TMI Blog1984 (4) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits with M/s. Mansa Ram Sons:-- I. Fixed Deposit Account:--Deposit cf Rs. 10,300/- dated 7th July. 1954, for the period oi July 5, 1954 to July 5, 1955 carrying interest @ 3% p.a. II. Fixed Deposit Account--Deposit of Rs. 13,390/- dated 7th July, 1954, for the period of August I, 1954 to August 1. 1955 carrying interest @ 3% p.a. III. Current Account:-- Deposit of Rs. 10,000/- dated March 18, 1955 and of Rs. 15/- dated March 22. 1955 bearing interest @ 6% p. a. IV. Savings Bank Account:--Balance of Rs. 708/4/- dated April 2, 1955 in the account commencing on March 24, 1954. The deposits mentioned at items I to III aforesaid were made by respondent No. 1, that is to say, the firm Janki Dass Om Prakash, and the deposit at Item No. IV was made by Om Prakash, respondent No. 2, who is a partner of this firm. The deposits were acknowledged from time to time. Respondent No. 2 made demand of the amount due under these deposits in the month of July. 1971 at Dehra Dun, but the appellants Nos. 2, 4 and Sri Mander Dass deceased, the Managing partners of the firm, Mnnsa Ram Sons, expressed inability to pay. The payment of their debts was suspended. On June 2, 1971, certain i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding the petition made on July 20, 1971 and this was an act of insolvency on the part of the appellants within the meaning of Section 6(c) of the Act. Respondent No. 3 was also a partner and admitted as such. Sri. S.N. Misra, appearing for the Official Receiver, pointed out that the appellants are indebted to the tune of several lacs and the properties were dissipated by them to defeat or delay the creditors. 6. Taking up the first contention of the appellants that the return of the deposits made with them was barred by limitation, it is submitted that the acknowledgment could not avail the respondent creditors. From the material placed on record it would appear that Kailash Chand, one of the partners of the firm Mansa Ram Sons, acknowledged and admitted the deposits referred to above as items Nos. 1 and 2 in writing under his signature on June 4, 1958, endorsing under his signature for self and general attorney of Lala Mahabir Pd, Sri Mandar Dass and Moti Lal. Thereafter on June 2, 1961 and June 1, 1964, he admitted and acknowledged the liability under these deposits under his signature with the endorsement "for self and general attorney of Shri Mander Dass". On May 30. 1967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal acknowledgment by one partner will, it is apprehended, be regarded as an acknowledgment by the firm. In the first endorsement dated 4-6-1958, relating to items 1 and 2 and the endorsement dated 2-4-1958 in items 3 and 4, Kailash Chand acknowledged and admitted the liability under his signature describing this as being "for self and as General Attorney of Lala Mahabir Pershad, Shri Mander Dass and Moti Lal". The endorsement dated 2-6-1961 and 1-6-1964 in items Nos. 1 and 2 and the endorsement dated 1-4-1961 and 30-3-1964 in item No. 3 as also the endorsement dated 2-6-1960 and 1-6-63 in item No. 4 were described by Kailash Chand as being "for self and as General Attorney of Shri Mander Dass". The last endorsement dated 30-5-1967 relating to items 1 and 2 and that dated 28-3-1967 and 30-5-1966 concerning items 3 and 4 were, however, made by Kailash Chand for self alone without any specification as to the same being for or on behalf of the firm or the remaining partners. Considered in the entire context it is arguable that in the last endorsement in any case Kailash Chand did not purport to acknowledge the liability of the firm as such or of the co-partners. Wherever he intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hdrawn before due date and is payable on or after the due date subject to two months' previous notice on the receipt being returned bearing the endorsement of the depositor." 11. The other receipt for Fixed Deposit (Item No. 2) is in the same form the only difference being that this is for the sum of Rs. 13,390/- and the period specified is August 1, 1954 to August 1, 1955. The note appears in identical terms on the reverse of this receipt also. 12. Article 21 is applicable to loans and the period of limitation runs from the date when the loan is made. In case the money is a deposit under an agreement that it shall be payable on demand then Article 22 applies and the limitation starts from the date when a demand is made for payment. The terms 'loans' and 'deposit' are not mutually exclusive. The test formulated is "whether on the admitted facts in the case there was an obligation on the appellant to "seek out" the respondent and repay him, or whether he was to keep the moneys till the respondent asked for them.'' Vide Mohd. Akbar Khan v. Attar Singh (AIR 1936 PC 171) Suleman Haji v. Haji Abdulla. (AIR 1940 PC 132); Jagannath Pd v. Mst. Ram Dularey, (AIR 1956 All 63). The Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of the agreement relating to the demand, on making of which the deposit will become repayable. In other words, unlike a loan there is no immediate obligation to repay in the case of a deposit. That we think is the essence of the distinction between a loan and a deposit. This view of ours is supported by the observations of the (Privy Council in 63 Ind 279 : (AIR 1836 PC 171)-" 15. A similar matter came up before Patna High Court in Firm Nokhilal Sarju Prasaci v. Bibi Mojihan (AIR 1939 Pat 261) wherein Fazl Ali J. (as he then was) observed that after the expiry of the fixed period, the amount deposited was to be deemed payable as demanded by the depositor and the claim for recovery of the money was governed by Article 60 of the Old Limitation Act 1908 (Corresponding to Article 22 of the new Act). In Jammu and Kashmir Bank v. Nirmala Devi (AIR 1959 J K 85) also it was held that the essential character of the deposit as a deposit does not change even if it be for a fixed term. To the same effect is the, view taken in the Hindustan Commercial Bank Ltd. v. Jagtar Singh (AIR 1974 P H 208). We arc in respectful agreement with this view. 16. Applying this test it will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawal. Limitation commenced when the depositor made the demand. Each of these Items Nos. 3 and 4 is of more than Rs. 500/-and so even if on ground of limitation or otherwise the deposits under Items 1 and 2 are ignored the maintainability of the petition under Section 9 of the Act is not adversely affected. 18. Sri Radha Krishna contends in the alternative that the claim of the respondent-creditors for return of the depositors is premature. He has based this argument upon the last endorsement dt. May 30, 1967 appearing on the Fixed Deposit receipts (Ex. 4/5) and the endorsement dated March 28, 1967 and May 30, 1966 on the Current Deposit and the Savings Bank Account Pass Books respectively (Ex. 6/7) wherein it is said "admitted subject to payment of the amount due on 6-6-55 in 16 years from termination of insolvency". It appears that certain creditors namely, Anoop Singh and others had earlier petitioned for these appellants being adjudged insolvents. That was registered as Insolvency case No. 1 of 1955. An interim receiver was also appointed therein. That proceeding terminated by order of this Court dated April 22, 1960 in First Appeal From Order 415 of 1958. The submission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay their debts. As provided in Section 6(e) of the Act a debtor commits an act of insolvency "if any of his property has been sold in execution of the decree of any court for the payment of money" provided further that as required by Section 9(1)(c) the act of insolvency on which the petition is grounded has occurred within three months before the presentation of petition. Evidence on the record shows that in Original Suit No. 82 of 1957 Bhagwan Das and others obtained decree for money against M/s. Mansa Ram and Sons and the partners. This decree was put to execution in Execution Case No. 33 of 1970 vide Ex. 3. In execution certain immovable properties of the partnership firm were sold in auction on June 2, 1971 as is revealed from the report of the Court Amin (Ex. 1). No objection was filed by the judgment debtors and on July 3, 1971 the sale in execution was confirmed by the I Additional Civil Judge, Dehradun vide certified copy of the order (Ex. 2). The petition under Section 9 being presented on July 20, 1970 this was within three months preceding. It is rightly contended for the respondents that this sale in execution of the decree against the firm constitutes an act of insol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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