Patna High Court
Roshan Lal Agarwal vs Sheoram Bubna And Ors. on 25 September, 1979
JUDGMENT Brishketu Saran Stnha, J.
1. This appeal under Clause 10 of the Letters Patent arises out of an order dated 20th January, 1978, passed in Company Petition No. 9 of 1974. By the impugned order, the learned company judge has held that the petition filed under Section 398 of the Companies Act, 1956 (hereinafter referred to as " the Act "), relating to the Krishak Cold Storage Ltd. (for brevity called '' the Cold Storage " hereafter) is not barred under Section 402(f) of the Act. This was an issue between the parties in the aforesaid application which has been decided first.
2. The respondents-petitioners filed an application under Section 398 of the Act, which has been numbered as Company Petition No. 9 of 1974, in which the relief sought is that the management of the company, i.e., the cold storage is conducting itself in a manner prejudicial to the interest of the cold storage and the transfer dated 24th May, 1974, made in favour of Roshan Lal Agarwal, the appellant, be set aside and the appellant be restrained from enforcing his rights to the assets of the Cold Storage, illegally transferred to him. The further prayer was to constitute a new board to manage the cold storage and provide for the conduct of its affairs.
3. The sale deed in question was executed on 24th May, 1974, by respondents Nos. 10 and 11 in favour of the appellant. Admittedly, the aforesaid application was filed on 24th August, 1974. In order to determine whether the application was time barred or not, the relevant provision is Section 402(f) of the Act, which reads as follows :
" 402. Without prejudice to the generality of the powers of the court under Section 397 or 398, any order under either Section may provide for--......
(f) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under Sections 397 or 398, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference." (the words are underlined by me).
4. By going through the above provision, it is obvious that it has to be found out whether in this case the application was filed in time, i.e., " within three months before the date of the application under Section 397 or 398 ". According to the appellant, the application was late by a day while, according to the petitioners before the learned company judge, the application had been filed within the prescribed period. The simple question, therefore, is whether the sale deed executed on 24th May, 1974, had been executed within three months before the 24th of August, 1974 ? It is not disputed by the parties that in order to answer this question, the only matter which falls for consideration is whether in computing the period within three months, 24th May, 1974, has to be included or excluded.
5. Mr. S.C. Ghosh, appearing for the appellant, has urged that in applying the aforesaid provisions, two conditions have to be fulfilled, namely, (i) that the application should be within three months ; and (ii) that the aforesaid period is to be before the date of the application. He contends that as the words " before the date of the application " have been used, it follows that the date of execution of the sale deed has got to be included in determining the period " within three months ".
6. In Maxwell's Interpretation of Statutes, 12th Edn., at page 310, it has been observed as follows :
" Where something has to be done so many days or weeks ' before ' a particular date, another rule is applied, namely, that both the day on which the thing is done and the day by which it has to be done are excluded from the computation, so that there is a ' clear ' period of so many days or weeks intervening. So a provision that a notice should be given three days before a trial means that there must be three clear days between the giving of the notice and the trial."
7. Obviously, therefore, the day on which the sale deed was executed is to be excluded from computation on the basis of the passage quoted above. In a Full Bench decision of this court in the case of Ram Nandan Singh v. Ramadhar Singh, AIR 1966 Patna 297, the question which fell for consideration was Rule 72(2) of the Bihar Panchayat Election Rules, 1959, which provided for computation " within thirty days from the date of the declaration of the result of the election ". It was held, in that case, that the date on which the result was declared had to be excluded in computing the period of thirty days. Similarly, the Allahabad High Court, in the case of Sita, Ram v. State, AIR 1961 All 151, while interpreting Section 106 of the Factories Act, where the complaint with regard to the offence must be made " within three months of the date of offence ", held that the day of the act or event should not be counted for computing three months. Similar view has been expressed by the Andhra Pradesh High Court in the case of V.S. Mehta, In re, AIR 1970 AP 234.
8. I am, therefore, of the view that the use of the words "before the date of the application" makes no difference in computing the period " within three months " as provided under Section 402(f) of the Act. The date of the execution of the sale deed must be excluded. Even on general principles it has been observed by the Supreme Court in the case of Lala Bal Mukand v. Lajwanti, AIR 1975 SC 1089, that where the language of limitation is ambiguous, a construction should be preferred which preserves a remedy to the one which bars or defeats it. In such a situation, I do not think that there is any force in the submission of Mr. Ghosh that as the respondents-petitioners could have a remedy of filing an ordinary suit to set aside the sale deed executed on 24th May, 1974, the alternative remedy as provided under the Act must be strictly construed. There is indeed hardly any question of applying the rules of strict construction in the instant case inasmuch as the usual rule, unless specially excluded in a particular case, is that in computing "within a period of fixed time " the day on which the act or event occurs is excluded. Therefore, in agreement with the learned company judge, I am of the view that the application has been filed within time. Indeed, Mr. Ghosh has conceded that if 24th of May, 1974, the date of the execution of the sale deed is excluded in computing the period " within three months ", then the application is in time.
9. Some argument was also advanced at the Bar that in view of Section 29 of the Indian Limitation Act, Section 2(1) of the aforesaid Act would also apply to the instant case. However, in the view that I have taken, it is not necessary to decide the question and, as at present advised, I would not express any opinion on this aspect of the matter, namely, whether the provisions of Section 12 of the Indian Limitation Act apply to the company law.
10. In the result, there is no merit in this appeal and it is, accordingly, dismissed. I would make no order as to costs.
Shiveshwar Prasad Stnha, J.
11. I agree.