Fixed deposit recovery and limitation: later trust arrangements could not override statutory requirements or bar the plaintiff's claim.

Fixed deposit rights were held to be replaced only to the extent of the composition scheme sanctioned under the Companies Act, and later trust arrangements could not displace the plaintiff's right to recover from the bank without compliance with statutory requirements for creditor assent and formalities. The alleged deed of release was ineffective for want of registration, and part performance could not override mandatory statutory requirements. On limitation, Article 60 of the Limitation Act applied only to money deposited under an agreement payable on demand; this fixed deposit was payable at a specified time, so the suit was not barred, and the plaintiff's minority and the composition scheme timetable also supported timeliness.

---

---

Issues: (i) Whether the composition scheme and subsequent trust arrangements displaced the plaintiff's right to recover the deposit from the bank; (ii) Whether the suit was barred by limitation.

Issue (i): Whether the composition scheme and subsequent trust arrangements displaced the plaintiff's right to recover the deposit from the bank.

Analysis: The fixed deposit rights were replaced by the rights created under the composition scheme sanctioned under section 153 of the Indian Companies Act. The later supplementary arrangement could not bind the plaintiff unless it complied with the statutory requirements governing arrangements with creditors in voluntary winding up. The trustees had no authority to substitute the liability of the bank in favour of third parties without the requisite assent of creditors, and the alleged deed of release was ineffective as it was unregistered. The doctrine of part performance could not be used to defeat mandatory statutory requirements or create a transfer where the law required compliance with formalities.

Conclusion: The plaintiff's cause of action against the defendant bank remained subsisting and was not displaced by the later arrangements.

Issue (ii): Whether the suit was barred by limitation.

Analysis: Article 60 of the Indian Limitation Act applied only to money deposited under an agreement payable on demand. The fixed deposit in question was payable at a specified time after three months and was not a demand deposit. The claim was also protected by the plaintiff's minority and by the time allowed under the sanctioned composition scheme for the debentures to mature.

Conclusion: The suit was within limitation.

Final Conclusion: The bank's defences failed, the plaintiff's right to recover was upheld, and the decree in his favour was maintained.

---