SARKAR DUTT ROY AND CO Vs. BANK LTD

JUDGEMENT

(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: <FRM>JUDGEMENT_243_AIR(CAL)_1960Html1.htm</FRM> 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) Act of 1953 (Act LII of 1953) which came into operation on December 30, 1953. But before I address myself to that question I have to decide a preliminary question, namely, what is the starting point of limitation in the present case. On behalf of the appellant a faint attempt was made to establish that the starting point of limitation is four months after the date of the first default, that is the end of the month of April, 1948 because under the terms of the decree, in default of payment of any of the instalments within four months of the due date the entire decretal amount would become due. In view of the decision of the Full Bench of this Court in the case of Rangalal v. Shyamlal, 50 Cal. W.N. 735 : (AIR 1946 Cal 500), this argument is untenable. In that case it was authoritatively laid down that the right of the decree-holder to apply for execution for the entire decretal amount in default of any instalment is a right in addition to and not in restriction of his right to apply for execution for each instalment as and when it falls due. Consequently the decree-holder has the option to realise the entire decretal amount or to realise the amount of each instalment and if the application for realisation of the subsequent instalment or instalments in default be made within three years from the date of the default it will not he held to be barred under Article 182(7) of the Indian Limitation Act, although it was made more than three years from the date of the first default. Applying this rule to the present case I hold that under Article 182(7) of the Indian Limitation Act the decree-holder gets a period of three years from the date of each default to realise the amount or amounts for which default has been made. Under the Indian Limitation Act, therefore, the starting point of limitation will be the date on which each instalment became due and since the application for execution in the present case was filed on or about the 26th of August, 1957, there can be no doubt that under Article 182(7) of the Indian Limitation Act the application for execution in respect of the instalments was barred by limitation on that date.