2008 (4) TMI 506 - HC - Companies Law

Compromise and arrangement - Held that - On hearing the appellant in person we find no merit in the appeal. The appellant and his mother objected to the scheme. The scheme was permitted to be proceeded with only on the claim of the appellant being satisfied. Such satisfaction arose on account of receipt of consideration agreed to be paid for the sale of shares for rupees eight lakhs. Thus the right and interest of the appellant and his mother arising from the holding of shares stood extinguished in terms of the arrangement arrived at on November 28 1983 and the consideration deposited in pursuance thereto and paid thereafter except the amount detained towards the estate duty liability. The appellant and his mother had specifically agreed that the scheme would remain in operation. As to whether the scheme has been properly implemented or not and what is the consequence thereof would be for the learned company judge to consider. However the appellant has no role to play in the same and the only entitlement of the appellant left was about the claim of some interest on an unpaid amount of 50, 000 detained for estate duty clearance in respect of shares inherited by the said two persons. The appellant is now claiming to raise stale issues to put impediments possibly arising from the appreciation of the real estate value of the plots which were agreed to be sold. Appeal dismissed.

Issues:
1. Winding up petition and scheme under section 391 of the Companies Act, 1956.
2. Allegations against the official liquidator for failure to revive the company.
3. Dispute regarding the entitlement to interest on a specific amount.
4. Allegations of improper implementation of the scheme and sale of properties without permission.
5. Appellant's objection to the scheme and the subsequent settlement.

Issue 1: Winding up petition and scheme under section 391 of the Companies Act, 1956:
The judgment discusses a winding-up petition filed for a company and the subsequent sanctioning of a scheme under section 391 of the Companies Act, 1956 to revive the company. The order provided for no alienation of immovable properties, with the official liquidator overseeing the scheme's progress. The appellant claimed the company was never revived as per the scheme.

Issue 2: Allegations against the official liquidator for failure to revive the company:
The appellant alleged that the official liquidator failed to report on the non-revival of the company, leading to doubts about the scheme's implementation. The appellant filed a petition for action to protect properties, as the official liquidator reported no company at the given address, indicating a failure of the revival scheme.

Issue 3: Dispute regarding entitlement to interest on a specific amount:
A dispute arose regarding the appellant's entitlement to interest on a specific amount, with a decision rendered against the appellant on the interest calculation, which was challenged in the appeal.

Issue 4: Allegations of improper implementation of the scheme and sale of properties without permission:
Allegations were made against the official liquidator for failing to act in accordance with the law regarding the scheme, including the sale of properties without permission. The court noted modifications to orders allowing the sale of specific properties, raising concerns about the scheme's proper implementation.

Issue 5: Appellant's objection to the scheme and the subsequent settlement:
The appellant and his mother objected to the scheme, but a settlement was reached where they agreed to sell their shares, leading to the scheme's continuation. The court found no merit in the appeal, stating that the appellant's rights and interests were extinguished by the settlement, and the appellant had no role in the scheme's implementation.

In conclusion, the court dismissed the appeal, stating that the appellant's only remaining entitlement was to claim interest on an unpaid amount, and the appellant's attempts to raise issues were seen as potentially obstructive. The judgment highlighted the importance of the settlement in extinguishing the appellant's rights and the court's role in overseeing the scheme's implementation.

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