BANK LIMITED IN LIQUIDATION Vs. SARKAR DUTT ROY AND CO

JUDGEMENT

(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.

(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.