1920 (2) TMI 2 - HC - Companies Law

Payment order not a decree for Limitation Act; application not time-barred. Clarification on setting aside ex parte orders.

The High Court determined that a payment order did not constitute a decree, thus Article 164 of the Limitation Act did not govern the application to set ... - Issues:1. Interpretation of the provisions of the Companies Act and the Limitation Act regarding setting aside an ex parte order.2. Determination of whether a payment order qualifies as a decree and its implications on limitation periods.3. Application of Article 181 of the Limitation Act to such applications.Analysis:1. The case involved an application made by the Liquidator under section 150 of the Companies Act, VI of 1882, for a payment order against the respondent. The District Judge passed an ex parte order against the respondent, which was later challenged as being time-barred. The issue revolved around the interpretation of the Companies Act and the Limitation Act, specifically Article 164, concerning the time limit for setting aside such orders.2. The appeal to the High Court raised questions regarding whether a payment order constituted a decree and if Article 164 of the Limitation Act applied. The Court determined that a payment order did not qualify as a decree, thus Article 164 did not govern the application. The Liquidator contended that the application fell under section 169 of the Indian Companies Act or Article 164 of the Limitation Act, but the Court disagreed and upheld the decision that the application was not time-barred.3. The Court considered the arguments presented regarding the absence of a provision in the Companies Act for setting aside an ex parte order. The respondent's counsel argued that the Civil Procedure Code provisions applied mutatis mutandis, and the Court had inherent power under section 151 to make suitable orders. The Court agreed with this interpretation and cited relevant case law to support the position.4. The issue of limitation periods for setting aside ex parte orders was also addressed. The Liquidator argued that Article 164 of the Limitation Act applied, citing that a payment order was akin to a decree. However, the Court noted the exclusion of adjudications from the definition of a decree if an appeal lay as an appeal from an order. Since an appeal was possible from a payment order under section 150, Article 164 did not apply.5. The Court ultimately dismissed the appeal, concurring with the decision under appeal and ordering costs to be paid. The judgment clarified the interpretation of the Companies Act and the Limitation Act in the context of setting aside ex parte orders, emphasizing the specific provisions and limitations applicable to such applications.