Summons For Judgment No.952 of 2000,IN Summary Suit No.2026 of 2000

25th July, 2002

Petitioner Counsel: Mr. SANJAY JAIN,Mr. ASHOK JAIN
Respondent Counsel: Mr. AJAY SETHI,Mr. P. PARASRAMPURIA

Cases Cited:
I.C.I.C.I. Ltd. Vs. Alpine Industries Ltd., 1999(3) ALL MR 112=1999(3) Bom.C.R. 771 [Para 3]
Siraj-ul-Haq Khan Vs. The Sunni Central Board of Waqf U.P., AIR 1959 SC 198 [Para 3]
Shunmugam Vs. Moidin, VIII ILR 229 [Para 3]
Chottay Narain Singh Vs. Kedar Nath Singh, AIR 1922 Patna 201 [Para 3]
M/s. The Chemist Vs. Ishwarlal Karsondas Kapadia, 1968(71) B.L.R. 31 [Para 3]

JUDGMENT

JUDGMENT :- The suit as filed is based on the bill of exchange dated 22-5-1996. The suit was lodged on 22-11-1999. Defendant No.1 is sued as drawer of the bill and defendant No.2 as acceptor. The drawer has waived notice of dishonour. The case of the Plaintiff is that though the amount was demanded the defendants have failed and neglected to pay the amount or part thereof and consequently the suit.

Defendant No.1 has expired. His Legal heirs are not brought on record, though defendant No.2 is one of the L.Rs. Summons for Judgment therefore, to be heard and disposed of in so far as defendant No.2 alone is concerned.

In answer to the Summons for Judgment, no reply has been filed on behalf of the defendants. Learned counsel for the Defendant however, contends that they are entitled to unconditional leave to defend the suit based on the pleadings itself as the suit is filed beyond the prescribed period of limitation. This is a case of a bill of exchange payable on demand.

On the other hand, on behalf of the Plaintiff, it is contended that the Receiver was appointed by order dated 25-9-1996 in Arbitration Petition (Lodging) No.256 of 1996. That was in a petition filed under Section 9 of the Arbitration & Conciliation Act, 1996. It is contended that the period when the Receiver came to be appointed and till he was discharged, has to be excluded. Interim relief was granted in terms of Prayer Clause (a). Pending Receiver taking possession, ad interim relief was granted in terms of Prayer Clause (b). On instructions, learned counsel for the Plaintiff states that interim relief was vacated on 15-3-2001. The present suit was filed on 22-11-1999. The suit was originally filed by the Court receiver. Subsequent to discharge of the court receiver, plaintiff has been substituted by an order dated 9-1-2002.

2. Under Article 35 of the schedule to the Limitation Act, limitation in respect of filing of the suit on a bill of exchange or promissory note payable on demand and not accompanied by any writing, restraining or postponing the right to sue is three years from the date of bill or note. If the date on the Bill which is 22-5-1996, is taken, prima facie the suit filed on 22-11-99 would be barred by limitation. It is however, argued on behalf of the Plaintiffs that they are entitled to exclusion of time the receiver was first appointed till discharge. This submission is based on Section 15 of the Limitation Act. Section 15 reads as under :

"In computing the period of limitation prescribed for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made and the day on which it was withdrawn, shall be excluded."

Relying on this, it is argued that once the Receiver was appointed for the business of partnership, the partners could not have filed the suit and consequently the day on which the Receiver was appointed and till the date, the receiver is discharged has to be excluded. If that be the case, the suit is within limitation. Before adverting to the authorities concerned, let us find out when section 15(1) contemplates exclusion of time. The following would be the requirements in so far as institution of the suit is concerned.

(1) There must be injunction or order restraining institution of the suit;

(2) If there is such injunction or order then the period between the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.

Admittedly in this case, there is no injunction order restraining Plaintiff from instituting the suit. The question is whether the appointment of the Receiver can be said to be an order which restrained the Petitioner from filing the suit. If it can be said to be an order restraining the filing of the suit, then in that event the time between 25-9-1996 and 15-3-2001 will have to be excluded. Parties agree that the Receiver took possession some time in November, 1996. The bill is dated 22-5-1996. The order was passed on 25-9-1996. The suit was filed on 22-11-1999.

3. It is firstly contended relying on the judgment of this court in I.C.I.C.I. Ltd. Vs. Alpine Industries Ltd. and Ors. 1999(3) Bom.C.R. 771 : [1999(3) ALL MR 112], that once the Receiver is appointed for the partnership property, the partners of the partnership would be prohibited from dealing with the property. In that case, the issue was whether the provisions of Section 16 and 22 of the S.I.C. (Special Provisions) Act would apply. The receiver had been appointed before the proceedings were registered against the company before B.I.F.R. However, before possession could be taken, proceedings were registered. The question was whether the court after registration of the proceedings would have jurisdiction to proceed with the matter. It is in these circumstances that the issue was considered whether the property was custodia legis. The finding was recorded that untill property was taken possession by the receiver, it would not be custodia legis. It would only be on possession being taken. It is in that context that it was observed that though Receiver has been appointed, the defendants therein who are parties to the proceedings were prohibited from dealing with the property. The next judgment cited is in the case of Siraj-ul-Haq Khan and others Vs. The Sunni Central Board of Waqf U.P. and others, AIR 1959 Supreme Court 198. In that case, the issue pertained to properties of a Waqf and one of the issues was whether the period of limitation in filing the suit could be excluded on account of injunction and order. While answering the question, the Apex Court observed as under :

"It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit.............."

What may be noted considering the language is that, there must be an injunction or order prohibiting institution of the suit. Shunmugam and another Vs. Moidin, VIII ILR 229, was a case where the widow of the deceased partner filed a suit for winding of the partnership. The surviving partner was prohibited by the court at the instance of the Plaintiff from collecting debt due to the firm; but leave was given to apply for the recovery of debts which might become barred by limitation. In that case, decree was passed. Subsequent to that, Receiver was appointed. Receiver sued for recovery of debt. The suit was dismissed on two counts; that the appointment of the Receiver after the decree was ultra vires and secondly because the debt was barred by limitation. Construing the language of the order of injunction it was held that by injuncting the partner from collecting debts, the person was under disability, and that the surviving partner could not have sued without violating the order of injunction. The appeal was therefore, allowed and the order restraining the filing of the suit was held to be order falling under Section 15. Next reliance is placed on the judgment of the Division Bench of the Patna High Court in Chottay Narain Singh and Others Vs. Kedar Nath Singh and Others, AIR 1922 Patna 201. These were proceedings in execution. Possession was sought in the decree for foreclosure. Receiver was in possession. It is in these circumstances the court held that the Receiver cannot be dispossessed and therefore, the period during which the Receiver was appointed had to be excluded. The court observed that in other words, the appointment of the Receiver and the direction to him to pay the interest due to the Plaintiff operated not in form as an order staying further proceedings in the suit untill disposal of the appeal by the Privy Council. Lastly reliance was placed on the judgment of the learned Single Judge of this court. In the case M/s. The Chemist Vs. Ishwarlal Karsondas Kapadia, 1968(71) B.L.R. 31. In that case, an undertaking was given to the court which was accepted that the decree would not be executed, the court held, that it had the effect of staying the execution and would amount to an order of the court equivalent to injunction. On construction of the ratio of the judgments, it would have been perhaps possible to hold that if Receiver was appointed without the power to sue, Section 15 would be attracted. Receiver was appointed with all powers.

4. The prayer Clause was widely worded and the appointment of the Receiver was sought with all powers, under Order 40 Rule 1 that includes the power to recover amounts. Interim relief was granted in terms of this prayer. Even otherwise, if this power was not specifically conferred and if a Receiver was appointed with all powers, considering Order 40 Rule 1 C.P.C. Receiver would have powers as to bringing and defending suits etc. In the instant case, it is not plaintiff who instituted the suit. The suit was instituted by the Receiver after having been conferred such powers. There was no bar on the Receiver in instituting the suits. Once that be the case, section 15 would not be attracted. In the instant case, present Plaintiff has now been substituted in place of the Receiver. It is not a case where Plaintiff independently had filed the suit and contended that the period during which Receiver was appointed has to be excluded. If that had been position, the matter would have been examined in a different context. On the facts as now they stand, the suit having been instituted by the Receiver who had powers to institute the suit, provisions of Section 15 would not be attracted and time could not be excluded. Considering that, there are triable issues. The suit was instituted during the period when the interim relief was in force, by the Receiver who was appointed in terms of the Prayer Clause in the matter for interim relief.

5. The suit is transferred to the list of Commercial Causes. The defendants to file the written statement within thirty days from today. Discovery and inspection within four weeks thereafter.

Summons for Judgment disposed of accordingly.

Order accordingly.