Case: Turner Morrison And Co., Ltd Vs. Hungerford Investment Trust Ltd

Hungerford because under the amended. Section 23-A of the Income-tax Act, 1922, that liability was that of Turner Morrison itself. But it was urged on behalf of Turner Morrison that in view of Section 15 (5) of the Limitation Act, 1963, the claim made leaving aside the claim made in respect of the assessment for the assessment year 1955-56 is not barred. Section 15 (5) prescribes:"In computing the period of limitation for any suit the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government shall be excluded". 32. It was urged on behalf of Turner Morrison that Hungerford is a non-resident company. Therefore it cannot be said that at any time it was present in India. Hence the suit is not barred. If this argument is correct then there can be no period of limitation for filing a suit against a non-resident company a proposition which is prima facie startling. Can we hold that Section 15 (5) applies to a suit of the type with which we are concerned? That provision contemplates the case of a defendant who has been absent from India. That Article presupposes that defendant was at one time present in India and later he has been absent from India. A person who was never in India cannot be considered as having been absent from India. Factually a company cannot either be present in India or absent from India. But it may have a domicile or residence in India. Sometimes questions have arisen as to what is the place of residence of an incorporated company. Dicey in his Conflict of Laws (4th Edn. P. 152 rule 19) pointing out the difference between the domicile of a natural person and that of a corporation, says:"The domicile of a human being is a fact which on certain points subjects him to the law of a particular country. The domicil of a corporation is a fiction suggested by the fact that a corporation is on certain points, e. g., the jurisdiction of the Courts, subject to the law of a particular country. A man, that is to say, is in some respects subject to the law of England because he has in fact an English domicil; a corporation is by a fiction supposed to have an English residence or domicil because it is in certain respects subject to the law of England. Hence a corporation may very well be considered domiciled or resident, in a country for one purpose and not for another, and hence, too the great uncertainty as to the facts which determine the domicil, or residence of a corporation. In each case the particular question is not, at bottom, whether a corporation has in reality a permanent residence in a particular country, but whether, for certain purposes (e. g. submission to the jurisdiction of the Courts or liability to taxation), a corporation is to be considered as resident in England or in some other country." 33. The question of residence of an insurance company registered and having its registered office in a Foreign Country came up for consideration before the Chancery Division in New York Life Insurance Company v. Public Trustee, 1924-2 Ch. 101. Therein Pollock M. R. quoted with approval the following passage from the judgment of Lord St. Leonards in Carron Iron Co. v. Maclaren, (1955) 5 HLC 416."I think that this company may properly be deemed both Scotch and English. It may for the purposes of jurisdiction, be deemed to have two domiciles. Its business is necessarily carried on by agents and I do not know why its domicile should be considered to be confined to the place where the goods are manufactured.........There may be two domiciles and two jurisdictions; and in this case there are, as I conceive, two domiciles and a double sort of jurisdiction, one in Scotland and one in England; and for the purpose of carrying on their business, one is just as much a domicile of the corporation as the other." 34. The same view was expressed in that case by Warrington, L. J. and Atkin L. J. 35. A Division Bench of the Bombay High Court in Sayaji Rao Gaikwar of Baroda v. Madhavrao Raghunathrao, AIR 1929 Bom 14 dealing with the scope of Section 13 of the Limitation Act 1908 which is identical with the present Section 15 (5) held that Section 13 must be read so as to avoid the obvious absurdity that arises if such corporate bodies are deemed to reside out of British India so that suits against them can never be barred at all. And this can be done by treating them as defendants, who by reason of their special character, are not absent from British India within the meaning of the section, because they have not got the same liberty as private individuals to reside personally in British India and attend to their affairs and they must do so through agents or representatives. Under those circumstances, they can be held to reside in British India in so far as they actually carry on business through their representatives in British India. 36. Section 15 (5) of the Limitation Act, 1963 can be viewed in one of the two ways i.e. that that provision does not apply to incorporated companies at all or alternatively that the incorporated companies must be held to reside in places where they carry on their activities and thus being present in all those places. Hungerford is an Investment company. It had invested large sums of monies in Turner Morrison. Its Board of Directors used to meet in India now and then. It was (through its representatives) attending the general meeting of the share-holders of Turner Morrison. Under these circumstances, it must be held to have been residing in this country and consequently was not absent from this country. Hence Section 15 (5) cannot afford any assistance to Turner Morrison to save the bar of limitation.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We have to seewhether the company in fact had waived the lien it had in respect of the suit claim, assuming that the said claim is otherwise good.As seen earlier at all stages. Turner Morrison took over the responsibility of paying the tax due on behalf of Hungerford. There was no idea of recovering the amount paid as tax, from Hungerford. When Hungerford sold 49 per cent of its shares to Mundhra the same was registered without any objection. It was clearly admitted by the Secretary of Turner Morrison and other witnesses examined on behalf of the that company that the idea of suing Hungerford for recovering the tax paid was conceived for the first time after Mundhra obtained the decree for specific performance. Under these circumstances, it is clear that Turner Morrison had waived the lien that it might have had over the shares held by Hungerford. Hence the only claim that Turner Morrison could have made against Hungerford was a money claim. The present suit was filed on November 15, 1965. Hence it is governed by the provisions ofthe Limitation Act, 1963 which came into force on April 1, 1964. Article 23 of that Act fixes a period of three years for instituting a suit "for money payable to the plaintiff for money paid for the defendant" and the cause of action for the same commences when the money is paid. To the same effect was Article 63 of the Limitation Act, 1908. The amounts claimed in the present suit except those in respect of the assessment for the assessment year 1955-56 were all admittedly paid before November 15, 1962.Hence they are prima facie barred by limitation. So far as the payments made in respect of the assessment for the assessment year 1955 -56 is concerned, Turner Morrison can have no claim against Hungerford because under the amended. Section 23-A of the Income-tax Act, 1922, that liability was that of Turner Morrison itself. But it was urged on behalf of Turner Morrison that in view of Section 15 (5) ofthe Limitation Act, 1963, the claim made leaving aside the claim made in respect of the assessment for the assessment year 1955-56 is not barred. Section 15 (5) prescribes:"In computing the period of limitation for any suit the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government shall be excluded"32. It was urged on behalf of Turner Morrison that Hungerford is a non-resident company. Therefore it cannot be said that at any time it was present in India. Hence the suit is not barred. If this argument is correct then there can be no period of limitation for filing a suit against a non-resident company a proposition which is prima facie startling. Can we hold that Section 15 (5) applies to a suit of the type with which we are concerned? That provision contemplates the case of a defendant who has been absent from India. That Article presupposes that defendant was at one time present in India and later he has been absent from India. A person who was never in India cannot be considered as having been absent from India. Factually a company cannot either be present in India or absent from India. But it may have a domicile or residence in India. Sometimes questions have arisen as to what is the place of residence of an incorporated company. Dicey in his Conflict of Laws (4th Edn. P. 152 rule 19) pointing out the difference between the domicile of a natural person and that of a corporation, says:33. The question of residence of an insurance company registered and having its registered office in a Foreign Country came up for consideration before the Chancery Division in New York Life Insurance Company v. Public Trustee, 1924-2 Ch. 101. Therein Pollock M. R. quoted with approval the following passage from the judgment of Lord St. Leonards in Carron Iron Co. v. Maclaren, (1955) 5 HLC 416"I think that this company may properly be deemed both Scotch and English. It may for the purposes of jurisdiction, be deemed to have two domiciles. Its business is necessarily carried on by agents and I do not know why its domicile should be considered to be confined to the place where the goods are manufactured.........There may be two domiciles and two jurisdictions; and in this case there are, as I conceive, two domiciles and a double sort of jurisdiction, one in Scotland and one in England; and for the purpose of carrying on their business, one is just as much a domicile of the corporation as the other."34. The same view was expressed in that case by Warrington, L. J. and Atkin L. J35. A Division Bench of the Bombay High Court in Sayaji Rao Gaikwar of Baroda v. Madhavrao Raghunathrao, AIR 1929 Bom 14   dealing with the scope of Section 13 of the Limitation Act 1908 which is identical with the present Section 15 (5) held that Section 13 must be read so as to avoid the obvious absurdity that arises if such corporate bodies are deemed to reside out of British India so that suits against them can never be barred at all. And this can be done by treating them as defendants, who by reason of their special character, are not absent from British India within the meaning of the section, because they have not got the same liberty as private individuals to reside personally in British India and attend to their affairs and they must do so through agents or representatives. Under those circumstances, they can be held to reside in British India in so far as they actually carry on business through their representatives in British India36. Section 15 (5) ofthe Limitation Act, 1963 can be viewed in one of the two ways i.e. that that provision does not apply to incorporated companies at all or alternatively that the incorporated companies must be held to reside in places where they carry on their activities and thus being present in all those places. Hungerford is an Investment company. It had invested large sums of monies in Turner Morrison. Its Board of Directors used to meet in India now and then. It was (through its representatives) attending the general meeting of the share-holders of Turner Morrison. Under these circumstances, it must be held to have been residing in this country and consequently was not absent from this country. Hence Section 15 (5) cannot afford any assistance to Turner Morrison to save the bar of limitation.