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TMI Blog1972 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... was appointed the liquidator of the Punjab Commerce Bank Ltd. by the order of the High Court. He held that office for nearly 17 years and resigned the same on November 3, 1967, when the present applicant was appointed in his place. Earlier, the respondent, on February 2, 1957, had made an application in the High Court seeking its sanction for preferential payments to small depositors in the savings bank account up to a sum of Rs. 100 in accordance with the provisions of section 43A of the Banking Regulation Act, 1949. Chopra J ., by an order dated February 8, 1957, accorded the requisite sanction and it is the applicant's case that these payments were made to the small depositors from the years 1957 to 1966. Reliance has then been placed on the provisions of section 244B of the Act for averring that the respondent was bound by its provisions to deposit the unclaimed dividends payable to any creditor within 6 months after the date on which they became payable or refundable into an account to be called the companies liquidation account in the Reserve Bank of India. It is averred that the respondent, instead of depositing the balance of the amount after the expiry of six months fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndistributed assets refundable to any contributory in the hands of the respondent. It is stated that payments to small depositors by virtue of section 43-A of the Banking Companies Act does not amount to any declaration of dividend and, therefore, no question of any unclaimed dividends in his hands arises. In reply to paragraph 8, it is stated that as the amount payable to small depositors were paid under the authority of the order of the High Court, dated February 8, 1957, the same cannot be questioned so long as the main order of the hon'ble liquidation judge stands and has not been assailed. It is further pointed out that the dividends declared by the respondent were with the sanction of the High Court after submitting all the figures necessary for the purpose and which included the amount of Rs. 19,054 in the respondent's hands. Paragraph 11 of the petition has been characterised as vague and incapable of an accurate reply because it has not been pointed out as to who are the creditors to whom the loss alleged has been caused or, further whether any applications or representations were received by the applicant in this respect. It is further stated that the amount of Rs. 19,054 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misapplication, retainer, misfeasance or breach of trust in respect of this amount under section 235 of the Indian Companies Act, 1913 ? No other issue was claimed by the learned counsel for the parties. It was also agreed that the first three issues would be tried as preliminary issues. Parties were allowed full opportunity for adducing evidence in support of their respective cases as regards the three preliminary issues. Documents were filed on behalf of the parties which were admitted by their learned counsel. The respondent, Shri R. N. Virmani, put himself in the witness box. Thereafter, the evidence on the preliminary issues was closed on his behalf on October 23, 1972. Mr. Roop Chand on behalf of the respondent in support of his argument under issue No. 1 contends that the present application filed on the 28th of October, 1970, is clearly barred by time, It is contended that the same has been obviously presented far beyond the prescribed period of three years when the first liquidator of the bank was appointed by the order of the court. In the alternative it has been argued that on the applicant's own averments this application is being made beyond a period of three year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the misapplication, retainer, misfeasance or breach of trust by the delinquent, as the case may be. The statute has further provided that the period applicable would be one which is longer in relation to the two termini prescribed. For clarity, it is desirable to examine the two limbs of the argument raised by Mr. Chaudhry separately. It has first been rightly contended that admittedly the first regular liquidator in the winding-up of the Punjab Commerce Bank Ltd. was the respondent himself who was appointed on the 11th of October, 1950. On this factual premises it has been meritoriously contended that a plain grammatical construction of section 235 implies that the limitation in this context would begin from the first appointment of the regular liquidator for winding-up and is wholly unaffected or unconcerned by the appointment of the subsequent liquidators who may come to take his place. Mr. Keer on behalf of the applicant has rather ingeniously suggested that the period of three years should run from the date of the appointment of a liquidator irrespective of the fact whether it is first, second or third appointment. He contends that unless such a strained construction wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t second official liquidator on the 3rd of November, 1967). Indeed, in a case of the present kind, where the alleged act of misfeasance is far beyond the period of three years from the first appointment of the liquidator, the invocation of this part of section 235 on behalf of the applicant is not at all tenable. I take the view that the appointment of the second, third or the fourth regular liquidator is irrelevant to the issue and the present application, therefore, would be clearly incompetent in view of the bar of limitation. The second limb of the argument of Mr. Chaudhry has not been seriously opposed or contested by Mr. Keer. As already noticed it has been argued on behalf of the respondent that on the applicant's own averment this application is being made beyond a period of three years from the specific date of the alleged misapplication, retainer or misfeasance. Now the sanction for the payment to small depositors by the High Court was admittedly given on 8th February, 1957. If section 244B is attracted then after a period of six months therefrom the liability to deposit the same in the companies liquidation account would arise. The alleged act of misfeasance, retainer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same. Issue No. 3, therefore, also must be decided in the applicant's favour and it is held that the present official liquidator has no locus standi to present this application. In view of my decision on issues Nos. 1 and 3, it is unnecessary to advert to the preliminary issue No. 2 which becomes more or less academic in this context. In fairness, however, to Mr. Roop Chand Chaudhry, it only needs be noticed that he had sought to contend that the amount of Rs. 19,054 cannot even be deemed to be an unclaimed dividend as mentioned under section 244B. As already said, I, however, deem it unnecessary to advert to this aspect of the case because the respondent succeeds on two of his preliminary issues. Before parting with this judgment it deserves notice that the common case of the parties before me is that not a penny has been misappropriated or converted to his own use by the respondent. Admittedly, the whole of the amount of issue was tendered over in court and was thereafter disbursed amongst the creditors under the authority of the orders passed by the hon'ble the company judge. The issue was merely a technical one whether the amount should have been deposited in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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