Limitation in liquidation claims: cumulative exclusions apply, but chit fund activity is not banking and trust exemption fails.

In liquidation claims governed by article 137 of the Limitation Act, the liquidator's right to apply accrues when the Supreme Court authorises filing of claims, and a later non-pressed special leave petition does not defer limitation. The exclusion under section 458A of the Companies Act and the three-month exclusion under section 15(3) of the Limitation Act are distinct and may be applied cumulatively. A chit fund business is not "banking" unless it satisfies the statutory indicia of banking, including acceptance of withdrawable deposits, so the special banking limitation rule does not apply. The relationship was treated as debtor and creditor, not a trust, so section 10 of the Limitation Act was inapplicable and the claim remained time-barred.

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Issues: (i) Whether the official liquidator was entitled, in computing limitation for claims under section 446(2) of the Companies Act, 1956, to exclude the period under section 15(3) of the Limitation Act, 1963 in addition to the exclusion under section 458A of the Companies Act, 1956; (ii) Whether the pendency of the special leave petition postponed the accrual of the right to apply under article 137 of the Limitation Act, 1963; (iii) Whether the company's chit fund business was "banking" so as to attract section 45-O of the Banking Regulation Act, 1949; (iv) Whether section 10 of the Limitation Act, 1963 applied on the footing that the relationship was one of trust.

Issue (i): Whether the official liquidator was entitled, in computing limitation for claims under section 446(2) of the Companies Act, 1956, to exclude the period under section 15(3) of the Limitation Act, 1963 in addition to the exclusion under section 458A of the Companies Act, 1956.

Analysis: The claim was governed by article 137 of the Limitation Act, 1963, and the right to apply accrued when the Supreme Court enabled the liquidator to file claims. The exclusion under section 458A of the Companies Act, 1956 was available, and the three-month exclusion under section 15(3) of the Limitation Act, 1963 was held to be an additional and distinct period of exclusion. The Court rejected the contention that section 458A displaced the exclusion under section 15(3).

Conclusion: The liquidator was entitled to exclude the additional three months under section 15(3) of the Limitation Act, 1963, in addition to the period under section 458A of the Companies Act, 1956.

Issue (ii): Whether the pendency of the special leave petition postponed the accrual of the right to apply under article 137 of the Limitation Act, 1963.

Analysis: The relevant starting point was the Supreme Court's judgment directing the liquidator to file claims. Once that direction was made, the right to apply had accrued. The later dismissal of the special leave petition as not pressed did not postpone the commencement of limitation.

Conclusion: The pendency of the special leave petition did not defer the start of limitation under article 137 of the Limitation Act, 1963.

Issue (iii): Whether the company's chit fund business was "banking" so as to attract section 45-O of the Banking Regulation Act, 1949.

Analysis: Banking requires acceptance of deposits withdrawable by cheque, draft, order or otherwise, and the company did not satisfy that requirement. It also did not carry on business under the statutory indicia associated with banking and lacked the necessary licence. The chit fund activity was not treated as banking for purposes of the special limitation provision.

Conclusion: Section 45-O of the Banking Regulation Act, 1949 was not applicable.

Issue (iv): Whether section 10 of the Limitation Act, 1963 applied on the footing that the relationship was one of trust.

Analysis: The transaction was held to be one of debtor and creditor, not a trust in which property had become vested for a specific purpose within the meaning of section 10. The liquidator could not treat the prized subscriber as a trustee so as to exclude limitation altogether.

Conclusion: Section 10 of the Limitation Act, 1963 did not apply.

Final Conclusion: The claim remained time-barred even after allowing the additional exclusion of three months, and the dismissal of the claim was upheld.

Ratio Decidendi: For claims by a liquidator under article 137 of the Limitation Act, 1963, the exclusions under the Limitation Act may be cumulatively applied with section 458A of the Companies Act, 1956, but a chit fund debtor is not a trustee and the special banking limitation provision does not apply unless the business satisfies the statutory definition of banking.

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