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TMI Blog1973 (8) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by an order of B. C. Mitra J. by consent of parties in accordance with certain terms of settlement filed in court. It will be necessary for the purpose of this appeal to set out some of these terms in extenso: "(i) The company admits that a sum of Rs. 38,000 on account of principal and Rs. 12,519 as interest up to October, 1965, is due to the petitioning-creditor. The company also admits that it is liable to pay the petitioning-creditor's interest on the principal amount at 9% per annum from November, 1965, till payment. The company hereby creates a floating charge on all its presents as per schedule below and future fixed assets as a first charge. (ii) The company will pay the entire dues of the petitioning creditor as aforesaid within 31st March, 1969. The company will pay Rs. 10,000 within 4th April, 1966, and in respect of the balance the company will pay a sum of not less than Rs. 6,000 every six months, first of such payment is to be made on or before the 31st October, 1966, but the company in any event will pay out of the half yearly amount of Rs. 6,000 mentioned above a sum not less than Rs. 500 per month. First of such monthly payments is to be made on or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the court that the security was insufficient to cover his debt; (2) the claim of the petitioning-creditor had become at the material time barred by limitation and, in that view of the matter, the claim on the basis of which the winding-up application has been made is a claim not enforceable in law. The learned judge held on good authority that a secured creditor is entitled to make an application for winding up, and in doing so, it was not necessary for him to satisfy the court that the security was inadequate. On the other question, the learned judge held that the petitioning creditor was entitled to waive and had waived the stipulations for payment in installments on the due dates. In that view of the matter, the learned judge found that the date of limitation commenced from 31st March, 1969, by which date the company was liable to pay the entire dues of the petitioning-creditor in terms of the consent order. The application for winding up having been made on the 18th May, 1971, no question of limitation arose and the learned judge, therefore, held against the appellant on that point. Mr. P. K. Sen appearing on behalf of the appellant submitted before us that an application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in winding-up proceeding under the Companies Act, 1956. Section 634 of the Act of 1956 provides that any order made by the court under that Act may be enforced in the same manner as a decree made by the court in a suit pending therein. The order is, therefore, as we have indicated, fully enforceable by execution at any time within a period of 12 years from the date of default. So long as the respondent's claim under the order of April 4, 1966, is enforceable in law, the respondent on the basis of that claim is entitled to present and prosecute an application for winding up, which he has done. In our opinion, the question of waiver is immaterial in this case. The period of limitation being 12 years under article 136, the respondent in prosecuting the application for winding up is fully within the period of limitation irrespective of any waiver on the part of the respondent of any of the stipulations for payment of installments made in his favour in the terms of settlement. In other words, even on the basis that there has been no waiver by the respondent of any of the terms, the claim is not barred by limitation. Mr. Sen submitted before us that the order having been an order by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court gives to creditor against a company unable to pay its debts". This passage was cited with approval and relied on by the Supreme Court in Harinagar Sugar Mills Co. Ltd. v. M. W. Pradhan, Court Receiver, High Court of Bombay [1966] 36 Comp. Cas. 426 ; [1966] 60 I.T.R. 508; A.I.R. 1966 S.C. 1707. In that view of the matter if an application is made for enforcement of payment of a debt by a winding-up application, and in an application by the company for stay of winding up a payment order is made by consent, on the basis of which a stay is granted, it can hardly be contended that the order for payment is not related to the application for stay of winding up. We are unable to agree that a consent order for payment in such an application is outside the scope of Order 23, rule 3, of the Code. In the Division Bench judgment to which reference has already been made, Banerjee J. observed with reference to the case of Manindra Nath Biswas v. Radhasyam Biswas A.I.R. 1953 Cal. 676 as follows: "A consent decree for money which provides for security of the decretal debt payable by instalments may be treated as operative part of the decree and may not be quite unrelated to the suit". Havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re vexatious and mala fide. They are vexatious because two winding-up proceedings have previously been initiated and not proceeded with. Moreover, it was contended that instead of trying to execute the order for payment in the usual course, the respondent used the winding-up proceedings for the purpose of enforcing its claim under the order. We are unable to hold that the application is mala fide only because similar applications have been withdrawn by the respondent. To say so will be to render the leave of the court by which the petitioning-creditor was entitled to initiate fresh winding-up proceedings nugatory. As regards the argument that the respondent should have executed the order instead of coming to the winding-up court all that is necessary for us to say is that the choice is his. In that view of the matter, this contention of Mr. Sen must also fail. Finally, it was contended that the application for winding up is barred by limitation. The relevant article, counsel claimed, is article 137 of the Limitation Act which reads: "Part II-O ther applications. Description of suit Period of limitation Time from which period begins to run 137.Any other application for which n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Code of Civil Procedure, 1908. Three years When the right to apply accrues". The similarity between the text of article 181 of the Act of 1908 and article 137 of the Act of 1963, substantial though it is, has to be considered in the context of the respective Acts and the history of legislation on the law of limitation. The preamble to the Act of 1908 is in these terms: "Whereas it is expedient to consolidate and amend the law relating to the limitation of suits, appeals and certain applications to courts". The Act of 1963 has hardly any preamble. Its long title reads: "An Act to consolidate and amend the law for the limitation of suits and other proceedings and for purposes connected therewith". Under the provisions of section 2 of the Act of 1963 "applicant" includes "petitioner" and "application" includes "petition". In the Statement of Objects and Reasons it is stated in respect of clause (2) of the Bill, which became section 2 of the Act: "Clause 2.-A new definition of 'application' is inserted so as to include a petition, original or otherwise. The object is to provide a period of limitation for original applications and petitions under special laws as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in Ram Kumar Kajaria v. Chandra Engineering ( India) Ltd. A.I.R. 1972 Cal. 381, where M. M. Dutt j. held that article 137 is not restricted to applications under the Code of Civil Procedure but also applies to applications and petitions under other enactments. Had the matter been res integra we should have had no hesitation in holding that article 137 is fully applicable to an application for winding up under the Companies Act. But it seems to us that we are not free to do so having regard to a decision of the Supreme Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court [1969-70] 36 F.J.R. 177, 188; [1970] 1 S.C.R. 51; A.I.R. 1969 S.C. 1335, to which attention of the learned single judges who decided those cases does not appear to have been drawn. In the Supreme Court case it was observed: "The language of article 137 is only slightly different from that of the earlier article 181 inasmuch as, when prescribing the three years' period of limitation, the First column giving the description of the application reads as 'any other application for which no period of limitation is provided elsewhere in this division'. In fact, the addition of the word ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or not". To doubt the correctness of a decision is not to overrule it and the decision in Town Municipal Council's case (supra) still holds sway. It must, therefore, be held that the position at present is that article 137 does not apply to applications for winding up of a company under the Companies Act, 1956. In that view of the matter it is not necessary for us to consider the arguments advanced at the Bar as to when the right to apply accrues except to point out that a petition for winding up has to be presented within the period the debt is recoverable in law in cases where the ground for winding up is the inability of the company to pay its debts. An alternative argument was sought to be built up on the basis that an application for winding up of a company under section 434 of the Companies Act is an application under the provisions of the Code of Civil Procedure, a proposition in support of which counsel drew sustenance from a decision of a Special Bench of this court in Asmatali Sharip v. Mujaharali Sardar A.I.R. 1948 Cal. 48 [F.B.]. Counsel referred to section 643 of the Companies Act which confers power on the Supreme Court to make rules providing for all matters rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 144 of the Bengal Tenancy Act provides for jurisdiction in proceedings under the Act. In section 10 of the Companies Act provision had been made for jurisdiction of the court in proceedings under the Companies Act. The decision of the Special Bench, therefore, applies proprio vigore to proceedings under the Companies Act and, therefore, an application for winding up under the Companies Act is an application under the Civil Procedure Code. To deal with the contention raised on behalf of the appellant, it is necessary to refer to the relative provisions of the Bengal Tenancy Act: "143. (1) The High Court may, from time to time, with the approval of the Provincial Government make rules, consistent with the Act, declaring that any portions of the Code of Civil Procedure, 1908, shall not apply to suits between landlord and tenant as such or to any specified classes of such suits or shall apply to them subject to modifications specified in the rules. (2) Subject to any rules so made and subject also to the other provisions of this Act, the Code of Civil Procedure shall apply to such suits". "144. (3) When, under this Act, a civil court is authorised to make an order on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prohibition against applicability of any portion of the said Code. This provision led the Special Bench to hold that the Code of Civil Procedure is applicable to suits under the Act and by reason of section 141 of the Code, the entire proceeding under section 26F is regulated by the Code of Civil Procedure. In our judgment, section 141 of the Civil Procedure Code does not make an application made in any court of civil jurisdiction an application under the Code. If it were so, the application for rectification of the share register in Jawahar Mills Ltd.'s case (supra), to which we have already referred, and countless applications under special enactments made before courts of civil jurisdiction should have been treated as applications under the Code and article 181 of the Limitation Act of 1908 should have been held to be applicable in those cases. The fact remains that section 141 of the Civil Procedure Code speaks merely of procedure and nothing else. The ratio of the Special Bench decision is to be found not in section 141 of the Civil Procedure Code but in section 143 of the Bengal Tenancy Act itself. In the Companies Act there is no provision for overall application of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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