TMI Blog1990 (2) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... the said invoices were due on expiry of the period of one month of the date on which the goods were sold and the defendants were liable to pay to the plaintiffs interest at the rate of 20% per annum on the amount outstanding as mutually agreed. The plaintiffs also claim that the defendants made part payments of ₹ 50,000/- on 4-3-1983 and ₹ 1,00,000/- on 15-3-1983 leaving balance of ₹ 61,135.65 p. due and payable by the defendants to the plaintiffs being the price of the said goods sold and delivered to them. The plaintiffs in para 13 of the plaint state that their suit is within limitation as defendants have condoned and waived their plea of limitation by an acknowledgement of liability to pay the amount to the plaintiffs and by entering into consent terms and submitting to a consent order in Appeal No. 838 of 1986 which was carried against the conditional order passed by Parekh, J. in the Company Petition filed by the plaintiffs seeking an order of winding up of the defendants Company on the ground that the defendants Company was unable to pay its debts by non-compliance of the notice under Section 434 of the Companies Act within the period prescribed. The plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned Counsel appearing on behalf of the plaintiffs, contended that the plaintiffs filed a Company Petition after giving a notice under Section 434 of the Companies Act on 4-9-1985 as the defendants failed to pay the amounts within the period prescribed and on 4-9-1985 when the said petition was filed, admittedly the debt was not time-barred. Mr. Shah further contended that initially the Company Petition was admitted though condition and he invited my attention to the order passed in the said petition by Parekh, J. The order passed is as under:-- P.C. : In the event of the Company depositing in Court the sum of ₹ 20,000/-within a week from today, the Petition to stand dismissed. If such deposit is made then; (a) The Company's advocate to forthwith intimate to the Prothonotary and Senior Master and the Petitioner Advocate the fact of such deposit; (b) The Petitioner to be at liberty to file a suit in the appropriate Court for recovery of the amount in petition to the Petitioner; such suit to be filed within 8 weeks from the date of intimation that the deposit has been made; (c) The amount of such deposit then made to stand credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period according to the said Section. The said Section runs as under:-- 15(3). In computing the period of limitation for any suit or application for execution of a decree by any receiver or interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional liquidator appointed in proceedings for the winding up of a company, the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator, as the case may be, shall be excluded. According to Mr. Shah, as a proceeding has been filed for winding up of the Company of the defendants by the plaintiffs and the same can be said to have been conditionally admitted by the Court, the plaintiffs would be entitled to the exclusion of the period as laid down in the said provision. As against this, on behalf of the defendants it is contended that there is no question of waiver of limitation or estoppel against limitation. It is also contended on behalf of the defendants that the consent terms or the order passed on consent terms cannot be considered as an acknowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount within the prescribed period, the petition would stand admitted. Similarly, it also provided that if no suit, as stated in the order, was filed by the present plaintiffs, the defendants were at liberty to withdraw the amount deposited by them in the Court. Now, therefore, we have to find out as to whether the said consent terms on the basis of which the consent order came to be passed by the Appeal Court confirming the order passed by the Original Court could be considered as an acknowledgement of a debt in terms of Section 18 of the Limitation Act. Section 18 of the Limitation Act speaks about acknowledgement in writing and the effect of the same. It runs as under:-- 18(1). Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. It is not necessary to reiterate here Subsection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 20,000/- and in the event of their depositing the amount in the Court, the petition would stand dismissed and the plaintiffs were to file the suit in the Court of law to recover the amounts due to them. It is only that the defendants by consent terms agreed before the Appeal Court that the said order should be confirmed. The said order accordingly was confirmed on 10-10-1986 in view of the consent terms given by the plaintiffs and the defendants on 7-10-1986. The consent terms are - (1) By consent the order dated 30th July 1986 confirmed. (2) The time for deposit and filing of suit extended by two weeks from today and 10 weeks from today respectively. (3) No order as to costs. These consent terms by no stretch of imagination could be considered as acknowledgement of the debts by the defendants. It is also clear that ultimately as per the said consent order' the amount of ₹ 20,000/- was deposited by the defendants and the plaintiffs also accordingly filed a suit as per the consent order which was confirmed in the Appeal Court. Now mere fact of depositing the amount of ₹ 20,000/ - as per the direction of the Court by the defendants can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid amount to the plaintiffs and by entering into consent terms and submitting to a consent order in the said Appeal whereby time to file the suit by the plaintiffs pursuant to the order dated 30-7-1986 was extended by a period of 10 weeks from 10-10-1986. Reading the said contention raised in para 13 of the Plaint, it is clear that the said plea of waiver is based on the consent terms dated 10-10-1986 on the basis of which the consent order confirming the Original Court's order came to be passed. I have already reproduced the consent terms earlier and by no stretch of imagination it could be considered to be a waiver of the ground of limitation. By consent terms only the order passed by the Lower Court was agreed to be confirmed. Similarly, the time which was granted earlier by the Trial Court for the depositing of the amount specified in the order and filing of the suit was extended. This also by no stretch of imagination can be said to be a waiver of ground of limitation on the basis of which the suit for recovery of the debts due to the plaintiffs could be said to have been barred by limitation. Apart from this, there is catena of decisions on the basis of which it co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Appeal Court was of the opinion that the debts were not time-barred. If the winding up order would have been passed then probably one could say that the said order would relate back to the date of the filing of the Petition. But in the present case, in fact there is no order passed of winding up at all. On the contrary, as the conditional order was satisfied by the defendants by depositing ₹ 20,000/-, the petition of the plaintiffs stood dismissed. Therefore, the plaintiffs cannot get any advantage on the said basis. It is also tried to be contended that by consent order the Appeal Court granted further time to the plaintiffs to file the suit and, therefore, in the extended period granted by the Court the suit cannot be held to be barred by limitation. Now extension of time to file the suit has in fact no relevance. Court cannot extend period of limitation by granting any extension of time. Apart from this, it is clear in the present case that it was necessary for the Court to extend the time given by the Original Court as, if it was not so extended, the defendants would have been entitled to lift the amount they were ordered to deposit. As per the order of the Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire period which was lost in prosecuting the said proceeding before the Court in Company Petition. Now in fact all the facts that are necessary for submissions required to be made in respect of the provisions of Section 14 of the Limitation Act definitely do not appear to have been made out in para 13 of the Plaint. However, even if some benefit is to be given to the plaintiffs in this respect and the contents of para 13 are stretched to mean that the plaintiffs claim the benefit of Section 14 of the Limitation Act, it is also necessary to consider as to whether the plaintiffs would be entitled to the benefit of the same. Section 14 of the Limitation Act runs as under:-- 14(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be no exclusion under Section 14 of the Limitation Act of time occupied by the insolvency proceedings against the judgment-debtor, in computing the period of limitation for executing a decree against him, as the proceedings are not for obtaining the same relief. It may be that ultimately in the insolvency proceedings the decree-holder may be able to realize his debt wholly or in part, but this is a mere consequence or result. Not only is the relief of a different nature claimed in the two proceedings but the procedure is also widely divergent. The said observations would also squarely apply to the present facts of the case. In the present case, in the Company Petition the plaintiffs had asked for winding up of the Company and, therefore, the observations made in the said decision by the Supreme Court definitely would apply and, therefore, the contention tried to be raised now before me that the plaintiffs are entitled to the exclusion of the time in view of Section 14 of the Limitation Act cannot be considered as having substance. In AIR1958MP91 , relied upon by the defendants, it is also stated that Section 14 of the Limitation Act speaks of the inability of the Court to enterta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied, for giving benefit of the said Section 14(1) the Court must not have been able to entertain the proceeding for the reason of defect in jurisdiction or cause of a like nature. Supreme Court in [1977]2SCR250 held that for proper interpretation of words or cause of a like nature the said words or clause would be required to be considered ejusdem generis with earlier words of defect in jurisdiction and therefore where the Court had jurisdiction to entertain the Company Petition, but for some other reason it does not do so, it cannot be said that the Court did not grant the application due to defect similar to the want of jurisdiction. In the result, Section 14 of the Limitation Act has no application to the facts of the present case and, therefore, the time that was spent in prosecuting the Company Petition by the plaintiffs cannot be excluded while computing the period of limitation. Even if the plaintiffs were pursuing a remedy of winding up proceeding under the Company Law, they ought to have filed suit for recovery of the amount due to them within the period of limitation. 13. I have already observed above that unless the period of limitation is extended due to some re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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