Banking Regulation Act, 1949
Section 45O - Special Period of Limitation
Section 45O of the Banking Regulation Act, 1949 creates special limitation rules for claims connected with a banking company that is being wound up. It operates through a non-obstante clause and gives specified claims a treatment different from ordinary limitation rules.
Meaning and scope of Section 45O
The expression "special period of limitation" refers to a statutory departure from the ordinary rules governing the time within which legal proceedings may be brought. Section 45O applies in the context of a banking company being wound up and protects the ability of the banking company or liquidator to pursue specified claims.
The section begins with the words "Notwithstanding anything to the contrary", which is a non-obstante formulation. In practical terms, the special rule in Section 45O prevails where it conflicts with the limitation provisions referred to in the section or another law for the time being in force.
Statutory text of Section 45O
45-O. Special period of limitation.
(1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (9 of 1908) or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of the presentation of the petition for the winding up of the banking company shall be excluded.
(2) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (9 of 1908) or section 543 of the Companies Act, 1956 (1 of 1956) or in any other law for the time being in force, there shall be no period of limitation for the recovery of arrears of calls from any director of a banking company which is being wound up or for the enforcement by the banking company against any of its directors of any claim based on a contract, express or implied; and in respect of all other claims by the banking company against its directors, the period of limitation shall be twelve years from the date of the accrual of such claims or five years from the date of the first appointment of the liquidator, whichever is longer.
(3) The provisions of this section, in so far as they relate to banking companies being wound up, shall also apply to a banking company in respect of which a petition for the winding up has been presented before the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953).
Section 45O(1): exclusion of time after winding-up petition
Sub-section (1) deals with computation of limitation for a suit or application by a banking company that is being wound up. The period beginning on the date on which the winding-up petition is presented is excluded when the limitation period is calculated.
This is an exclusion-of-time rule. It does not merely add a fixed number of years; instead, it directs that the specified period be left out of the limitation computation.
Section 45O(2): claims against directors
Sub-section (2) creates two categories of claims against directors. First, no period of limitation applies to recovery of arrears of calls from a director or to enforcement against a director of a claim based on an express or implied contract. Second, for other claims by the banking company against its directors, the limitation period is twelve years from accrual of the claim or five years from the first appointment of the liquidator, whichever period is longer.
The wording is intentionally broad and is tied specifically to claims by a banking company in winding up against its directors.
Section 45O(3): earlier winding-up petitions
Sub-section (3) gives the section retrospective reach in a limited statutory sense. The winding-up related provisions also apply where the winding-up petition had been presented before commencement of the Banking Companies (Amendment) Act, 1953.
Amendment notes
| Change | Legislative note |
|---|---|
| Reference to section 543 of the Companies Act, 1956 | Substituted by Act 95 of 1956, section 14 and the Schedule, for the earlier reference to section 235 of the Indian Companies Act, 1913. |
| Longer-period formula | The words providing "or five years from the date of the first appointment of the liquidator, whichever is longer" were inserted by Act 33 of 1959, section 32, with effect from 1 October 1959. |
Official source and related provisions
For the current central Act listing, refer to the Banking Regulation Act, 1949 on India Code. You may also continue through the related internal provisions below.
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