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Judgment
These two appeals (S. A. Os. 25 and 32 of 1969) arise out of two applications moved before the instance of the Receiver (respondent 2) and the other on 22-3-1963 at the instance of the appellant, State Bank of India. While the Receiver in his application sought removal of the locks put by the appellant Bank on the property claimed by the Receiver to be belonging to the insolvent, so that he could take possession of he machinery etc. placed in side the locked premises, the appellant Bank in its application sought a direction from the insolvency Court to be issued to the Receiver not to interfere with the possession of the appellant Bank over the premises and the machinery placed therein and not to stop the appellant Bank from removing the machinery. The two applications were consolidated on 29-3-1963 and were decided by the insolvency Court by one order, dated 30-11-1967, whereby it dismissed the application of the Receiver and granted the necessary relief in part to the appellant Bank.
Against the said order of the insolvency Court, the Receiver as well as the appellant Bank went up in appeal; the Receive against the direction not to interfere with the pledged machinery and the appellant Bank against the refusal of the insolvency Court to issue such a direction to the Receiver regarding the immovable property. The two appeals were disposed of by the Additional District Judge, Ambala, vide his order, dated 30-11-1968, whereby he dismissed the appeal filed by the appellant Bank i.e. the appellant before me, and accepted the appeal of the Receiver, Hence the two second appeals at the instance of the Bank to this Court. This judgment will dispose of both of these appeals.
The lower appellate Court dismissed the appeal and consequently the application of the appellant Bank on the short ground the u/s 68 of the Provincial Insolvency Act, 1920 (Act 5 of 1920), hereinafter called the Act, the period of limitation prescribed is 21 days from the act or decision of the Receiver, from which an applicant feels aggrieved and since the application had been filed beyond 21 days from the act complained against, the said application was barred by limitation.
The learned counsel for the appellant Bank before me has challenged the decision of the lower appellate Court only with regard to the limitation and in this respect he has first submitted that in fact, it is Section 4 of the Act which is attached to the facts of this case and no Section 68 of the Act; Section 4 of the Act which is attracted to the facts of this case and not Section 68 of the Act; Section 4 of the Act he urges, provides no period of limitation and so it cannot be held that the application was barred by limitation. He has further urged that the objection with regard to limitation was not taken up by the Receiver before the insolvency Court, neither in the written statement nor thereafter, with the result that from the pleadings of the parties no issue with regard to limitation emerged.
Since the question of limitation is a mixed question of law and facts, so it should not have been allowed to be raised at the appellate stage. For this, the learned counsel has relied upon Banarsi Das Vs. Seth Kanshi Ram and Others, , wherein it has been observed as under:
"That a new plea of limitation which was not purely one of law but a mixed question of law and facts should not have been allowed to be raised for the first time at the stage of arguments in second appeal by the High Court especially when it was raised by the non-contesting defendant who had not filed a written statement in the suit. If the High Court felt overwhelmed by the provisions of Section 3 of the Limitation Act, it should at least have given an opportunity to the parties which supported the decree of the trial Court to meet the plea of limitation by amending their pleadings ............."
The learned counsel for the contesting respondent, on the contrary, has urged that, in fact, Section 68 of the Act is applicable to the facts of this case and further that no objection with regard to the limitation could be taken before the insolvency Court, because the applicant Bank did not state in its application either the date on which the cause of action had arisen or the fact that the application had been filed within the limitation.
I have given the matter my careful consideration and am of the opinion that this appeal must succeed. As regard the first submission of the learned counsel for the appellant Bank, I am of the opinion that there is no merit in this contention in view of the authoritative decision of their Lordships of the Supreme Court in Hans Raj v. Rattan Chand AIR 1967 SC 1780, whereof the Act is merely indicative of the ambit of scope of the jurisdiction of the insolvency Court and for the provisions enabling the filing of an application, one has to look elsewhere in the Act and it has been clearly mentioned that Section 68 of the Act is one of such enabling provisions where a person has to appeal against the action or a decision of a Receiver.
However, there is force in the second argument advanced by the learned counsel for the appellant Bank. Obviously, the question of limitation is a mixed question of law and fact and unless the facts are admitted or are available on the record of the case and no fresh facts are needed, the question of limitation cannot be allowed to be agitated in appeal. In the present case, the lower appellate Court has not mentioned as to from which date 21 days are to be counted. Neither the applicant had mentioned any date on which a particular action, against which it (the Bank) had filed the application, had been taken by the Receiver, nor has the lower appellate Court mentioned the impugned date on which the Receiver took the action which has been challenged by the applicant. In my view the lower appellate Court laboured under a misconception that the Receiver had taken possession of the premises in dispute immediately after the decision of the insolvency Court, but that fact is belied by the application of the Receiver, dated 3-2-1963, in which he sought the help of the insolvency Court to secure possession of the property in dispute, which shows that the Receiver, earlier to that date, did not get into actual possession of the said property and the interference on his part, that has been complained against by the appellant Bank in its application, must have occurred after the application which was moved by the Receiver before the insolvency Court.
In view of the above discussion, it is clear that the lower appellate Court was not right in permitting the Receiver to raise the question of limitation for the first time in appeal.
Learned counsel for the Receiver, respondent No. 2, has tried to urge that since there must have existed, on the file of the insolvency Court, the fact regarding the Receiver''s taking possession of the property in dispute, it could take suo motu notice of such a fact existing on that record. So all the material on the said file ought to be considered as forming part of the record of this case. I do not think there is merit in this contention of the learned counsel. The record of the insolvency proceedings cannot be read as part of the record of this case and even if what he has stated is considered correct, the Court cannot supply to itself the facts which have not been adduced and proved by the Receiver in this case.
Regarding S. A. O. 32 of 1969, the learned counsel for the Receiver has urged that the appeal has been filed in this Court beyond limitation and should be dismissed. I am again unable to accept this contention. The present appeals are connected appeals and have arisen from proceedings which were consolidated in the Court of first instance, as also in the lower appellate Court. The matter is not respondent integra. A similar question arose before their Lordships of the Supreme Court in Narhari and Others Vs. Shankar and Others, , wherein it has been held as under:
"From the decree of trial court in favour of the plaintiff two separate appeals were taken by two sets of the defendants. The appellate Court allowed both the appeals and dismissed the plaintiff''s suit by one judgment and ordered a copy of the judgment to be placed on the file of the other connected appeal. Two decrees were prepared. The plaintiffs preferred two appeals, one of the appeals was time barred and one the principle of respondent judicata the High Court dismissed both the appeals.
Held that it was not necessary to file two separate appeals in this case. The question of respondent judicata arose only when there were two suits. AS there was one suit and both the decrees were in the same case and based on the same judgment and the matter decided concerned the entire suit the principle of respondent judicata did not apply. Further, the High Court ought to have given the appellant benefit of Section 5, Limitation Act, as there was conflict of decisions regarding this question."
Learned counsel for the Receiver has half-heartedly tried to urge that the provisions of the Civil P. C. are not wholly attracted to the proceedings before the insolvency Court. Be that as it may, there is an affidavit of the counsel for the appellant Bank who has stated that he though that only one appeal was enough, but later on, by way of abundant caution, he put in the other appeal. The counsel for the appellant Bank, after perusing the abovementioned judgment of the Supreme Court could have genuinely though that it was not necessary to file the other appeal and so there exists a sufficient ground for condoning the delay, if any, and the delay is accordingly condoned.
In view of what is stated above, both these appeals (S. A. Os. 25 and 32 of 1969) are accepted with costs and the case is sent back to the lower appellate Court with the direction that it should decide the appeal of the State Bank on merits, and in accordance with law.
Appeal allowed.