9911796707
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Issues:
- Applicability of limitation period for applications made by a banking company in liquidation. - Whether a liquidator can recover debts from debtors of a banking company through summary proceedings or must file a suit. Analysis: The judgment concerns an application made by the liquidator of a bank in liquidation against customers who owed the bank a significant sum on an overdraft account. The primary issue was the period of limitation applicable to such applications and the method of debt recovery by the liquidator. The Banking Companies Act, specifically section 45F, excludes the one-year period immediately preceding the date of the order for winding up of the banking company from the limitation period for suits or applications. The court deliberated on whether the Indian Limitation Act would be applicable to such applications. The court concluded that the liquidator cannot recover debts from the bank's debtors through summary proceedings but must initiate a suit for recovery. The period of limitation for such a suit is three years from the date the money became due, excluding the period specified in section 45F of the Banking Companies Act. The judgment highlighted that while the Companies Act provides for the recovery of debts from contributories without the need for a suit, there is no provision allowing a liquidator to recover debts from a bank's debtors through summary proceedings. The court emphasized that the liquidator must resort to the ordinary method of recovery, which is by filing a suit. The court rejected the argument that applications could be made to the Company Judge for the recovery of debts, emphasizing that such applications are not permissible under the existing legal framework. The judgment also acknowledged the suggestion by the liquidator's counsel to frame rules permitting debt recovery through applications instead of suits, citing the heavy costs involved in filing numerous suits for small claims. In conclusion, the court dismissed the application made by the liquidator for debt recovery from the bank's customers through summary proceedings. The court emphasized the necessity of bringing a suit for debt recovery and highlighted the absence of provisions allowing for recovery through applications. The judgment did not award costs, allowing the liquidator to recover costs from the assets. Both judges, Harries, CJ, and Banerjee, J, concurred with the decision to dismiss the application.
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