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TMI Blog1938 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... culties. On 21st July, 1933, a notice was served on the appellant by the Company in respect of a meeting which was proposed to be held under Section 153, with a view to some arrangement or compromise being entered into. On 7th August, 1933, the appellant obtained a decree against the respondents for the amount of his deposit. We are told that on 20th August, 1933, there was a joint meeting of depositors and share-holders under the orders of the High Court of Calcutta. On 23rd August, the respondents paid the appellant Rs. 50 in part satisfaction of the decree. On 29th August, 1933, a scheme was filed pursuant to the provisions of the Companies Act. On 16th September a further sum of Rs. 50 in further part satisfaction of the decree was paid by the respondents to the appellant. On 19th March, 1934, a scheme to which I will refer in one moment was sanctioned by the High Court. On 16th September, 1935, the appellant applied to the Munsif to execute the decree for the balance outstanding against the respondents and, as I have stated above, the Munsif refused the application on the ground that the appellant and the respondents were bound by the arrangement or compromise which had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have it either set aside or modified in his own interest or in any other way. It seems to me clear that the appellant comes within the order. That order is binding on him and upon any person who seeks to execute his (the appellant's) decree and it is an order which Courts of execution have to obey. A very similar case to this is that in Mahiganj Loan Office, Ltd. v. Behari Lal Chaki, decided in December 1936 by a Division Bench of this Court consisting of Nasim Ali and R.C. Mitter, JJ. That Court came to a conclusion similar to that I have come to and I should like to read a passage from that judgment. It relates to similar proceedings under Section 153 of the Act. At page 409, the judgment proceeds: "The substance of the second ground is that the Court would not have sanctioned the scheme so far as it related to depositors who had already filed suits and obtained decrees, if the Court had applied its mind to the fact that it had not ordered a separate meeting of this class of depositors to be held, and that the interest of this class was opposed to that of the other depositors who had not filed any suits or obtained decrees. There is nothing to show that the Court, while s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by this Court on 19th March, 1934. Under the scheme, as it was sanctioned, no creditor could demand payment within a period of seven years from the date of the scheme and the depositor was held to be a creditor for purposes of the scheme irrespective of the fact as to whether or not a suit was already instituted by him against the company or a decree obtained. The contention of the appellant decreeholder, in substance, was, that he was not a depositor at the time when the scheme was put forward or sanctioned, but had become a decree-holder, and as there was no arrangement with the class of creditors to which he belonged, he was not hit by the scheme at all. The Courts below had negatived this contention on the ground that the depositors who obtained decrees against the company did not form a separate class from the others who had not obtained decrees and the scheme adopted by the majority of the creditors of the company was binding upon the appellant. Reliance was placed for this view upon two decisions of this Court, viz. , Batisal Loan Office Ltd. v. Sasthi Charan Bhaltacharjee and Semjganj Loan Office Ltd. v. Nilkantha Lahiri. I must say at the outset that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the creditors that the expression "depositor" would include depositors who have filed suits or obtained decrees against the company. Yet their Lordships held that the decree-holder depositor was not hit by such a scheme even though the notice was served upon him and they affirmed the judgment of Panckridge, J., who allowed a modification of the scheme by expunging from it certain words which prevented the decree-holder from executing his decree. In my opinion, the view taken in these cases is perfectly sound and I hold accordingly, that the depositors who have already obtained decrees do form a separate class from the ordinary depositors and it is necessary that there should be a separate meeting of such creditors before a scheme binding on them should be sanctioned by the Court. If the absence of any such separate meeting is brought to the notice of the Court which is invited to sanction the scheme binding on all the creditors, it should refuse to sanction it as was done by Cunliffe, J., in In re Melanda Loan Office Ltd., or the parties affected might apply for a modification of the scheme by expunging the clause which made the scheme binding on that class of creditors who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cal. 507 41 C.W.N. 952; 65 C.L.J. 367, and hold that as the defects which have been pointed out by Dr. Sen Gupta do not take away the foundation of the authority of the Court in granting a sanction under Section 153, Companies Act, they are at the most irregularities and do not render the sanctioned scheme a nullity in the eye of the law. In my opinion therefore this question cannot be raised before the executing Court. Dr. Sen Gupta has attempted to distinguish the present case from the other two cases which have been just mentioned by pointing out that in both of them the intention of the company was that the scheme would be binding on the entire body of creditors including the decree-holders and the only defects were that there was no proper service of notice upon the decree-holder or no separate meeting of the class of creditors to which the decree-holder belonged. In the present case it is said, there was no arrangement or composition with the general body of creditors at all, but it was made with a particular class, namely the depositors and hence there was no arrangement so far as the decree-holders are concerned to which the Court might be deemed to have granted sanction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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