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Gorakpur Electric Supply Co. Ltd. Vs. R.E. Nariman and Co. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad
Decided On
Reported inAIR1948All75
AppellantGorakpur Electric Supply Co. Ltd.
RespondentR.E. Nariman and Co.
Excerpt:
.....4. article 62, limitation act is clearly not applicable. the cause of action for a suit for refund would, therefore, not arise till 2-9-1936. the present suit was filed on 24-8-1940. if the period between 3-8-1939 and 19-8-1940, when the liquidators were prosecuting in good, faith certain proceedings before the learned company judge for an order for refund of this amount is excluded, the suit was clearly filed within a period of three years. 662-0-9. it was there clearly understood that the cause of action for refund did not commence till the date of the winding up order. in the view that we have taken, therefore, the suit was clearly within time......made on 2nd september 1936. in the year 1989 on 3rd august, the official liquidator applied to the learned company judge for an order under section 227 for the refund of this amount, which they alleged the defendants had wrongly realised from the company during the pendency of the winding up petition in this court. the defendants also filed an application before the learned company judge under the same section for an order validating these payments to them. the learned company judge by an order dated 19th august 1940 dismissed both these applications and held that the official liquidator, if he had any right, should file a suit, but he was not prepared to validate these payments as requested by the defendants. the suit was filed on 24th august 1940. the defendants urged that the suit was.....
Judgment:

Malik, J.

1. This is a plaintiff's appeal. The plaintiff the Gorakhpur Electric Supply Co., Ltd., Gorakhpur, through the Official Liquidator, filed a suit in the Court of the Munsif of Gorakhpur for realisation of Rs. 2860-0-0. The defendants were a firm of general merchants, who had supplied to the company before the winding up certain lubricants and the price of the lubricants supplied was due to them. They filed a Suit No. 361 of 1932 for recovery of this amount. That suit was decreed by the learned Temporary Civil Judge of Gorakhpur. The defendants, who were the decree, holders, applied for execution of the decree and they realised the amount due to them under that decree between the dates 18th February 1935 and 5tS August 1935 by attachment of the bills for electric current consumed by certain third parties, which amount was payable by them to the plaintiff company.

2. Before the dates of these realisations, however, an application for winding up of the company was tiled in this Court on 31st August 1934. The winding-up order was made on 2nd September 1936. In the year 1989 on 3rd August, the Official Liquidator applied to the learned Company Judge for an order under Section 227 for the refund of this amount, which they alleged the defendants had wrongly realised from the company during the pendency of the winding up petition in this Court. The defendants also filed an application before the learned Company Judge under the same section for an order validating these payments to them. The learned Company Judge by an order dated 19th August 1940 dismissed both these applications and held that the Official Liquidator, if he had any right, should file a suit, but he was not prepared to validate these payments as requested by the defendants. The suit was filed on 24th August 1940. The defendants urged that the suit was barred by limitation.

3. Both the Courts below have held that Article 49, Limitation Act, was the Article applicable and, while the trial Court held that limitation started to run from April 1936 when provisional liquidators were appointed by this Court, the lower appellate Court has held that the view of the trial Court that limitation began to run from April 1936 was erroneous, and that limitation started against the plaintiff company on the dates when the invalid payments were made to the defendants, that is, according to the lower appellate Court, the cause of action arose on various dates between 18th February 1935 and 6th August 1935. The lower appellate Court further considered the question of giving the liquidator the benefit of the period during which his application under Section 227 was pending before the learned Company Judge and came to the conclusion that even if that period were excluded under Section 14, Limitation Act, the suit would still remain time barred. It is against that order that the plaintiff has come up in appeal to this Court. Learned Counsel for the plaintiff appellant has urged that Article 49, Limitation Act, does not apply to this case and the proper Article applicable is Article 112. Learned Counsel for the defendants, on the other hand, has relied on Article 49 and in the alternative on Article 62. Article 49, Limitation Act, reads as follows:

For other specific moveable property (the word 'other' has been used because certain specific moveable properties have been mentioned in Article 48), or for compensation for wrongfully taking or injuring or wrongfully detaining the same. Three years. When the property is wrongfully taken or injured or when the detainer's possession becomes unlawful.

Obviously this Article contemplates a suit provided for by Sections 10 and 11, Specific Relief Act (Act 1 [i] of 1877). Under Section 10, a person entitled to the possession of specific moveable property may recover the same in the manner prescribed by the Code of Civil Procedure, and under Section 11 any person having the possession or control of a moveable property, of which he is not the owner, may be compelled to deliver it to the person entitled to its immediate possession under certain circumstances set out in the section. A claim for realisation of money, as in this case, where the specific coins or notes are not claimed or cannot be claimed under the Specific Relief Act, cannot be a claim of the nature provided) for by Article 49. If the matter was res Integra, we would have had no hesitation in holding that Article 49, Limitation Act, had no application. Learned Counsel for the appellant has, however, very rightly drawn our attention to certain decisions of this Court In Rameshwar Chaubey v. Mata Bhikh ('83) 5 All. 341, where the plaintiff had claimed to recover Rs. 160 from the defendant on the ground that he had given the defendant that amount to deliver to a relation of the plaintiff, but the defendant had not delivered that amount and had kept the money with himself, a Bench of this Court (Old field and Brodhurst JJ.) held that Article 48, Limitation Act, was applicable. We would like to point out, however, that the point that has been argued before us in this case was not urged before the Bench as the defendant was not represented. With great respect to the learned Judges, we find it difficult to follow that decision, but we would have had no hesitation in holding that we were not bound by it as the point was not considered by this Bench, if the point had not arisen in later cases in which it was held that this decision was binding. In Ram Lal v. Ghulam Husain ('07) 29 All. 579 another Bench of this Court, while doubting the correctness of this decision, observed as follows:

It may be open to argument whether a suit for money could be properly considered to be a suit for specific moveable property, but we are bound by that decision.

They, however, went on to hold that even if Article 48 did not apply Article 49 would be applicable and the result would be the same. The point arose in two other cases, Benares Bank Ltd. v. Ram Prasad 17 A.I.R. 1930 All. 573 and Jaganji v. Bandan : AIR1930All397 before Sen and Niamatullah JJ. In the case of Jaganji the judgment was delivered by Sen J. and it was held that

it may be open to argument whether a suit for money could properly be considered to be a suit for specific moveable property, but we are bound by these decisions.

In the case of Benares Bank Ltd. v. Ram Prasad : AIR1930All573 the judgment was delivered by Niamatullah J. It appears that the Court was inclined to hold that Article 48, Limitation Act was applicable to a suit for money; in an earlier part of the judgment their Lordships hold that they were bound by the previous decisions. So far as we can see, no doubt was expressed by the Bench about the applicability of Article 48. If it were necessary we would have directed that this case should go before a larger Bench so that the question may be finally settled one way or the other. There are a large number of decisions of other High Courts that a suit for money is not a suit for specific moveable property and Article 49, Limitation Act was not applicable. It is not necessary for us to discuss those authorities since we have taken the view that even if Article 49 is applied, the suit is within time.

4. Article 62, Limitation Act is clearly not applicable. Article 62 provides for a case where money payable to the plaintiff is paid to the defendant and is recoverable on that account. It contemplates cases of payment to servants and agents. Bo far as we can see, the only Article applicable to a case of this kind is Article 120, Limitation Act as there is no other Article which can specifically apply.

5. As we have already said, even if we were to accept the contention of the learned, counsel for the respondents, the suit must be taken to have been filed within time. The application for winding up was filed on 31-8-1934. The realisations were made by the defendants between the dates 18-2-1935 and 5-8-1935. On the dates of the payments, it was impossible to urge that the payments were void and it was not possible for the Company to have claimed a refund of these amounts. There is no provision in the Companies Act, so far as we know, that after an application for winding up is made any payment or realisation becomes automatically void even though the application for winding up may be ultimately rejected. As we read Sections 232, 227 and 168, Companies Act, the only reasonable interpretation that can be placed on those sections is that after the winding up order is made any payment made during the pendency of the winding up petition or after the winding up order, if it contravenes the provisions of Sections 232 or 237 is invalid. As has been said in so many cases, the cause of action accrues when there is in existence a person who can sue and another who can be sued and when all the facts have happened which are material to be proved to entitle the plaintiff to succeed. The cause of action arises when and only when, the aggrieved party has the right to apply to the proper tribunals for relief. The company could not have claimed a refund of the amounts realised by the defendant before the order of winding up was passed by this Court. It was after the winding up order that under Section 168, Companies Act the proceedings could be deemed to have commenced from the date of the application. The cause of action for a suit for refund would, therefore, not arise till 2-9-1936. The present suit was filed on 24-8-1940. If the period between 3-8-1939 and 19-8-1940, when the liquidators were prosecuting in good, faith certain proceedings before the learned Company Judge for an order for refund of this amount is excluded, the suit was clearly filed within a period of three years. The suit could not, therefore, be barred by limitation. In another very similar case that came before a learned single Judge of this Court, C.R. No. 316/19415 it was held as follows:

On 2-9-1936, the High Court made an order for the winding up of the Company. Thereafter, before the expiry of three years from that date, on 23-8-1939, the Official Liquidator made an application to the High Court for an order for refund of this sum of Rs. 662-0-9. It was there clearly understood that the cause of action for refund did not commence till the date of the winding up order.

6. The case before us is very similar to the case in Hoti Lal v. Lower Ganges Jumna Electricity Distributing Co. Ltd. Exn. F.A. No. 276 of 1941. In that case there was a decree for Rs. 9680 against the company. The decree was put under execution. During the pendency of the winding up petition in this Court certain payments were made towards the decree. It is not clear whether the judgment-debtor deposited the money in the executing Court or the money was realised by sale of some property but the fact remains that it was not a payment out of Court but was a payment in part satisfaction of the decree which was under execution. This Court held that the suit of the Official Liquidators was within time as the cause of action for recovery of the amount realised from the defendants did not arise till the order of this Court was passed on 26-9-1940, refusing to validate the payments made to the appellants. The lower Court distinguished this case on the ground that the payments made were voluntary payments and in that case there was no application for execution while in the case before us the money was paid in the execution proceedings. The lower Court did not have the judgment in Hotilals' cases of the trial Court before it, but from that judgment it is clear that in that case also the decree was put in execution and the amount was paid to the executing Court or was realised by the executing Court from the assets of the company. On the facts, therefore, the two cases were not in any respect distinguishable. As we have already held that even taking the date of the winding up order to be the date on which the cause of action arose the suit is within time, it is not necessary for us to express any opinion as to whether the cause of action should be deemed to arise on the date when the order is passed refusing to validate the payments. If we may say so with great respect, one result of following that view may be that in a case where the defendant has not applied for validating the payments no cause of action would accrue till the application is filed and the Company Judge has refused to validate the payments. In the view that we have taken, therefore, the suit was clearly within time. All other issues have been decided in favour of the plaintiff. The result, therefore, is that the plaintiff's suit is decreed with costs in all Courts.


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