1. This appeal is directed against an order of P. B. Mukharji, J. dated August 6, 1956 by which his Lordship has settled a list of debtors of the respondent Bank under Section 46-M read with Section 46-Dof the Banking Companies Act. By this order theappellant has been directed to pay a sum of Rs. 23,671-12-7 to the respondent bank. The bankclaimed the amount as being due from the appellant upon an overdraft account. On behalf of the bank the statement of account certified by the Manager was proved. That statement of account showed that a sum of Rs. 30,587-6-0 was due by the appellant to the bank. The matter was directed to be set down for trial on evidence by the learned trial Judge and in support of the claim made by the bank a witness named Jogesh Chandra Pal whowas an Accountant of the bank at the relevant time and who was acting as an officer of the bank underthe scheme of arrangement was examined. The appellant did not, however, choose to examine either himself or any other witness in support of his case.
2. The principal defence of the appellant in the trial Court was to the effect that he was not given credit for certain goods which he had hypothecated with the bank. On this point the evidence of Jogesh Chandra Pal is to the effect that the appellant took away the hypothecated goods, sold them and deposited the sale proceeds amounting to Rs. 3,664-9-9 for which due credit was given by the bank. As a matter of fact, in the statement of accounts this sum has been shown as credited to the appellant. The learned Advocate appearing in support of the appeal has argued before us that on this point there is a discrepancy between pleading and proof. It is pointed out that in the affidavit of Jogesh Chandra Pal affirmed on May 30, 1956, he states that the goods hypothecated by the appellant were sold from time to time by the debtors themselves and the proceeds were duly credited to the accounts. This statement shows that Jogesh Chandra Pal states in his affidavit that there was a plurality of sales whereas in his evidence in answer to question 7 he says that the appellant paid the amount by a chequeand took delivery of the goods which were in the custody of the bank. It is significant, however, that the witness was not confronted in the witness box by the statement he made in his affidavit. The point would have been of some importance if the appellant had examined himself and had pledged his Oath on the question whether he had or had not taken the hypothecated goods from the bank and sold them himself. In the absence of any evidence by the appellant on that point, no importance can be attached to this discrepancy between the pleading and the proof of the case made by the bank. The first point urged in support of the appeal, therefore, cannot be sustained.
3. The second point raised in support of the appeal is that the bank has failed to produce before the Court the Register of Goods. The learned Advocate for the appellant points out that though in the affidavit of Jogesh Chandra Pal it is alleged that the bank maintains no Register of Goods, he admits in his evidence that the bank has a Register of Goods. Jogesh Chandra Pal, however, states in his evidence in answer to Question 27 that the statement made by him in his affidavit was due to a misconception, because the bank was at that time not functioning and all the books and registers of the hank were lying in a heap and at that time he had some doubts as to whether the bank would be able to find out the books. This objection also is, in the circumstances of this case, an extremely technical one. It has been rightly pointed out by the learned trial Judge that if the appellant was serious about an inspection of the Register of Goods main-tained by the bank, he could have asked for discovery and inspection. But, in point of fact, he did not ask for either of these two things in the course of the trial. If the production of the Register of Goods was sought for to prove that the appellant had not really taken away the hypothecated goods, he should have examined himself in the case and stated on oath that the goods were still lying in the custody of the bank and in the absence of any such evidence, the mere non-production of the Register of Goods or the discrepancy between the affidavit of Jogesh Chandra Pal and his evidence in Court is not of any assistance to the appellant. The second point raised by the learned Advocate for the appellant must also fail.
4. The third point urged in support of the appeal is that the claim of the bank is barred by limitation. The point does not appear to have been raised before the trial Judge and the trial Judge has not expressed any opinion on this point, but it is contended before us that the appellant raised this point in his affidavit-in-opposition and in reply to that point the bank stated in its affidavit-in-reply that limitation was saved by a letter of acknowledgment dated July 27, 1951, wherein the appellant acknowledged his liability in respect of the amount due from K.P. Sinha and Co., of which the appellant was the sole proprietor. That letter is an annexure to the affidavit affirmed by Jogesh Chandra Pal. It is contended before us that that letter was not proved by the bank at the trial and, therefore, it cannot be looked at for the purpose of Section 19 of the Indian Limitation Act. The point, however, is wholly misconceived. It seems to me that the appellant himself relied upon this letter at the trial for the purpose of proving a request made by him to the bank for certain concessions about interest and that letter has been referred to by the learned trial Judge for that purpose. In point of fact, in pursuance of that request the bank gave up its claim for interest amounting to about Rs. 7,000/-. This concession made by the bank was directed to be recorded by the learned trial Judge. In the grounds of appeal to this Court the appellant does not state that this letter is inadmissible because it was not proved. On the other hand, ground No. 12 in the memorandum of appeal suggests that the acknowledgment contained in that letter is inadmissible as it was not duly stamped and that it was ineffective, inasmuch as it was merely a conditional acknowledgment. For these reasons I am not prepared to accept the argument of the learngd Advocate to the effect that the letter cannot be looked at for the purpose of giving the bank a fresh start of limitation under Section 19 of the Indian Limitation Act.
5. The next question, however, is whether this letter is an acknowledgment within the meaning of Section 19. The letter beings with the heading :
'Sub:-- Settlement of a/c of Bhuban Bhandar and K. P. Sinha and Co.'
In the body of the letter there are sentences which run as follows:
'However we are prepared to make payment to you of 15 per cent of the total amount that will be settled amicably within the 31st December, 1951 and 25 per cent within 31st December, 1952 and 30 per cent within 31st December, 1953 and remaining amount within the 31st December, 1954. All other terms proposed by me in my letter dated the 16th January, 1950 regarding non-payment of interest and making payments to you by instalments in course of every year will remain.
In proof of my bona fides I am enclosing herewith a Cheque ..... for Rs. 1000/- (One thousandonly) towards payment of my first instalment.'
These statements, in my opinion, undoubtedly constitute acknowledgment within the meaning of Section 19 of the Indian Limitation Act. Ever since the decision of the Judicial Committee in the case of Maniram Seth v. Seth Rupchand, ILR 33 Cal 1047 : 33 Ind App 165 (PC), it has been an established rule of law that admission of the existence of an unadjusted account would bring a case within the purview of Section 19. If there be an admission of facts of which the liability in question is a necessary consequence, that would be an acknowledgment under Section 19. It is unnecessary to multiply authorities and it is enough to state that this rule of law has never been doubted or dissented from in any subsequent decision of this Court. For the purposes of this point I have proceeded on the assumption that the different Articles of the Indian Limitation Act which apply to suits for recovery of money are also applicable to the proceedings under Section 45-D read with Section 45-M of the Banking Companies Act; but I express no opinion on the larger question whether those Articles of the Indian Limitation Act have any application to summary proceedings under Section 45-D read with Section 45-M of the Banking Companies Act. The point that the respondent's claim is barred by limitation must accordingly be overruled.
6. The next point argued by the appellant is that the summary proceeding provided for by the Banking Companies Act is not available to the respondent, because the respondent company ceased to be a banking company on January 25, 1955 and had been converted into a- trading company with effect from that date. In support of this contention that learned Advocate for the appellant wanted to place before us an affidavit affirmed by his client on August 6, 1956. This affidavit, however, was not produced in the trial Court. The minutes of the trial Court do not show that this affidavit was made a part of the record. In fact, the case was tried by P.B. Mukharji, J., on the very day on which the affidavit was affirmed. But there is no entry in the Minute Book that the affidavit was placed on the record or that copy of it was served upon the respondent. It is also admitted before us that it was not filed in the trial Court. In the paper book of this appeal, in the index of documents, this document is shown as 'not filed' in the trial Court. I do not see any reason why we should give a fresh opportunity to the appellant to use this affidavit for the first time in appeal. Order XLI, Rule 27 of the Code of Civil Procedure which governs the procedure for taking additional evidence in appeal requires that the requirement must be of the Court and the parties to a litigation have no right to patch up the evidence adduced by them in the trial Court by Additional evidence in the Court of Appeal. This point is firmly established by series of decisions of the Judicial Committee beginning with the case of Parsotim Thakur v. Lal Mohar Thakur which have now been approved by the Supreme Court of our country. The learned Advocate for the appellant invited out attention to a decision of the supreme Court in the case of Surinder Kumar v. Gian Chand, : 1SCR548 , which proceeds upon a construction of Order XLV, Rule 5 of the Supreme Court Rules and lays down the principle that under that rule the Supreme Court has inherent power to make such orders as may be necessary for the ends of justice to prevent an abuse of process of the Court and in exercise of the powers conferred by that rule, the Supreme Court has the power to admit such evidence for the non-production of which at the initial stage sufficient ground has been made out. Apart from the fact that in the present case we are not concerned with the provisions of Order XLV, Rule 5 of the Supreme Court Rules, but we are governed by the provisions of Order XLI, Rule 27 of the Code of Civil Procedure, it appears to us that the appellant has not made out any ground whatsoever for the non-production of the affidavit at the initial stage in the trial Court. There is also no formal application before us for taking this affidavit as an item of additional evidence under Order XLI, Rule 27 of the Code of Civil Procedure. For all these reasons I am wholly unable to accede to the prayer made by the appellant that we should allow him to use this affidavit for the first time in appeal. It is true that the learned trial Judge has referred to this fact of the conversion of the banking company into a non-banking company in the following words :
'But it is stated now by the debtor that subsequent to this date' (June 7, 1954) 'on the 25th January, 1955 this company was changed into a trading company ***';
and has thereafter proceeded to dispose of the contention on the assumption that the company had been converted into a trading company on January 25, 1955. The learned trial Judge did not decide the Question that the company had in fact been converted into a trading company on the alleged date and, in point of fact, he had no material before him upon which he could decide that point. He was dealing with the hypothetical case that even assuming that the company had been converted into a trading company on January 25, 1955, there was no foundation for the appellant's argument that the respondent company was not entitled to avail itselt of the benefit of Section 45-D read with Section 45-M of the Banking Companies Act. In our Opinion, that hypothetical Question did not fall for the consideration of the learned trial Judge because there was no material betore him in support of the proposition that the respondent company had been converted into a non-banking company on January 25, 1955. I am, therefore, not prepared to express any Opinion on the hypothetical question decided by the learned trial Judge. I accordingly hold that there is no merit in the contention of the appellant that the company having been converted into a non-banking company after the filing of the application but before the date of decision, the company lost the benefit of the procedure prescribed by Section 45-D read with Section 45-M of the Banking Companies Act.
7. It was next contended by the appellant that even if we do not look at the affidavit affirmed by the appellant on August 6, 1958, it appears from paragraph 2 of the petition filed by the respondent company that under an order dated February 27, 1950, the respondent company had been functioning under a, scheme of arrangement, but 'not permitted to receive fresh deposits.' It is argued that since the respondent company is not entitled to receive fresh deposits under the scheme of arrangement, it is not a banking company within the meaning of Section 5(1)(c) read with Section 5(1)(b) of the Banking Companies Act. It is contended that according to the definition of 'banking company' the banking company must be a company which transacts business of banking; and 'banking' is defined as the business of accepting, for the purpose of lending or investment, of deposits of money from the public. It is urged that since the respondent is not permitted to receive fresh deposits, it cannot be said to carry on the business of banking within the meaning of Section 5(1)(b) of the Banking Companies Act. In support of this proposition reliance is placed upon a decision of the Travancore-Cochin High Court in the case of Samyuktha Samajam v. Ooli Kalyani AIR 1954 Trav-Co. 50. That was a case where the 'Samajam' which was carrying on money-lending business did not, from its inception, accept any deposit from the public and there was no evidence that it was formed for the purpose of accepting deposits or was actually accepting deposits at the material time. In these circumstances, Subramonia Iyer, J., sitting singly held that the 'Samaj'am' could not be said to be a banking company within the meaning of the definition given in Section 5(1) of the Banking Companies Act. In the present case, however, there is no doubt that the respondent bank was formed for the purpose of accepting deposits and was actually accepting deposits from the public, but it was not permitted to accept deposits with effect from the date of the order sanctioning the scheme of arrangement. Such a company can, in my opinion, be said to be banking company, even though on account of a subsequent event it is prevented from accepting deposits from the public. A Bench decision of the Allahabad High Court in the case of Jwala Bank Ltd. v. Shitla Parshad Singh, : AIR1950All309 (Malik C. J. and Raghubar Dayal, J.) supports this conclusion. In that case a banking company was prevented by an order of the Reserve Bank from accepting fresh deposits from the public. Their Lordships held that that fact did not take away the character of the company as a banking company within the meaning of the definition in Section 5(1) of the Banking Companies Act. At page 311 of the report Malik, C. J., makes the following observations :
'The definition of a banking company in the Banking Companies Act does not mean that the company must, at the time in question, be able to accept deposits of money from the public repayable on demand or on such terms on which the money might have been deposited. It must mean that banking should be the primary business of the company even if, by reason of certain supervening causes, it is not able for the time being to carry on the work of receiving deposits and of making payments'.
I respectfully agree with these observations of Malik, C. J., and I hold that the same principle applies to a case where a banking company is prevented from accepting deposits from the public under a scheme of arrangement sanctioned by the Court.
8. For these reasons I find no substance in this point raised on behalf of the appellant.
9. The learned counsel appearing for the respondent raised a point to the effect that the appeal is barred by limitation. Since I have decided the appeal on the merits I express no opinion on this question which was raised at a very late stage of the argument and was not raised as a preliminary point.
10. For all the reasons given above, I find no substance in any of the points urged in support of the appeal.
11. I would, accordingly, order that this appeal be and the same is dismissed with costs.
12. I agree.