SARKAR, - (1.) THE following Judgments of court were delivered by
(2.) ON 1/05/1947, a decree was passed in favour of the appellant bank against the respondents by consent of parties for payment of Rs. 31,000.00 in the manner specified. The decree provided that if the respondents failed to pay any of the instalments mentioned in it within four months of the date of its becoming due, the appellant bank 'shall deem all ... instalments in default and shall be entitled to realise all the said amounts by execution'. The amounts payable under the decree by 30/05/1947 were all duly paid. That left a sum of Rs. 21,000.00 payable by six annual instalments, each payable on the 30th December of a year, the first instalment being payable in 1947 and the last in 1952. None of these instalments was paid and an application for realising them by execution was made on 26/08/1957. In the meantime a petition for winding up the appellant bank had been presented on 11/05/1948 and an order for winding up had been made on 3/08/1948. Since then the appellant bank has been in the course of winding up. The application for execution was made by the liquidator in the course of the winding up. Under Art. 182(7) of the First Schedule to the Limitation Act 1908 an application for execution is barred if not made within three years from the date on which the amount sought to be realised was payable under the decree. On 30/12/1953, s. 45-O was introduced in the Banking Companies Act, 1949 by the Banking Companies (Amendment) Act, 1953. Ss. (1) of that section is in these terms: S. 45-0. (1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 or in any other law 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. The appellant bank claims that this section saves its application for execution from the bar of limitation imposed by Art. 182(7). The respondents' answer to this contention is first that s. 45-O has no retrospective operation; it does not revive a debt which was already barred at the date of its enactment. Then they say that all the instalments fell due on 29/04/1948 by the operation of the default clause and therefore, they were all barred under Art. 182(7) by 30/12/1953 when s. 45-O was brought on the statute book. Thirdly they say that if it is held that the default clause gave the appellant bank an option which it had not exercised and the right to apply for execution in respect of the instalments arose on the dates they respectively fell due, the instalments which fell due on December 30 of the years 1947, 1948 and 1949 had become barred before the date of the enactment of s. 45-0 and that section could not revive them and the instalments which fell due in the years 1948, 1949, 1950, 1951 and 1952 were not saved from the bar of limitation by s. 45-0 as it provided for exclusion of a period commencing from the presentation of the petition for winding and was, therefore, confined to cases where the right had arisen before such presentation, which the right in regard to these instalments had not. First, as to the effect of the default clause, no real difficulty arises. It obviously gave an option to the appellant. As was said in Ram Culpo Bhattacharji v. Ram Chunder Shome(1), 'The proviso by which the whole amount of the decree becomes due upon default in payment of any one instalment is a proviso which, look at it how you will, is put in for the benefit of the creditor, the decree-holder, and his benefit alone; and when a proviso is put into a contract or security, and in 'security' I include 'decree,' for the benefit of one individual party, he can waive it, if he thinks fit.' There is not the least doubt that the default clause in the case in hand was intended for the benefit of the appellant bank; the clause had no operation till the appellant bank wanted to take advantage of it. The High court took that view and with that I am in full agreement. The High court further held that the appellant bank had not exercised the option to enforce that clause. Bachawat J. expressly said that the appellant 'in fact has waived the benefit of that option.' The learned chief justice held in view of the option, that 'the starting point of limitation will be the dates On which each instalment became due.' He could have held this only in the view that the option had not been exercised. None of the parties appears to have contended to the contrary in the High court. This being a question of fact it cannot be raised for the first time in this court. On such a question of fact, the High court's finding is binding on us. Furthermore, undoubtedly if the respondents wished to contend that the option had been exercised, it was for them to have given evidence of such exercise but they did not do so. No such evidence has been brought to our notice from the records of the case. It has, therefore, to be held that the right to apply for execution in respect of the instalments under the decree arose on the dates on which they respectively fell due. The next question as to whether s. 45-0 (1) has a retrospective operation is of real difficulty. Having. given the matter my most anxious consideration, it seems to me that the better view would be to hold that it has such an operation. The general rule no doubt is, as was stated by Wright J. in In re. Athlumney,(1) 'Perhaps no rule of construction is more firmly established than this--that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.' It can no doubt be argued with force that no violence will be done to the language used in sub-s. (1) of s. 45-O if it is read as applying only to cases where the right to apply has not become barred at the date of its enactments. But there are other considerations. Two reasons have operated on my mind to lead me to the conclusion that the general rule should not be applied in the present case. First, it is recognised that the general rule is not invariable and that it is a sound principle in considering whether the intention was that the general rule should not be applied, to 'look to the general scope and purview of the statute, and at the remedy sought to be applied, and consider what was the former state of the law and what it was that the Legislature contemplated.': see Pardo v. Bingharn(2). Again in Cries on Statute Law, 6th ed., it is stated at p. 395, 'If a statute is passed for the purpose of protecting the public against some evil or abuse, it may be allowed to operate retrospectively, although by such operation it will deprive some person or persons of a vested right.' To the same effect is the observation in Halsbury's Laws of England, 3rd ed., vol. 36 p. 425. This seems to me to be plain commonsense. In ascertaining the intention of the legislature it is certainly relevant to enquire what the Act aimed to achieve.. In Pardo v. Bingham(2) a statute which took away the benefit of a longer period of limitation for a suit provided by an earlier Act was held to have retrospective operation as otherwise it would not have any operation for fifty years or more in the case of persons who were at the time of its passing residing beyond the seas. It was thought that such an extraordinary result could not have been intended. In R.v. Vine(3) the words 'Every person convicted of felony shall for ever be disqualified from selling spirits by retail ...... and if any person shall, after having been so convicted, take out or have any licence to sell spirits by retail, the same shall be void to all intents and purposes' were applied to a person who had been convicted of felony before the Act was passed though by doing so vested rights were affected. Melior J. observed (pp. 200-201). 'It appears to me to be the general object of this statute that there should be restraints as to the persons who should be qualified to hold licences, not as a punishment, but for the public good, upon the ground of character ... A man convicted before the Act passed is quite as much tainted as a man convicted after; and it appears to me not only the possible but the natural interpretation of the section that any one convicted of felony shall be ipso facto disqualified, and the licences, if granted, void.'
(3.) NOW the object of the present Act is beyond doubt. It is well known that prior to 1949 in our country a large number of mushroom banks had come into existence and were in the control of persons not very scrupulous or competent. Many banks came to grief and failed with the result that the depositors largely lost their moneys. It was with the object of giving relief to these innocent depositors that the original Act of 1949 and the Acts amending it were passed. A few of the S. may be referred to by way of illustration. Section 43 of the Act provides that every depositor shall be deemed to have proved his claim for the amount shown in the books of the bank until the liquidator showed reasons for doubting the correctness of the entry. Section 43A gives a right to preferential payment upto a sum of Rs. 250.00 to such depositors. Indeed in Joseph Kuruvilla Vellukunnel v. The Reserve Bank of India) it was observed by this court at p. 656, 'the whole intend (sic.) and purpose of that Act is to secure the interests of the depositors.' There need now be no doubt about the object of the Act. One of the methods by which that object can be achieved clearly is by extending the period of limitation for the enforcement of the claims of a bank in liquidation so that more money may be collected for payment to the depositors. That is why s. 45-O and its predecessor s. 45-F had been enacted. Both extended the existing period of limitation in regard to claims by a bank against its debtors. That being so, it would be natural to think that the largest extension which the language used is capable of giving was intended. Then I find 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. The object would be better achieved by applying the section to both classes. I, therefore, think that the Act was intended to have a retrospective operation. The other reason why I think that sub-s. (1) of s. 45-0 has a retrospective operation is provided by the terms of sub-s. (3) of that section. Retrospective operation is of course a question of the intention of the legislature and that intention has to be gathered from the whole statute. The two Ss. have, therefore, to be considered together: see Barber v. Pigden(1) and Hutchinson v. Jauncey (3). How sub-s. (3) is in these terms: 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 expressly makes sub-s. (1) applicable to a banking company being wound up on a petition presented before the amending Act. That would indicate that the first Ss. was intended to apply to suits and applications by a banking company in liquidation even where the winding up petition had been filed before the amending Act. It should, therefore, apply to all such suits or applications even when they had become barred before the amending Act. Again it is indubitable that as a result of the third subsection a period which had started to run before the amending Act is to be excluded under the first sub-section. The third subsection gives no hint that such exclusion is to be confined to cases where the right had not become barred before that Act. 1t expressly gives the first Ss. a retrospective operation by permitting exclusion of an antecedent period. All this is strong indication that sub- s. (1) is to have a retrospective operation. If that is not the intention, then it is clear to me that sub-s. (3) need not have been enacted at all for clearly the first sub-.section would by its own terms have applied to cases of winding up on a petition presented before the amending Act. It applies to all banking companies being wound up and. therefore, also to such companies as are being wound up on a petition presented before that Act. It could be said that even then the first Ss. not have a retrospective operation but would only apply prospectively to a banking company being wound up on a petition presented before the Act. This may be illustrated by two cases. In R.v. St. Mary, Whitechapel (Inhabitants)(1) Lord Denman C.J. said that a statute 'is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing.' Again in Master Ladies Tailors Organisation v. Minister of Labour and National Service(2) it was observed, 'The fact that a prospective benefit is in certain cases to be measured by or depends on antecedent facts does not necessarily ...... make the provision retrospective.' ;