2004 (1) TMI 387 - HC - Companies Law

Summary

Issues Involved:
1. Declaration of rights governed by the sanctioned scheme.
2. Discharge of the Court Receiver.
3. Maintainability of the Chamber Summons.
4. Binding nature of the sanctioned scheme on the claimants.
5. Entitlement to recover amounts under consent terms.
6. Jurisdiction of the High Court in relation to B.I.F.R. proceedings.
7. Satisfaction of the decree under Order XXI, rule 2, C.P.C.

Detailed Analysis:

1. Declaration of Rights Governed by the Sanctioned Scheme:
The Respondents sought a declaration that the rights of the Claimants are governed by the sanctioned scheme dated 30th October, 2002, read with the order dated 16th January, 2003, and not by the consent terms dated 20th January, 2000, and 31st July, 2000. The Court held that the final scheme formulated by the B.I.F.R. binds the Claimants, as it crystallizes their claim against the Respondent Company. The scheme is statutorily binding on the Claimants, as per sections 18(8), 19(2), and 32 of the SICA.

2. Discharge of the Court Receiver:
The Respondents also prayed for the discharge of the Court Receiver appointed in the Award/Arbitration Proceedings and Execution Proceedings, with directions to hand over formal possession of the hypothecated equipment back to the Respondents. The Court granted this relief, noting that the Respondents had already paid more than the amount provided for in the final scheme.

3. Maintainability of the Chamber Summons:
The Claimants argued that the Chamber Summons was not maintainable since the execution application had already been disposed of. However, the Court found that the Chamber Summons was maintainable under section 47 of the Code of Civil Procedure, as it raised questions related to the execution or satisfaction of the decree.

4. Binding Nature of the Sanctioned Scheme on the Claimants:
The Court emphasized that the sanctioned scheme is binding on the Claimants due to the statutory provisions of the SICA. The Claimants had initially consented to the original proposal with reservations only regarding the cut-off date. The final scheme, which was formulated after following the necessary procedures, binds the Claimants, and their claim is crystallized as per the scheme.

5. Entitlement to Recover Amounts Under Consent Terms:
The Claimants contended that they were entitled to recover amounts as per the consent terms. However, the Court held that the Claimants could not recover any further amounts beyond what was provided for in the final scheme. The argument that the decree had not been satisfied was rejected, as the final scheme binds the Claimants, and they can only recover amounts in conformity with the scheme.

6. Jurisdiction of the High Court in Relation to B.I.F.R. Proceedings:
The Court noted that entertaining the Claimants' grievance would amount to questioning the correctness of the scheme framed by the B.I.F.R., which is barred under section 26 of the SICA. The High Court does not have jurisdiction over matters that the B.I.F.R. or the Appellate Authority is empowered to determine under the SICA.

7. Satisfaction of the Decree Under Order XXI, Rule 2, C.P.C.:
The Claimants argued that the decree had not been satisfied as per Order XXI, rule 2, C.P.C. The Court, however, held that the final scheme binds the Claimants, and they are not entitled to any further claims beyond what is provided for in the scheme. The fact that the decree had not been satisfied or that it was a consent decree was of no avail to the Claimants.

Conclusion:
The Chamber Summons was made absolute in terms of prayer clauses (a) and (b), declaring that the rights of the Claimants are governed by the sanctioned scheme and discharging the Court Receiver. The operation of the order was stayed for six weeks to allow the Claimants to appeal.