Case: Sha Mulchand &amp; Co. Ltd.(In Liquidation) Vs. Jawahar Mills Ltd

their Lordships to remedy the defect." Learned advocate for the Mills, however, points out that the reason for holding that Art. 181 was confined to applications under the Code was that the Article should be construed ejusdem generis and that, as all the Articles in the third division of the schedule to the Limitation Act related to applications under the Code, Article 181, which was the residuary Article, must be limited to applications under the Code. That reasoning, it is pointed out, is no longer applicable because of the amendment of the Limitation Act by the introduction of the present Articles 158 and 178. These Articles are in the third division which governs applications but they do not relate to applications under the Code but to one under the Arbitration Act and, therefore, the old reasoning can no longer hold good. It is urged that it was precisely in view of this altered circumstance that in - Asmatali Sharif v. Mujaher Ali. 52 Gal W N 64 a Special Bench of the Calcutta High Court expressed the opinion that an application for pre-emption by a non-notified co-sharer should be governed by Article 181 of the Limitation Act. A perusal of that case, however, will show that the Special Bench did not finally decide that question in that case. In - Hurdutrai Jagdish Prasad v. Official Assignee of Calcutta. 52 Cal W N 343 a Division Bench of the Calcutta High Court consisting of Chief Justice Harries and Mr. Justice Mukherjea who had delivered the judgment of the Special Bench clearly expressed the view that Article 181, Limitation Act. applied only to applications under the Code of Civil Procedure and did not apply to an application under S. 56, Presidency Towns Insolvency Act. Mukherjea J. who also delivered the judgment of the Division Bench explained the observations made by him in the Special Bench case by pointing out that the entire procedure for an application under S. 26 (F) Bengal Tenancy Act, was regulated by Code of Civil Procedure and, therefore, an application for pre-emption was, as it were, an application made under Code of Civil Procedure Subsequently in - Sarvamangala Dasi v, Paritosh Kumar Das G. N. Das J. who was also a member of the Special Bench in the first mentioned case expressed the opinion, while sitting singly, that Article 181 was not confined to applications under the Code. His Lordships attention does not appear to have been drawn to the case of -Hurdutrai Jagdish Prasad (supra). It does not appear to us quite convincing, without further argument, that the mere amendment of Articles 158 and 178 can ipso facto alter the meaning which, as a result of a long series of judicial decisions of the different High Courts in India, came to be attached to the language used in Article 181. This long catena of decisions may well be said to have, as it were, added the words "under the Code" in the first column of that Article. If those words had actually been used in that column then a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that Article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion, as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and authomatically have the effect of altering the long acquired meaning of Art. 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available. We need not, however, on this occasion, pursue the matter further, for we are of the opinion that even if Article 181 does apply to the present application it may still be said to be within time. The period of limitation prescribed by that Article is three years from the time "when the right to apply accrues". It is true that a further notice after the shares are forfeited, is not necessary to complete the forfeiture of the shares but it is difficult to see how a person whose share is forfeited and whose name is struck out from the register can apply for rectification of the register until he comes to know of the forfeiture. The same terminus a quo is also prescribed in Article 120, Limitation Act. In - O.R.M.O.M.S.P. (Firm) v Nagappa Chettiar, ILR (1941) Mad 175 (PC) which was a suit to recover trust property from a person who had taken it, with notice of the trust, by a transaction which was a breach of trust, the Privy Council approved and applied the principles of the earlier Indian decisions referred to therein to the case before them and held that the time began to run under Art 120 after the plaintiff came to know of the transaction which gave him the right to sue. On the same reasoning we are prepared to extend that Principle to the present application under Article181. If Art. 181 applies then time began to run after the Company came to know of its right to due. It is not alleged that the Company had any knowledge of the forfeiture between 5/9/1941 when the resolution of forfeiture was passed and 9/9/1941 when the Company became defunct. After the last mentioned date and up to the 16/02/1945 the Company stood dissolved and no knowledge of notice can be imputed to the Company during this period. Therefore, the Company must be deemed to have come to know of its cause of action after it came to life again and the present application was certainly made well within three years after that event happened on 16/2/1945. If Article 181 does not apply then the only Article can apply by analogy is Art. 120 and the application is also within time. In either view this application cannot be thrown out as barred by limitation.

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

Explanation:
1[ds]1. This long catena of decisions may well be said to have, as it were, added the words "under the Code" in the first column of that Article. If those words had actually been used in that column then a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that Article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion, as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and authomatically have the effect of altering the long acquired meaning of Art. 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available. We need not, however, on this occasion, pursue the matter further, for we are of the opinion that even if Article 181 does apply to the present application it may still be said to be within time. The period of limitation prescribed by that Article is three years from the time "when the right to apply accrues". It is true that a further notice after the shares are forfeited, is not necessary to complete the forfeiture of the shares but it is difficult to see how a person whose share is forfeited and whose name is struck out from the register can apply for rectification of the register until he comes to know of the forfeiture. The same terminus a quo is also prescribed in Article 120, Limitation Act. In - O.R.M.O.M.S.P. (Firm) v Nagappa Chettiar, ILR (1941) Mad 175 (PC) which was a suit to recover trust property from a person who had taken it, with notice of the trust, by a transaction which was a breach of trust, the Privy Council approved and applied the principles of the earlier Indian decisions referred to therein to the case before them and held that the time began to run under Art 120 after the plaintiff came to know of the transaction which gave him the right to sue. On the same reasoning we are prepared to extend that Principle to the present application under Article181. If Art. 181 applies then time began to run after the Company came to know of its right to due. It is not alleged that the Company had any knowledge of the forfeiture between 5/9/1941 when the resolution of forfeiture was passed and 9/9/1941 when the Company became defunct. After the last mentioned date and up to the 16/02/1945 the Company stood dissolved and no knowledge of notice can be imputed to the Company during this period. Therefore, the Company must be deemed to have come to know of its cause of action after it came to life again and the present application was certainly made well within three years after that event happened on 16/2/1945. If Article 181 does not apply then the only Article can apply by analogy is Art. 120 and the application is also within time. In either view this application cannot be thrown out as barred by limitation.