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TMI Blog2004 (4) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... of Respondent No. 4 Society and which shares were mutated in the name of the Applicants by Respondent No. 3 pursuant to the Order of Deputy Registrar of the Co-operative Societies, D Ward, dated 7th August 2000 in appeal proceedings being Appeal No. 3 of 1999. ( b )that the Respondent No. 1 and Nos. 3 to 8 and each of them be restrained from in any manner removing or causing to be removed the name of the applicants as a member of Respondent No. 4 Society and/or as holder of the said shares bearing distinctive Nos. 51 to 60 (both inclusive) (Certificate No. 11) in the capital of Respondent No. 4 Society and/or in any manner denying the right title and interest of the Applicants as the owner of the said Flat No. 9 on the 1st Floor and the basement in Echjay House, 31A, M.L. Dahanukar Marg, Bombay - 400 026 and/or in any manner denying the Applicants as a member of Respondent No. 4 Society. ( c )that the Respondent Nos. 1 and 3 to 8, their servants and agents be restrained by a permanent Order and Injunction of this Hon ble Court from in any manner interfering with or pre venting the Applicants and/or its directors or employees or servants and agents from exclusively and withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Applicant Company. As per the said agreement, abovenumbered Company Petition was filed before this Court along with connected Company Petition No. 272 of 1985, after the requisite sanction was obtained in this regard from the shareholders of both the Companies. This Court, by an order dated 3rd Septem ber1986, was pleased to sanction the proposed Scheme. The relevant portion of the said order reads thus : ". . .And this court doth order that with effect from the effective date namely the 1st day of January 1983, referred to in the Scheme of Arrangement hereby sanctioned the whole of the under taking of Kanjur Division belonging to Echjay Industries Private Ltd., the Transferor Company including all its assets and movable and immovable properties such as lands, hereditaments and premises together with all factory buildings, machinery and plant (the items of plant and machinery being listed in Annexure A to Scheme) in use for manufacturing business at Kanjur and lying or situated in or at Kanjur (except those mentioned in clause 2 of Part I of the Scheme and listed in Annexure B to the Scheme) furniture, fixtures, stores, stock of raw materials, stock in process and finis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the revision application and set aside the order passed by the Deputy Registrar, which was in favour of the applicant Company by judgment and order dated 9th March, 2001. While reversing the order passed by the Deputy Registrar, the revisional authority, inter alia, found that even though Respondent No. 4 had full authority to decide the membership issue either under section 22 or section 23 of the Maharashtra Co-operative Societies Act, however, there was dispute between the two companies, and it was, therefore, in the fitness of things that Respondent No. 4 ought to have directed the parties to first approach the two experts as was required by the order passed by this Court sanctioning the Scheme on 3rd September, 1986. The revisional authority further noted that the parties had relied on certain High Court proceedings touching the provisions of the Companies Act, 1956, in respect of which it had no authority and jurisdiction to comment upon. 4. Having regard to the observations made by the revisional authority, the Applicants have filed the present application for the reliefs already reproduced above. In substance, the case of the Applicants is that the revisional author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the period provided for by article 136, or, for that matter, article 137 of the Limitation Act. Reliance is placed on the decision of the Division Bench of this Court in the case of Re : Nilesh Lalit Parekh 2002(1) Bom. C.R. 357, which has clearly held that section 634 of the Companies Act, 1956, applies to any order made by the Court under that Act and for which reason, it will have to be enforced in the same manner as a decree made by a Court in a suit pending therein. Reliance was also placed on the decision of the Calcutta High Court in the case of Techno Metal India (P.) Ltd. v. Prem Nath Anand [1973] 43 Comp. Cas. 556 , wherein it was held, inter alia, that the petition filed under the Companies Act, having been filed within 12 years as provided by Article 136 of the Limitation Act, it was within time. Reliance is placed on those observations to contend that the provisions of the Limitation Act apply with full force to application, such as the present one. It was thus contended that the present application having been filed 12 years after the date of the order dated 3rd September, 1986, the same was barred not only by article 136, but also by article 137 of the Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct by the Court is very wide, but that would not mean that it can be exercised de hors the provisions of the Limitation Act. The Applicants are justified in relying on the dictum of the Apex Court in S.K. Gupta v. K.P. Jain AIR 1979 SC 734 to contend that section 392 of the Companies Act enables the Court, rather obligates the Court, to continually supervise the carrying out of the scheme over a period of time and to issue directions to overcome the difficulties so as to ensure proper working of the compromise and/ or arrangement. However, that enunciation cannot be construed to mean that it expressly or even impliedly extricates the application of the provisions of the Limitation Act to the proceedings such as the present one. On the other hand, in my considered opinion, the provisions of the Limitation Act will apply with full force even to the proceedings, such as the present one taken out under section 392 of the Companies Act. Reliance was placed on the decisions of the Apex Court in Union of India v. Popular Construction Co. [2001] 8 SCC 470, Hukumdev Narain Yadav v. Lalit Narain Mishra [1974] 2 SCC 133 and Vidyacharan Shukla v. Khubchand Baghel AIR 1964 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgument canvassed on behalf of the Respondents would seem to be attractive. However, in my opinion, what is required to be answered in the present application is to clarify the position and the doubts, which have been expressed by the revisional authority while considering the claim of the parties under the provisions of the Maharashtra Co-operative Societies Act though viewed in this perspective, it cannot be said that the relief that needs to be granted by this Court is in the nature of execution or implementation of the order dated 3rd September, 1986 as such. On the other hand, the decision in the present application will be one in the nature of and for supervising the carrying out of the compromise or arrange- ment, which is referable to section 392 of the Companies Act; and, more importantly, because as aforesaid, even the Revisional Authority under the provisions of the Maharashtra Co-operative Societies Act has expressed doubt, which is in relation to the proceedings before this Court under the provisions of the Companies Act and also made reference to the order passed by its Court which has approved the scheme of compromise or arrangement, as to its interpretation. So unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which, in substance, is a claim for the same relief, considered by the said authorities. I find no substance in this submission. As mentioned earlier, the application has been filed before this Court by the Applicants, essentially because of the observations made by the revisional authority as referred to earlier. By this application, the Applicants are essentially seeking clarification and directions in the matter, which is necessary for carrying out the compro- mise and/or arrangement as sanctioned by this Court. In my opinion, there is substance in the argument canvassed on behalf of the Applicants that the scope of section 392 of the Companies Act is wide enough to encompass the relief that I propose to grant by way of this application. Reliance has been rightly placed on the decision of the Apex Court in S.K. Gupta s case ( supra ). It will be apposite to reproduce the dictum of the Apex Court in para 13 of this decision in toto, which reads thus : "When a scheme is being considered by the Court, in all its ramifications, for according its sanction, it would not be possible to comprehend all situations, eventualities and exigencies that may arise while implementing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... angement. The only limitation on the power of the Court, as already mentioned, is that all such, directions that the Court may consider appropriate to give or make such modifications in the scheme, must be for the proper working of the compromise and/or arrangement." [Emphasis sup plied] (p. 739) It will be also apposite to advert to para 15 of this decision, wherein the Apex Court has approved the view taken by the Gujarat High Court in the case of Mansukhlal v. M.V. Shah, Official Liquidator, Liquidator of Hathising Mfg. Co. Ltd. [1976] 46 Comp. Cas. 279 while construing the provisions of section 392 of the Companies Act. The same reads thus : In this context the observations of the Gujarat High Court, extracted hereunder, in Mansukhlal v. M.V. Shah [1976] 46 Comp. Cas. 279 at pp. 290-291 can be referred to with advantage as it precisely lays bare the ambit and width of Court s power under section 392 : ". . .The framers of the company law in India have conferred statutory powers on the High Court to make such modifications in the compromise or arrangement as the Court may consider necessary for the proper working of the compromise and arrangement. The power of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the prevalent state of affairs, it can be done for the proper working of the compromise and arrangement, and subject to this limit on the Court s power, the power seems to be absolute and of the widest amplitude and it would be unwise to curtail it by process of interpretation. . . ." [Emphasis supplied] (p. 290) 8. Applying the tests laid down by the Apex Court in this decision, in my opinion, this Court is obliged to clarify the position and the doubt, as has been expressed by the revisional authority in its order dated 9th March, 2001. That course is permissible by virtue of the plenitude of powers, which is coupled with duty, under section 392 of the Companies Act, to con tinually supervise the carrying out of the compromise and/or arrangement and issue such directions as may be necessary for its proper working. It cannot be disputed that in para 5 of the order, the revisional authority has adverted to the pending proceedings before this Court and has also gone on record to observe that the order passed in favour of the Applicants for transferring the membership in its name was premature, because the authority failed to first direct the parties to the two experts, as wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion will be subject to compliances to be made by the Applicant Company in relation to the provisions of the Maharashtra Co-operative Societies Act and rules framed thereunder. 10. It was lastly argued on behalf of the Respondents that the scheme as sanctioned by this Court also recognises that in matters relating to subject flat and basement, opinion of the two named experts would be binding on the parties. It was argued that the experts have already issued directions in that behalf and the same would be binding on the parties, for which reason the Applicants are not entitled for the reliefs claimed in this application. This contention has been, in my opinion, rightly resisted on behalf of the Applicants on the grounds that, in the first place, the purported directions given by the two named experts cannot be reckoned for deciding the present application. Reliance has been rightly placed on the observations made in the decision of this Court dated 14th September 1990 in Company Application No. 191 of 1990, wherein the Court, after considering the submissions, has observed that it is an admitted position that the said directions have not been accepted by all members of Mansukhl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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