Turner Morrison & Co. Ltd. v. Hungerford Investment Trust Ltd., AIR 1972 SC 1311

Turner Morrison & Co. Ltd. v. Hungerford Investment Trust Ltd., AIR 1972 SC 1311

Parties Involved

• Plaintiff: Turner Morrison & Co. Ltd.
• Defendant: Hungerford Investment Trust Ltd.

Facts of the Case

• The plaintiff filed a suit on 15th November 1965 to recover a sum of money from the defendant.
• This sum represented a tax liability of the defendant that had been discharged by the plaintiff before 15th November 1962.
• The defendant, a foreign company, was represented in the general meetings of the plaintiff company through its representatives.

Legal Issue

Whether Section 15(5) of the Limitation Act, 1963, which excludes the period of absence of a defendant from India in calculating the limitation period, could apply to Hungerford Investment Trust Ltd., given its foreign corporate status.

Held

• The Supreme Court of India held that Section 15(5) of the Limitation Act could be interpreted in two ways:
  1. Non-Applicability to Incorporated Companies: The provision does not apply to incorporated companies, as “residence” does not align with the nature of corporate entities.
  2. Presence through Activities: If it applies, companies must be deemed to reside in places where they actively carry on business or operations.
• Hungerford Investment Trust Ltd., as an investment company, had substantial activities in India:
  • It had invested large sums of money in Turner Morrison.
  • Its Board of Directors occasionally held meetings in India.
  • It participated in the general meetings of Turner Morrison through its representatives.
• Based on these facts, the Court concluded that the defendant was “residing” in India and could not be considered absent from the country under Section 15(5).
• Therefore, Section 15(5) could not be invoked by Turner Morrison to save the bar of limitation.

Conclusion

The suit filed by the plaintiff was barred by limitation as the defendant was not absent from India. The presence of Hungerford Investment Trust Ltd. in India, through its activities and representation, established its residency for the purposes of the Limitation Act.