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Case Number

A.A.O No. 646 of 1949.

Attorney(S)

Messrs. K. Kuttikrishna Menon and P. Anandan Nair for Applt.
Messrs. K. Bhashyam, O.T.G Nambiar. C.M Balakrishna Kurup, N. Gopala Menon and P. Balakrishna Nair for Respts.

Judges

Satyanarayana Rao
Rajagopalan, JJ.

Acts

S. 9 of the Provincial Insolvency Act and S. 235 of the Indian Companies Act
S. 9 of the General Clauses Act provides:In any Central Act or Regulation
S. 9 of the Provincial Insolvency Act by Act III of 1950
S. 9(1)(c) of the Provincial Insolvency Act, the act
Ss. 9 and 10 of the General Clauses Act
S. 9 of the Provincial Insolvency Act.
S. 235 of the Indian Companies Act,
S. 10 of the General Clauses Act,
S. 9 of the General Clauses Act
PROVINCIAL INSOLVENCY ACT

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Smart Summary

Structured Summary of the Opinion (Delivered by Satyanarayana Rao, J.)

Factual and Procedural Background

The Official Liquidator of the Union Bank, Malabar Ltd. appealed against an order of the learned District Judge, South Malabar, which had dismissed an application under S. 235 of the Indian Companies Act in limine on the ground of limitation. The application was made against the Managing Director of the Union Bank, Malabar Ltd., its Secretary and the auditor appointed by the General Body at the annual general meeting. The Official Liquidator was appointed on 20 June 1939 and the application under S. 235 was filed on 20 June 1942 (19 June 1942 being a Sunday). The District Judge dismissed the application without going into its merits on the ground that it was beyond the three-year period prescribed by S. 235.

Legal Issues Presented

Whether the District Judge was correct in holding that the application under S. 235 of the Indian Companies Act was barred by the three-year limitation period.
Whether S. 9 of the General Clauses Act permits exclusion of the first day (the date of the liquidator's appointment) when computing the three-year period under S. 235.
Whether S. 10 of the General Clauses Act applies so that, if the last day of the prescribed period falls on a day when the Court is closed, filing on the next open day is timely.
Whether S. 235 should be treated analogously to the proviso/condition precedent as interpreted in the Provincial Insolvency Act decisions (notably Chenchuramana v. Arunachalam) so as to prevent reliance on S. 10.

Arguments of the Parties

Appellant's Arguments

The appellant relied on S. 9 of the General Clauses Act to exclude the first day (the date of the liquidator's appointment) in computing the three-year period prescribed by S. 235, because S. 235 uses the word "from".
Alternatively (and additionally), the appellant relied on S. 10 of the General Clauses Act to contend that since the last day of the three-year period fell on a Sunday (when the Court was closed), filing on the next day (20 June 1942) was within time.

Respondents' Arguments

The respondents contended that S. 9 applies only where both words "from" and "to" occur in a statute and thus could not be invoked in the present context.
They argued that the phrase "any other period of time" in S. 9 means the first unit of that period (e.g., the first year in a three-year period) and that applying S. 9 to exclude the first day of a multi-year period would lead to absurd results.
Relying on the Full Bench decision in Chenchuramana v. Arunachalam, respondents argued that the period prescribed by S. 235 ought to be treated as a condition precedent analogous to the Provincial Insolvency Act provision there, and therefore S. 10 could not be used to extend filing to the next court day after a vacation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Radcliffe v. Partholomew	Authority for the established rule of construction that in computing time the usual practice is to exclude the first day and include the last.	Used to support the statutory interpretation under S. 9 of the General Clauses Act that the first day should ordinarily be excluded when "from" is used.
Ramachandra Govind v. Laxman Savleram	Decision where the principle of S. 9 was applied to a period fixed by an order or decree of Court.	Cited as an example where the S. 9 principle was applied; the court treated it as supportive authority for applying S. 9 in the present context.
Puran Chand v. Mohd. Din	Decision applying the principle underlying S. 9 in the context of a period fixed by court order/decree.	Cited together with similar decisions to show instances where the principle was applied; used to justify application of S. 9 here.
Marakanda Sahu v. Lal Sadauanda	Another decision in which the principle underlying S. 9 was applied.	Relied upon as part of a group of decisions indicating that the S. 9 principle has been applied where appropriate; supported the court's view that S. 9 applies to S. 235.
Chenchuramana v. Arunachalam (Full Bench)	Held that the requirement in the Provincial Insolvency Act (act of insolvency within three months) is a condition precedent; S. 10 of the General Clauses Act was held not applicable in that context.	The court distinguished that decision: it found the Provincial Insolvency Act provision not in pari materia with S. 235 and therefore held Chenchuramana did not control the present case. The court also noted that legislature later amended the Provincial Insolvency Act to address the issue.
Sambasivachari v. Ramaswami Reddi	Authority indicating recognition of the principle underlying S. 10 (filing on next open day if Court closed) apart from the statute.	Cited to support the proposition that S. 10 embodies a principle recognized by courts and that the appellant could rely on S. 10 where the court was closed on the last day of the prescribed period.
Ratnasami Padayachi v. Kuppusami Aiyar	Similarly cited as recognizing the principle underlying S. 10.	Used with Sambasivachari to justify the application of S. 10 to the facts of the present case.
Official Liquidator v. Krishnaswami Aiyangar (Clark, J.)	Held that the period of limitation prescribed in S. 235 prevails over the Limitation Act; treated S. 235 as prescribing a period of limitation.	Cited to show previous judicial treatment of S. 235 as a limitation period and to demonstrate that earlier decisions did not consider whether S. 235 constituted a condition precedent on the lines of the Provincial Insolvency Act.
Official Liquidators of the Benaras Bank Ltd. v. Sri Prakasha	Decision to similar effect as above concerning S. 235 and limitation.	Cited to reinforce the position that S. 235's prescribed period is to be treated as the relevant limitation period and does not preclude reliance on rules such as S. 10 of the General Clauses Act.

Court's Reasoning and Analysis

The court's analysis proceeded in two linked strands corresponding to S. 9 and S. 10 of the General Clauses Act.

On S. 9 (exclusion of the first day):

The court noted that S. 235, as amended in 1936, prescribes that an application must be made "within three years from the date of the first appointment of a liquidator". The word "from" appears in the statutory language.
Under S. 9 of the General Clauses Act, where "from" is used it is sufficient to indicate exclusion of the first day for purposes of computation; S. 9 gives statutory recognition to the well-established principle that ordinarily the first day is excluded and the last included in computing time (supported by Radcliffe v. Partholomew and the passage in Halsbury's).
The court rejected the District Judge's view that the use of the word "within" beside "from" prevented application of S. 9. The court held "within" denotes the period during which action must be taken, while the computation of that period begins with the date of appointment; therefore, S. 9 applies.
The court addressed and rejected respondent arguments that S. 9 requires both "from" and "to" to be present or that "any other period of time" means the first unit (e.g., first year). The court construed "the first in a series of days" and "any other period of time" to mean the first day in any such period, and found no absurdity in such application.
Decisions in which the S. 9 principle had been applied to periods fixed by orders or decrees (Ramachandra Govind v. Laxman Savleram, Puran Chand v. Mohd. Din and Marakanda Sahu v. Lal Sadauanda) were noted as examples supporting the application of S. 9.
Conclusion on this strand: on principle and clear language of S. 9, the appellant was entitled to exclude the first day from the computation of the three-year period; therefore the application was in time when computed on that basis.

On S. 10 (court closed on last day):

S. 10 provides that where a prescribed period expires on a day when the Court is closed, the act or proceeding is considered in due time if done on the next day the Court is open. The court applied this to the present case: if the last day of the three-year period was a Sunday (Court closed), filing on the next open day satisfied the requirement.
The respondents' reliance on Chenchuramana v. Arunachalam was considered. The court distinguished that Full Bench decision because the Provincial Insolvency Act's provision (requiring the act of insolvency to have occurred within three months) is not a period prescribed for filing a petition but an antecedent condition; in that context S. 10 did not apply. The court held S. 235 is different in nature.
The court observed that the Provincial Insolvency Act provision considered in Chenchuramana was later amended by the legislature (Act III of 1950) to permit presentation on the day the Court reopens where the period expired when Court was closed, thereby obviating the difficulty identified in Chenchuramana.
The court concluded that under S. 235 there is no antecedent requirement analogous to the Provincial Insolvency Act; the only requirement is initiation of proceedings within three years. Therefore S. 10 applies and the appellant could file on the next open day if the last day fell on a Court holiday or closure.
The court also relied on earlier decisions recognizing the principle underlying S. 10 independently of the statute (Sambasivachari v. Ramaswami Reddi and Ratnasami Padayachi v. Kuppusami Aiyar) and cited prior decisions (Official Liquidator v. Krishnaswami Aiyangar and Official Liquidators of Benaras Bank Ltd. v. Sri Prakasha) that treated S. 235 as prescribing a period of limitation.

Net analytical outcome: Applying S. 9 to exclude the first day and S. 10 to allow filing on the next open day when the last day falls on a Court closure, the court found the application to have been filed in time. The court therefore found the District Judge's dismissal on limitation grounds to be incorrect.

Holding and Implications

Holding: The appeal is allowed; the order of the learned District Judge is set aside; the application under S. 235 is remanded to the lower Court for disposal according to law. Costs of these proceedings will abide the result. (As expressed in the opinion: the appeal must be allowed, the order ... set aside and the application remanded.)

Implications:

Direct effect on the parties: The Official Liquidator's application is no longer treated as time-barred on the grounds previously applied by the District Judge; the lower Court must now consider the application on its merits in accordance with law.
Statutory interpretation consequence: The court accepted the applicability of S. 9 of the General Clauses Act to exclude the first day where "from" is used, and S. 10 to treat filings on the next open Court day as timely where the last day falls on a Court closure, insofar as S. 235 of the Indian Companies Act is concerned.
Broader precedent: The opinion distinguishes the Full Bench decision in Chenchuramana v. Arunachalam on the facts and statutory context and notes subsequent legislative amendment to the Provincial Insolvency Act; the opinion does not assert it is creating any broader legislative change but applies existing general-clauses principles to S. 235. The opinion does not state that it is establishing a novel principle beyond the interpretation applied to S. 235 in this appeal.

Note: This summary is limited strictly to the content and reasoning contained in the provided opinion. No additional facts, authorities or inferences beyond the text have been included.

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The Official Receiver Of Malabar, Official Liquidator, The Union Bank Of Malabar, Ltd., v. N. Padmanabha Menon And Others.

(Delivered by Satyanarayana Rao, J).

This is an appeal by the Official Liquidator, the Union Bank, Malabar Ltd., against the order of the learned District Judge, South Malabar, dismissing an application under S. 235 of the Indian Companies Act in limine on the ground, that it was barred by limitation. The application was against the Managing Director of the Union Bank, Malabar, Ltd., its Secretary and also the auditor who was appointed by the General Body at the annual general meeting The Official Liquidator was appointed on 20th June, 1939 and the application was taken out under S 235 of the Indian Companies Act on 20th June 1942. 19th June 1942 was a Sunday. The learned District Judge of South Malabar without going into the merits of the application, dismissed the application on the ground, that it was beyond three years, the period prescribed by S. 235 of the Act.

The short point, therefore, for consideration in this appeal is whether the view taken by the learned District Judge is correct. S. 235 of the Indian Companies Act was amended in 1936 by Act XXII of 1936 by which a period for filing an application under the statute was prescribed. The portion of the section which is relevant for the purpose of this discussion is:

“……the Court, may, on the application of the liquidator, or of any creditor or contributory made within three years from the date of the first appointment of a liquidator in the winding up or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer etc.”

The appellant's Counsel relies upon Ss. 9 and 10 of the General Clauses Act and contends that the first day, i.e, the day on which the liquidator was appointed, should be excluded under S. 9 of the General Clauses Act, and, that, as the Court was closed on the 19th June 1942, the application filed on the next day is within time under S. 10 of the General Clauses Act even if he was not entitled to invoke S. 9 of the General Clauses Act. We think that the contention of the learned Advocate for the appellant bassed on both the sections is correct. S. 9 of the General Clauses Act provides:

“In any Central Act or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word ‘from’, and, for the purpose of including the last in a series of days or any other period of time, to use the word ‘to’”.

An application under S. 235, it is no doubt true, has to be made within three years from the date of the first appointment of the liquidator. But, in computing the period of three years, as the word “from” is used in the Act, it is contended that the first day should be excluded from computation. The learned District Judge thought that, as the word “within” was used besides the word “from”, there was no scope for the application of S. 9 of the General Clauses Act. We do not share that view. The word “within” was used to denote the period during which action had to be taken by the liquidator by making an application under the section. But, in order to determine the period, one has to compute it beginning with the day on which the liquidator was first appointed. Under S. 9 of the General Clauses Act, as the word “from” is used in S. 235 of the Indian Companies Act, the first day should ordinarily be excluded. S. 9 of the General Clauses Act gives statutory recognition to the well established principle applicable to the construction of statutes that ordinarily in computing time the rule observed is to exclude the first and include the last [vide the decision in Radcliffe v. Partholomew(1)], and the passage in Halsbury's Laws of England, 2nd Edn., at page 138). It was, however, argued on behalf of the respondents that S 9 applies only where both the words “from” and “to” occur in a statute and not otherwise. This construction implies that the word “and” used in S. 9 is not used disjunctively but conjunctively; but, on a plain reading of the section, it is obvious that the word is used only disjunctively to indicate two things, namely, if the first day has to be excluded it is sufficient to use the word “from”, and if the last day is to be included the word to be used is “to”. It was also urged on behalf of the respondents that the word “first in S. 9 of the General Clauses Act before “in a series of days” no doubt implies the first day, but the same cannot be applied to any other period of time occurring in the section, his contention being that “any other period of time” means the first unit in “any other period of time.” In other words, when a three years' period is mentioned, the first unit is the first year and therefore it was contended that it would lead to absurd results. We think, however, that no such catastrophe is implied in the language of the section, and taking the two parts of the section together, “the first in a series of days” would mean “the first day in a series of days” and the same would qualify “any other period of time”; i.e, “the first day in any other period.” In the same manner, “the last day in a series of days” would also apply to “any other period of time occurring in the latter half of the section. In both the contexts, the first day and the last day are to be taken as applicable not only to the “series of days” but also to “any other period of time” referred to in the section. Though there is no direct case interpreting the section, our attention was drawn to the decisions in which the principle of S. 9 was applied, where the period fixed was by an order or decree of Court. [Vide the decisions in Ramachandra Govind v. Laxman Savleram, Puran Chand v. Mohd. Din(2) and Marakanda Sahu v. Lal Sadauanda(3)]. In the Bombay case, the learned Judge referred to the language of S. 9 and placed an interpretation upon it which, we think, is correct, though it was not necessary for the decision of the case. If the principle could be applied independently of the statute, we see no reason to vary it in a case where the language of the section exactly applies. In our opinion, therefore, both on principle and also on the clear language of the section, the appellant is entitled to exclude the first day from the computation of the period of three years. In this view, the application is in time.

But, as the learned Counsel on both sides argued the case also under S. 10 of the General Clauses Act, we think it would be proper to express our view on that question also. S. 10 of the General Clauses Act provides:

“Where, by any Central Act or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open.”

In the present case, an application is allowed to be filed by S. 235 of the Indian Companies Act and it should be filed within three years from the date of the first appointment of the liquidator. If the last day in that period of three years was a Sunday and the Court was closed, under the section, if the application was filed on the next day, it would satisfy the requirement of the law and no question of the application having been filed beyond the period prescribed could arise Mr. Bashyam, the learned Counsel for the respondents, however, argued relying on a Full Bench decision of this Court in Chenchuramana v. Arunachalam(4), that the period of three years prescribed by S. 235 must be treated as a condition precedent in the same manner as provided by S. 9 of the Provincial Insolvency Act. We are, however, of the opinion that the two sections, i.e S. 9 of the Provincial Insolvency Act and S. 235 of the Indian Companies Act are not in pari materia. Under S. 9(1)(c) of the Provincial Insolvency Act, the act of insolvency on which the petition is founded must have occurred within three months before the presentation of the petition. It is obviously not a period prescribed for filing the petition as no period has been prescribed, under law, for presenting a petition under S. 9. All that the statute requires is that the act of insolvency must have occurred within three months before presentation of the petition. The proceeding initiated in a Court is the filing of the petition and no step in Court is contemplated with reference to the act of insolvency and, therefore, S. 10 of the General Clauses Act would not apply. It was therefore held in the Full Bench decision in Chenchuramana v. Arunachalam that the existence of an act of insolvency within three months before is a condition precedent for the filing of the petition, and, if the petition was filed on the reopening date of the Court, and if the three months' period had expired during the vacation, the act of insolvency would no longer be available to the petitioning-creditor and therefore the petition would not be maintainable. Since the decision in Chenchuramana v. Arunachalam the legislature intervened and added a proviso to S. 9 of the Provincial Insolvency Act by Act III of 1950 which obviates the difficulty felt by the learned Judges in Chenchuramana v. Arunachalam. It provides:

“Provided that where the said period of three months referred to in Cl. (c) expires on a day when the Court is closed, the insolvency petition may be presented on the day on which the Court reopens.”

In the present case, there is no question of any antecedent requirement within the particular period of time to be fulfilled to enable the liquidator to maintain the petition under S. 235. All that he is required to do is to initiate proceedings within a period of three years which have to be computed from the date of the first appointment of the liquidator, and if it happens that the last day in the prescribed period is a day on which the Court is closed, the liquidator is entitled to file an application the next day. The principle underlying S. 10 is also a principle recognised, apart from the statute, in this High Court and in other Courts [Vide the decisions in Sambasivachari v. Ramaswami Reddi and also Ratnasami Padayachi v. Kuppusami Aiyar].

Our attention was drawn to the decision of Clark, J. in Official Liquidator v. Krishnaswami Aiyangar, where the learned Judge had to consider the question, whether the period of limitation prescribed in S. 235 of the Indian Companies Act could be cut down by treating the application as a suit and applying the period of limitation prescribed for such suits by the Limitation Act. The learned Judge decided that the period of limitation prescribed under S. 235 prevails over the period prescribed by the Limitation Act for similar suits. The decision proceeded on the assumption that the period prescribed in S. 235 is a period of limitation, and the learned Judge was not called upon to discuss the question, whether the requirements of S. 235 constituted a condition precedent on the analogy of the Provincial Insolvency Act which was interpreted in the decision in Chenchuramana v. Arunachalam. To the similar effect is the decision in Official Liquidators of the Benaras Bank Ltd. v. Sri Prakasha(5). We, therefore, think that the petitioner is entitled also to rely on S. 10 of the General Clauses Act, and that the application is not barred under S. 235 even from this point of view.

The result is, the appeal must be allowed, the order of the learned District Judge set aside and the application remanded to the lower Court for disposal according to law. Costs of these proceedings will abide the result.

V.C.S

The Official Receive... v. N. Padmanabha Menon ...