1965 (4) TMI 110 - SC - Companies Law

a retrospective operation is not to be given to a statute so as to impair an existing right or obligation

Issues Involved:
1. Retrospective Operation of Section 45-O of the Banking Companies Act, 1949.
2. Application of Limitation Period to Execution of Decrees.
3. Waiver of Default Clause in the Decree.
4. Computation of Limitation Period for Execution Applications.

Detailed Analysis:

1. Retrospective Operation of Section 45-O of the Banking Companies Act, 1949:
The primary issue was whether Section 45-O(1) of the Banking Companies Act, 1949, which was introduced by the Banking Companies (Amendment) Act, 1953, has retrospective operation. The court analyzed the general rule that statutes are not retrospective unless explicitly stated or necessarily implied. However, it was noted that the general rule is not invariable and exceptions can be made based on the scope and purpose of the statute. The court concluded that Section 45-O(1) was intended to have retrospective operation to protect depositors and ensure the recovery of dues by banking companies in liquidation. The court emphasized that the section aims to extend the period of limitation for suits or applications by banking companies being wound up, thereby allowing more funds to be collected for payment to depositors.

2. Application of Limitation Period to Execution of Decrees:
The court examined whether the execution application filed by the appellant bank in 1957 was within the limitation period prescribed under the Limitation Act, 1908, considering the introduction of Section 45-O. The court noted that the section provides for the exclusion of the period commencing from the date of the presentation of the petition for winding up in computing the limitation period. The court held that the section applies to all banking companies being wound up, including those where the petition for winding up was presented before the enactment of the amendment. The court found that the execution application was within the limitation period when the excluded period was considered.

3. Waiver of Default Clause in the Decree:
The court addressed whether the appellant bank had waived the benefit of the default clause in the decree, which allowed the bank to deem all installments in default upon failure to pay any installment. The court agreed with the High Court's finding that the default clause was intended for the benefit of the appellant bank and that the bank had not exercised the option to enforce the clause. The court held that the right to apply for execution arose on the dates each installment fell due, and the bank's waiver of the default clause did not affect its right to execute the decree for each installment separately.

4. Computation of Limitation Period for Execution Applications:
The court analyzed the computation of the limitation period for the execution application under Section 45-O. The court noted that the section provides for the exclusion of the period from the date of the presentation of the winding-up petition to the date of the suit or application. The court held that the section applies retrospectively and allows for the exclusion of the entire period commencing from the date of the winding-up petition, even if the right to apply for execution arose after the presentation of the petition. The court concluded that the execution application filed by the appellant bank in 1957 was within the limitation period when the excluded period was considered.

Conclusion:
The court allowed the appeal, set aside the judgment of the appellate bench of the High Court, and held that the decree was fully executable. The appellant bank was entitled to take all steps for execution as permitted by law. The court emphasized the retrospective operation of Section 45-O and the exclusion of the period commencing from the date of the presentation of the winding-up petition in computing the limitation period for suits or applications by banking companies being wound up.

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