State of Punjab and ors. Vs. Bhai Ardaman Singh and ors. Etc. - Court Judgment

Excerpt:
- [a.k. sarkar,; k.n. wanchoo and; raghubar dayal, jj.] in 1949, the banking companies act was passed with a view to protect and secure the interests of depositors. in 1953 s. 45-o was enacted by the banking companies (amendment) act, in pursuance of the recommendations of the banking companies liquidation proceedings committee. section 45-o (1) provided that in computing the period of limitation prescribed for an application by a banking company which is being wound up, the period commencing from the date of the presentation of the winding up petition shall be excluded; and s. 45-o (3) provided that sub-s. (1) shall also apply to a banking company in respect of which the winding-up petition was presented before the commencement of the amendment act, that is, 30th december 1953. on 1st may 1947, a decree for a sum of money had been passed in favour of the appellant--bank, against the respondents. the decree provided that the amount which was due on 30th may should be paid in 6 annual instalments each payable on 30th december from 1947 to 1952. the decree also provided that if the respondents failed to pay any instalment within 4 months of its becoming due, the appellant shall be entitled to realise all the amounts then due, by execution. none of the instalments was paid. on may 11, 1948 a petition for winding up of the appellant was presented and it was ordered to be wound up on august 3, 1948. in august 1956 the liquidator filed an execution application on the original side of the high court, for realising the amounts. the application was allowed, but the high court, in letters patent appeal, held that the application was barred by time. in appeal to this court, the appellant contended that in view of s. 45-o the application was within time: while the respondents contended that: (1) all the instalments fell due by 1st may 1948 by operation of the default clause, and therefore, the application was barred by art. 182 (7) of the limitation act, 1908, by the time s. 45- 0 was brought on the statute book; (ii) the section has no retrospective operation so as to revive a debt which had become barred at the date of its enactment; and (iii) if the default clause gave only an option to the appellant so that it could apply for execution as and when an instalment fell due, then, the instalments which fell due in 1947, 1948 and 1949 had become barred before the enactment of the section; and the instalments which fell due during the years 1948 to 1952 were also not saved from the bar of limitation, as the section applied only to those cases where the right to execute had arisen before the presentation of the winding-up petition. held: (by full court): section 45-0 saved the execution application from the bar of limitation imposed by art. 182(7) of the limitation act. [712h; 719a; 727d; 742a] (i) per sarkar, j: the right to apply for execution in respect of the instalments under the decree arose on the dates on which they respectively fell due. [713h] the default clause was only intended for the benefit of the appellant and gave an option to the appellant to sue for the entire amount or waive the benefit of the option, and the appellant had not taken advantage of it. [713d, e, h] ram culpo bhattacharji v. ram chunder shome, (1887) i.l.r. 14 cal. 352, referred to. (ii) per sarkar, j: there is no reason why a distinction should have been intended between debtors, the claims against whom might have become barred before the section was enacted and those, the claims against whom, became barred thereafter. in fact, the object of the section would be better achieved by applying it to both classes. [715 f-g] one of the methods by which, the object of the act which was to protect depositors, could be achieved is by extending the period of limitation for enforcement of the claims of a bank in liquidation, so that more money may be collected for payment to the depositors. that being so, the largest extension of the period, which the language used is capable of, must have been intended. [715e-f] besides, s. 45-o(3) expressly makes sub-s. (1), applicable to a banking company being would up on a petition presented before 30th december 1953 under s. 45-0(1) and (3) a period which had started to run before that date could be excluded, and, there is no hint that such exclusion is confined to cases where the right had not become barred by that date. subs. (3) must have been intended to give full retrospective effect to subs. (1), as otherwise, it need not have been enacted, because, sub-s. (1) would, by its own terms, apply to cases of winding up on a petition presented before the amending act, and, considering the intention of the act, sub-s. (3) could not have been enacted as a surplusage or ex abundanti cautela. therefore, s. 45-0(1) applies to applications by the banking company, even when they had become barred before the amending act. [716 b-e h; 717 c] per wanchoo, j: the appellant would be entitled to exclude the entire period from 11th may 1948--the date of presentation of the winding-up application--upto the date of the execution application and would thus be entitled to execute the decree for the total of the 6 instalments due. [726 e] the language of s. 45-0(1) implies that it was meant to be retrospective and that conclusion becomes inevitable when it is read with sub-s. (3), in the background of the remedy that the legislature intended to provide for the benefit of depositors. section 45-0(1) imperatively lava down that where an application is filed by a banking company which was being would up on or after 30th december 1953 the court must exclude the period commencing from the date of presentation of the winding up petition to the date of the application in computing the period of limitation. further by virtue of subs (3), subs. (1) applies not only to those banking companies which were being wound up on petitions presented on or after the section came into force, but also to those banking companies where the winding-up petition was made before 30th december 1953 and whether the winding up order was made before or after that date provided the banking company was in the process of being wound up when the application was filed; and, there is no scope for the court to consider whether the application, if filed before 30th december 1953, would barred by limitation or not. [722h; 723 a-b, d-e; 724 e] per raghubar dayal j: the appellant's application for execution is maintainable and not barred by time, because, the effect of s. 45-0(1) is that, in applications made by a banking company which is being would up, or for whose winding up a petition has been presented before 30th december 1953, the period of limitation is arrested on the date of the presentation of the winding up petition, and it is not material whether such date is earlier than 30th december 1953 or net. therefore, the sub-section is retrospective, and an application can be made even in regard to matters with respect to which such action could be taken on the date of the presentation of the windup petition, but could not be taken, because of efflux of time, on 30th december 1953. [731c; 736g. 737e] one of the conditions for the application of the sub- section is that a "banking company is being wound up", and this condition would be satisfied by all companies with respect to which winding up orders had been made either before 30th december 1953 or thereafter. there is nothing in the language of the sub-section to limit the expression to those companies which respect to which winding up orders are made subsequent to that date. the provision is not for the benefit of such companies only, but, is for the benefit of all companies which would be in the process of winding up during the enforcement of the act. this is also apparent when sub-ss. (1) and (3) are read together. so read, the period of exclusion would be available in connection with applications by a banking company which is being wound up or with respect to which a petition for winding up has keen made prior to 30th december 1953. if the provisions of sub- s. (1) can apply to the banking companies with respect to which proceedings on a winding petition were pending on 30th december 1953, there is no reason why they should not apply to banking companies with respect to which winding up orders had been made prior 'to that date. further, if a restricted interpretation is given to sub-s. (1), by confining it to cases where the cause of action was not barred on 30th december 1953, then sub-s. (3) will have no utility, because, that sub-section only provides that whatever advantage a banking company can derive from the provisions of sub-s. (1) when it is being wound up, would be available to it even if it is not being wound up, if a petition for its winding up had been presented prior to 30th december 1953. the only case in which the banking company can take advantage of sub-s. (3), then, would be vhen the cause of action for the application has not lapsed by that date and the proceedings on a winding up application were pending on that date. but, such cases would be covered by the language of sub-s. (1)itself, for, the cause of action would be alive on 30th december 1953 and the winding up order would be made subsequent to that date. [734-b-e; 736b, e-h] case law referred to. (iii) per sarkar and raghubar dayal, jj.: section 45- 0(1) should be read as permitting the exclusion of the entire period commencing from the date of the presentation of the winding up petition where the debts became due before that date, and, in cases there the debt became due subsequently such part of that period as commences from the date of the accrual of the debt. [718e; 741f] per sarkar, j.: there is no reason why it should have been intended that debts which fell due before the presentation of the winding up petition but were not barred by that date could be recovered, and not those which became due thereafter. no doubt, if the sub-section is applied to the case of a debt accruing due to a banking company after the presentation of a winding up petition, such a debt would be completely free from the bar of limitation, but since it has that effect in the case of debts which accrued due prior to the presentation of the petit,ion and had not become barred on that date, the section must be construed as permitting the whole of the period commencing from the presentation of the petition to be excluded where in fact it could be done, and a part of that period only where the whole of it could not be excluded. [717f, h; 718c, h] cortis v. the kent water works company, 7 b & c 314, referred to. per raghubar dayal, j: the appellant waived its right under the default clause of the decree and sought execution for the realisation of the various instalments. even so the execution application was within time, because, a banking company is entitled to exclude, the period from the date on which the winding up petition was presented upto the date of the institution of the application, from the period of limitation prescribed, and it would be illogical to hold that it is not entitled to ask that a shorter period, as the case would be, when the cause of action arose subsequent to the presentation of the winding up petition, should be excluded. it may be that this means, the entire period of limitation is abrogated with respect to causes of action arising subsequent to the date of the winding up petition, but it would be anomalous to hold that action can be taken with the help of the sub-section with respect to causes of action' which had arisen much earlier than the date of the presentation of the winding up petition, but action cannot be taken with respect to causes of action arising subsequent to such a date if it had not been taken within the prescribed period of limitation. [740g, 741c, g-h] per wanchoo j.: the present case is governed by s. 45- 0(3)' because, the winding up petition was presented before s. 45-0(1) came into force, but by virtue of sub-s. (3), sub-s. '(1) would apply. as there was default in the payment of the instalment due on 30th december 1947, the right to execute all the remaining instalments arose on ist may 1948 and since that right was not waived, limitation for all the instalments began even on ist may 1948, while the winding up application was filed on 11th may 1948, and so, the appellant could take advantage of the section and execute the decree for the entire amount. [726a-e; 727c-d] exclusion of time cannot take place where time has not begun to run before the date from which the exclusion begins. therefore, in order that s. 45-0(1) should apply, it is necessary that the period of limitation for the application should have begun to run before the date of winding up petition, but should not have run out. [724-c] on this interpretation, in the case of instalment decrees without a default clause, the instalments which became due and were not paid before the winding up petition may be recoverable by execution, while in the case of instalments which became due after the presentation of the petition, the exclusion provided by the section would not come into play. but if the sub-section is interpreted as stopping limitation in all cases, after the presentation of the winding up petition, it will result in another anomaly, that there would be no limitation at all in a case where the liquidator files a suit and gets a decree. [7241; 725a]  - in the view of the learned judge act 8 of 1953 was a complete code in itself and provided for a complete machinery for the decision of disputes like the dispute before him. under this law tribunals of special jurisdiction have been created and invested with powers which should enable them to effectively deal with disputes not only those which arise between the landlord and the tenant, but also those which arise between persons entitled to possession and persons wrongly dispossessing them. but in order that the jurisdiction of the collector to hold a summary enquiry and pass the order complained of may be attracted, it was further necessary to establish that under cl. authorities which are vested with powers- judicial or quasi-judicial -can exercise their power within the limits of their jurisdiction and their actions without jurisdiction cannot be sustained merely because another body or authority, which if lawfully approached, may have jurisdiction to pass the order complained of.j.c. shah, j.1. in this group of appeals the dispute relates to agricultural lands situate in village dialpura-bhaika, district bhatinda in the former state of pepsu and now in the state of punjab. the lands originally belonged to bhai arjan singh. on his death in 1946 the lands devolved upon his son bhai arda- man singh, the first respondent in these appeals. alleging that bhai arjan singh forcibly deprived them of the lands some time in may-june 1943, seventy tenants applied to the collector sangrur and bhatinda for an order for restoration of possession under section 43 of the pepsu tenancy and agricultural lands act 8 of 1953. the collector granted the applications and ordered that possession be restored to the tenants. the orders were confirmed in appeal by the commissioner. the commissioner was of the view that the order under section 43 could be passed by the collector on his subjective satisfaction that a person was in wrongful or un- authorised possession of lands. the financial commissioner confirmed the order of the commissioner on the ground that substantial justice had been done by the subordinate revenue authorities, and no interference with the orders was called for.2. bhai ardaman singh then filed writ petitions in the high court of punjab challenging the orders passed by the financial commissioner. the petitions were heard by gosain, j. in the view of the learned judge act 8 of 1953 was a complete code in itself and provided for a complete machinery for the decision of disputes like the dispute before him. he observed:'under this law tribunals of special jurisdiction have been created and invested with powers which should enable them to effectively deal with disputes not only those which arise between the landlord and the tenant, but also those which arise between persons entitled to possession and persons wrongly dispossessing them. it may be that in the latter case the enquiry contemplated to be made by the collector is only summary and that the aggrieved party may be able to have recourse finally to the civil court but the jurisdiction to make enquiry and to order eviction has been given by the law to the collector.'2-a. in appeals under the letters patent the high court reversed the order passed by gosain, j. the high court was of the opinion that act 8 of 1953 which came into force on december 13, 1953, had no retrospective operation and that gosain, j., was in error in making an order for possession of the lands when dispossession had taken place before the act was brought into force. the high court also held that the proceedings of the collector were vitiated because the collector declined to give to the first respondent opportunity to lead evidence which he desired to lead. with certificate granted by the high court, these appeals have been preferred by the state or punjab.3. section 43 of the pepsu act 8 of 1953 provides:'(1) any person who is in wrongful or unauthorised possession of any land-(a) the transfer of which either by the act of parties or by the operation of law is invalid under the provisions of this act, or(b) to the use and occupation of which he is not entitled under the provisions of this act, may, after summary enquiry, be ejected by the collector who may also impose on such person a penalty not exceeding five hundred rupees.* * * * *'clause (a) has evidently no application. it is not the case of any party that there was any transfer of the lands which was invalid by virtue of the provisions of the act. the tenants alleged that the first respondent was in wrongful or unauthorised possession of the lands previously occupied by them. but in order that the jurisdiction of the collector to hold a summary enquiry and pass the order complained of may be attracted, it was further necessary to establish that under cl. (b) of section 43 (1) the person in wrongful or unauthorised possession was not entitled to the use and occupation of the lands under the provisions of the act. counsel for the state of punjab is unable to invite our attention to any provision which renders the first respondent disentitled by virtue of the provisions of the act to the use and occupation of the lands. section 43(1) (b) has, therefore, no application. the condition precedent to the investment of jurisdiction in the collector being absent, the revenue authorities had no power to pass the order in ejectment which they purported to pass.4. we must point out that the proceedings of the collector are judicial in character. the trial is summary, but the collector is bound to exercise the jurisdiction vested in him not on a subjective satisfaction, as the commissioner assumed, but on a judicial determination of facts which invest him with jurisdiction to pass an order in ejectment. when the condition precedent to the exercise of jurisdiction does not exist, the collector cannot clothe himself with authority to pass the impugned orders. we also agree with the high court that in view; of the terms of cl. (b), section 43 had no retrospective operation. on the view we take, it is unnecessary to consider the argument advanced by mr. chagla on behalf of the first respondent that section 43 has no application to cases in which a dispute relating to tenancy of land arises between the landlord and his tenant.5. it is also not necessary to consider in this group of appeals whether the proceedings of the collector were vitiated, because as alleged by the first respondent the collector did not afford sufficient opportunity to lead evidence on the first respondent's plea that there had been no wrongful dispossession of the tenants.6. mr. bindra on behalf of the state contended that in any event this court should not countenance interference with the impugned orders of the revenue authorities, even if erroneous, because those authorities have in passing the orders done substantial justice. counsel contended that the tenants had been wrongfully deprived of possession of the lands by the use of force by the first respondent and the order passed by the collector though not strictly warranted by law was not liable to be disturbed by the high court in exercise of their jurisdiction to issue a writ of cerb'orari. we are unable to agree with that contention. if the collector had no jurisdiction except in the special conditions prescribed by section 43, his order could not be substantiated merely because an other authority may, if the proceedings were before that authority, on the findings recorded, have granted relief to the tenants of restoration to possession of their respective lands. authorities which are vested with powers- judicial or quasi-judicial - can exercise their power within the limits of their jurisdiction and their actions without jurisdiction cannot be sustained merely because another body or authority, which if lawfully approached, may have jurisdiction to pass the order complained of.7. the appeals are therefore dismissed with costs. one hearing fee.