Deemed winding-up order under company law excludes the preceding year for limitation in banking suits

An order under section 221 of the Companies Act, 1913 continuing a voluntary winding up under court supervision is deemed an order for winding up by the Court for purposes of section 45F of the Indian Banking Companies Act, 1949. The deeming fiction in section 225(2) of the Companies Act was applied in full, and its effect was not confined when read with the Banking Companies Act's supplemental scheme. As a result, the one-year period immediately preceding the winding-up order was excluded from limitation, and the suit was within time.

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Issues: Whether an order made under section 221 of the Companies Act, 1913, continuing a voluntary winding up under the supervision of the Court, is to be treated as an order for winding up by the Court for the purpose of section 45F of the Indian Banking Companies Act, 1949, so that the period of one year immediately preceding that order is excluded in computing limitation and the suit is within time.

Analysis: The statutory scheme of the Companies Act, 1913 and the Indian Banking Companies Act, 1949 was read together. Section 2 of the Banking Companies Act made its provisions supplemental to the Companies Act, while section 225(2) of the Companies Act declared that an order for winding up under supervision shall, for all purposes including the staying of suits, be deemed to be an order for winding up by the Court. The deeming fiction was given full effect, and the Court held that its necessary consequences could not be restricted when applying section 45F, which excludes one year immediately preceding the date of the winding-up order from limitation.

Conclusion: An order under section 221 of the Companies Act, 1913 is treated as an order for winding up by the Court for the purpose of section 45F of the Indian Banking Companies Act, 1949, and the suit was therefore within limitation.

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