this is not the way in which the sections should be read. According

to him, there is no justification for adding on the period referred to in Section 45-0 of Act 52 of 1953 to the period referred to in Section 45-F of

Act XX of 1950. Act 52 of 1953 came into force on 30th December 1953 and that was the Act in force on 12th January 1956 when the claim

was filed. Who must try to see whether the claim was in time with reference to the Act which was in force on the date the claim was filed. When

we try to do that it will he found that the only period that can be excluded is the time commencing from 6th April 1953. But, the claim had already

become barred on 6th April 1953.

I prefer the reasoning of the learned counsel for the liquidator. The argument of Mr. Kamath in effect and in substance ignores the provisions of

Act XX of 1950. Before that argument can be accepted, we must postulate that Act XX of 1950 had never been passed. Such an assumption

cannot properly be made. On the day that Act 52 of 1953 became law the claim which the Official Liquidator has preferred was alive, and it is not

to be readily supposed that when it passed Act 52 of 1953 the legislature intended that the rights and remedies which were alive on that date

should be destroyed. The contention that the claim is barred by limitation must therefore be overruled.

Debtor No. 30, it is reported, is dead. The liquidator will take steps to bring on record his legal representatives.

So far as the other debtors are concerned, Mr. Kamath strongly argued that interest has been claimed at 9 per cent, that the amount of the

interest alone now comes to more than one-half of the principal, that all these debtors are people with very limited income and that some

indulgence should be shown to them by at least disallowing the claim of the liquidator for interest. I can sympathies with the point of view which

Mr. Kamath pressed but then, I have also to take into account the interests of the people who have put money into this bank. If the position of the

bank is as if was explained to me by the learned counsel for the liquidator, it is very unlikely that the creditors of the Bank would get even two

annas in the rupee. I feel that it would be scarcely right to pass an order that would reduce even this small dividend. However, as a measure of

indulgence to the debtors and also as an incentive to them to pay promptly, I would give this direction; if the amount of the principal claimed is paid

with interest at 4 1/2 per cent within six months from today, the liquidator may take the amount in full quit; if the amount is not paid with in six

months, the debtors must pay interest at nine per cent.

The liquidator will be entitled to his costs. Advocate''s fee on the usual scale. Certificates will issue on the basis of this order as against each

debtor other than debtor No. 30 in respect of whom steps must be taken to bring on record his legal re preventative .