P.T. Raman Nayar, J.
1. The question is whether this proceeding in misfeasance brought under Section 543 of the Companies Act read with Section 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 25-3-1949 and the winding up order was made on 10-12-1950, 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 27-9-1946 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 9-12-1953, 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 Section 235 of the Indian Companies Act 1913. The present application was brought on 22-5-1958, 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 9-12-1953.
I do not think this argument can bear a moment's examination. In the first place both under Section 235 of the Indian Companies Act, 1913 and under Section 543 of the Companies Act, 1956 read with Section 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 Section 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 Section 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 10-12-1950, naturally so since the application is against the directors. As I have said the application was brought only on 21-5-1958, and since I have repelled the argument that the proceeding must be deemed to have been initiated on 9-12-1953 it follows that the application is out of time so far as Section 543(2) of the Companies Act is concerned.
4. The company being a banking company is however entitled to the benefit of Section 45-O 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-O. (1) Notwithstanding anything to the contrary contained in the Indian Limitation Act,1908 or in any other taw 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 Section 543 of the Companies Act, 1956 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 shall be twelve years from the date of the accrual of such claims or five years from the date of the first appointment of the liquidator, whichever is longer.
(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.'
It is said that Sub-section (1) applies to this case, the application being an application by a banking company which is being wound up and that, that being so, the period commencing from the presentation of the winding up petition namely, the period from 25-3-1949, must be excluded for the purposes of limitation. That would of course mean that the application is in time and it would further mean that no application in misfeasance by a banking company in liquidation can never be barred by time. For, such an application can be brought only in the course of the winding up, that is after the order of winding up, and if the period from the presentation of petition, which must necessarily be earlier, is to be excluded there can be no question of any bar of time. I do not however think that Sub-section (1) really applies to an application in misfeasance.
Such an application as I have already said can be brought only after the winding up order, and it seems to me that it could not have been the intention to exclude a period of time commencing even before the date when time can possibly begin to run. Sub-section (2) makes this amply clear, for, if under Sub-section (1) there can be no limitation whatsoever in respect of a misfeasance petition in the course of the winding up of a banking company, Sub-section (2) which says that notwithstanding anything to the contrary contained in Section 543 of the Companies Act 1956 all claims against directors other than those specified in the earlier part of the sub-section (and a claim in misfeasance is one such other claim) the period of limitation shall be 12 years from the accrual of such claims or five years from the appointment of the liquidator whichever is longer. Sub-section (2) necessarily means that an application for misfeasance brought after this time would be barred by limitation, and that would be contrary to Sub-section (1) if that were to be applicaole to proceedings in misfeasance. If there were to be no limitation in a claim in misfeasance against directors such a claim could also have been included among the claims specified in the earlier part of Sub-section (2) as claims for which there is no limitation. I hold that the period of limitation for this case is that prescribed by Sub-section (2) of Section 45-O of the Banking Companies Act
5. It has been argued that a further period of one year is available under Section 45-F of the Banking Companies Act as that Act stood after amendment by Act 20/50 and before the repeal effected by Ordinance 4/53 dated 24-10-1953. But the present application was brought only on 22-5-58 when that provision stood repealed, and I do not see how the application can have the benefit of an exclusion given by a statute which had been repealed and was no longer in force. I have dealt with this matter at length in my order in B. C. C. No. 9 of 1957 in B. C. P. No. 2 of 1953 differing from the view taken in In the matter of Agricultural and Industrial Bank Ltd., AIR1957 Mad 295 which is cited on behalf of the liquidator. With great respect I adhere to that view and I see nothing in Kunhappu v. Chintan,1958 Ker LT 804 which considered the effect of a period of exclusion in a temporary statute and expressly proceeded on the footing that the consequences of the expiry of a temporary statute were different from the repeal of a statute, to persuade me to a different view.
6. So far as I can see, the several heads ofclaim in the application fall broadly under twoclasses, in some cases under both. One class isbased on the contractual liability of the directors.In respect of this, by reason of Section 45-O thereis no bar of time at all and the liquidator maytake separate steps for recovery either by way ofsuit or by way of a claim under Sec. 45-D ofthe Banking Companies Act The other class isbased on misfeasance; and the claims thereundercan lie only in respect of acts committed withinthe 12 years preceding the presentation of thisapplication, that is after 21-5-1946. I direct theliquidator to file a statement showing clearly whichare the acts of misfeasance committed on andafter this date and which of the respondents areliable in respect of them. This statement he willfile by 12-7-1961.