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National Small Industries Corporation Limited Vs. Industrial Metal Works (P.) Limited - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberAppeal No. 350 of 1977
Judge
Reported in[1984]55CompCas14(Cal)
ActsCompanies Act, 1956 - Sections 391, 392, 392(1), 392(2) and 398; ;Companies (Court) Rules, 1959 - Rule 86
AppellantNational Small Industries Corporation Limited
Respondentindustrial Metal Works (P.) Limited
Appellant AdvocateTarun K. Basu and ;Sankar Mitra, Advs.
Respondent AdvocateHirak Mitter, Adv.
DispositionApplication dismissed
Cases ReferredPvt. Ltd. v. New Kaiser
Excerpt:
- c.k. banerji, j. 1. this is an appeal from the order dated 19th may, 1977, made by the court below, in an application made by the appellant under sections 391 and 392 of the companies act, 1956. 2. one balabux singhania had made an application for the winding-up of industrial metal works (p.) ltd., the respondent above-named in this court. during the pendency of the said winding-up application the respondent made an application in this court under sections 391 and 392 of the companies act, 1956, proposing a scheme of compromise and/or arrangement between the respondent and its secured and unsecured creditors. by an order dated 16th march, 1970, this court sanctioned the said scheme and/or arrangement as modified. by and under a hire purchaseagreement dated 31st october, 1963, the.....
Judgment:

C.K. Banerji, J.

1. This is an appeal from the order dated 19th May, 1977, made by the court below, in an application made by the appellant under Sections 391 and 392 of the Companies Act, 1956.

2. One Balabux Singhania had made an application for the winding-up of Industrial Metal Works (P.) Ltd., the respondent above-named in this court. During the pendency of the said winding-up application the respondent made an application in this court under Sections 391 and 392 of the Companies Act, 1956, proposing a scheme of compromise and/or arrangement between the respondent and its secured and unsecured creditors. By an order dated 16th March, 1970, this court sanctioned the said scheme and/or arrangement as modified. By and under a hire purchaseagreement dated 31st October, 1963, the appellant had made over to the respondent on hire-purchase basis certain machinery and it was a creditor of the respondent when the said scheme was sanctioned. Clause 5B of the said scheme provided as under :

'The outstandings payable to National Small Industries Corporation will be paid at the rate of Rs. 20,000 per month commencing after from the date of handing over the possession of the factory and the withdrawal of the receivers.'

3. The State Bank of India was a secured creditor of the respondent and was also entitled to a payment of its dues under the said scheme. There is no dispute that the respondent had paid to the appellant an aggregate sum of Rs. 2,80,199.67 in payment of the said outstandings to the appellant. The first of such payment appears to have been made on 21st January, 1971, and the last payment on 7th September, 1972. The appellant, however, claimed from the respondent a further sum of Rs. 1,03,499.95, inter alia, on account of additional interest and penal interest.

4. Particulars of the said claim of the appellant are set out in para. 15 of the petition made by the appellant in the court below, relevant portion whereof reads as under :

'The company in terms of the said scheme of arrangement has paid to your petitioner an aggregate sum of Rs. 2,80,199.69 but has failed and neglected to pay the balance dues of your petitioner amounting to Rs. 1,03,499.95 as per the following particulars :

Particulars:

(a)Amount due towards H. P. instalments as on 30th September, 1970

Rs.

2,70,199.67

(b) Duetowards penal interest

75,240.70

(c) Duetowards additional interest

37,620.35

(d) Duetowards insurance

638.99

Less : Amount received fromJanuary, 1971, onwards

2,80,199.67

Liabilitiesof the firm as per bonus account as on 31st March, 1976

1,03,499.95.'

5. There was a lot of correspondence in this matter. By a letter dated 18th January, 1975, the deputy manager of the appellant wrote to the respondent that the respondent had made representation to the chairman of the appellant in August, 1974, but although 4 months had passed, yet there was no response from the respondent till then and that the appellant had decided to proceed with this matter to safeguard its interest if no response from the respondent was received within 15 days from thereceipt of the said letter. The next letter is dated 23rd April, 1975, from the respondent to the appellant intimating that IRCI had approved the reconstruction scheme for revival of the respondent, and it had accordingly received a letter of intent, one of the terms and conditions whereof related to a settlement of the matter with the appellant before disbursement of the funds and reopening of the factory and release of the charge of the extrusion plant under pledge with the appellant in favour of IRCI as arrears of principal and normal interest had already been paid to the appellant in accordance with the scheme. The appellant was requested to apprise its decision in the earliest possible time. Next letter is dated 22nd May, 1975, by the respondent to the appellant enclosing its earlier letter dated 23rd April, 1975, and a copy of a letter dated 5th May, 1975, from IRCI and again requesting to expedite the decision of the appellant at the earliest possible time, regarding release of the extrusion plant in favour of IRCI. The letter dated 5th May, 1975, of IRCI referred to above, inter alia, stated that it was the responsibility of the respondent to get the approval of the various institutions concerned to the terms and conditions of their letter of intent. The next letter is dated 13th June, 1975, written by the appellant to the IRCI, inter alia, informing IRCI that nearly Rs. 90,000 was due and payable by the respondent hirer towards principal and interest to the appellant and the appellant intended to file a suit immediately. The next letter is dated the 18th July, 1975, from the respondent to the appellant requesting the appellant to release the charge of the extrusion plant in view of the fact that all the arrear amount pertaining to principal as well as normal interests had been already paid off to the appellant according to the said scheme. On the 29th July, 1975, IRCI wrote to the respondent for being enlightened as to the dues of (the respondent to) the appellant, as the appellant represented that nearly Rs. 90,000 was still due and payable by the respondent towards principal and interest while the respondent's contention was that all arrear amount pertaining to principal as well as normal interest had already been paid according to the said scheme. Thereafter, by a letter dated 30th/31st October, 1975, IRCI wrote to the appellant that if the appellant agreed to the contentions of the respondent then their charge on the extrusion plant, purchased by the respondent under the hire purchase scheme, might be released at an early date. By a letter dated 24th September, 1975, the respondent, inter alia, informed IRCI that they had already paid Rs. 2,80,000 to the appellant as against their dues amounting to about Rs. 2,70,000 covering principal amount as well as normal interest according to the High Court scheme. The demand for penal interest amounting to Rs. 90,000 was over and above the principal and normal interest already paid. The respondent was not liable to paythe same as there was no mention thereof in the High Court scheme and further the demand of penal interest was not justifiable from a sick industry which was sick from 1967-68. By a letter dated 22nd November, 1975, the appellant informed IRCI that their dues were not wholly met. By a letter dated 28th November, 1975, the appellant, inter alia, asked the respondent to call at the office of the appellant and discuss the matter with the deputy manager regarding settlement of the dues and if no response was received within 15 days from the date of the letter, legal proceedings would be taken. The last letter is dated 15th December, 1975, from the respondent to the appellant, inter alia, asserting that Rs. 9,900 was paid in excess and disputing the liability to pay penal interest and requesting the appellant to give an opportunity to the respondent to represent its case at the forthcoming meeting of the Default Review Committee of the appellant which was going to be held shortly.

6. Thereafter, on or about 1st March, 1976, the appellant made the application herein in the court below, out of which this appeal arises. It is necessary to set out the relevant prayers made by the appellant in the said application :

'(a) The scheme of arrangement as sanctioned by this Hon'ble Court on March 16, 1970, be set aside .

(b) Alternatively, the said scheme of arrangement as sanctioned by this Hon'ble Court on March 16, 1970, be suitably modified so as to exclude your petitioner from the said scheme of arrangement.

(c) Your petitioner be relieved from its obligations, if any, under the said scheme of arrangement ;

(d) Leave be given to your petitioner to exercise its rights under the said hire purchase agreement ;

(e) The company be directed to return the said machinery and equipment described in annexure 'B' hereof to your petitioner.'

7. The learned judge of the court below disposed of the said application by an order dated 19th May, 1977, appealed against in the manner following :

'It is ordered that upon the said respondent company paying a sum of rupees ten thousand to the said applicant company within a month from the date hereof there will be no order on this application. And it is further ordered that in default of the payment of the said sum of Rupees ten thousand within the time aforesaid the said applicant company shall be relieved from the scheme sanctioned by the order dated the sixteenth day of March in the year one thousand nine hundred andseventy by this court and that the said applicant company shall be at liberty to file a suit against the said respondent company.'

8. Mr. Tarun K. Basu, appearing for the appellant, urged that the appellant made the application in the court below under Section 392 of the Companies Act, 1956. Under Clause (a) of Sub-section (1) of Section 392, the court had jurisdiction to supervise the compromise or arrangement, and, under Clause (b) the court may at any time after the order sanctioning the compromise or arrangement has been made give such directions in regard to any matter or make such modification in the compromise or arrangement as might be necessary for the proper working of the same. Under Sub-section (2) of the said section if the court found that the compromise or arrangement could not be worked satisfactorily with or without modification, the court might either on its own motion or on the application of a person interested in the affairs of the company make an order winding-up the company. Therefore, the court had jurisdiction either to set aside the said scheme of arrangement or to modify the same so as to exclude the appellant from the said scheme or relieve the appellant from its obligation under the scheme. But the learned judge without going into such question or without deciding the claim of the appellant arbitrarily arrived at the figure directing payment by the respondent to the appellant of only a sum of Rs. 10,000 and, in default, gave the appellant leave to file a suit against the respondent. It was submitted that as the learned judge made the order for payment of Rs. 10,000 he must have been satisfied that the appellant had a just claim against the respondent. The respondent, it will appear from the correspondence, was asking for waiver of penal and additional interest, which clearly presupposes that it had a liability for such interest. It was urged that under Clause 5B of the said scheme the outstandings of the appellant were payable by the respondent. Under the hire purchase agreement the outstandings included penal and additional interest. It was submitted that it would appear from Clause 14 of the hire purchase agreement that although the nomenclature was penal interest yet it was not in fact penal but was a further interest payable on the amount of instalment in respect whereof there was a default in payment. In any event, whether such interest was penal in nature, and, as such, irrecoverable, was a matter which could be decided only on evidence. Mr. Basu submitted that the respondent no doubt paid the sum of Rs. 10,000 by a cheque on the 20th May, 1977, the next day after the said order was made but the appellant could not accept the same. The order for payment of Rs. 10,000 only was without any basis and arbitrary.

9. Mr. Hirak Hitler, appearing for the respondent, contended that the said scheme could not be varied or modified or set aside in the absence ofany notice to the other parties to the scheme whose rights are likely to be affected by any variation or modification or setting aside of the scheme. Thus, the application in the court below and consequently the appeal was not maintainable. An advertisement should have been issued informing the creditors and other parties who are bound by the scheme before the scheme was varied or modified or cancelled. It was next urged that in the petition in the court below neither sufficient particulars were given nor any statement of accounts was disclosed as to the mode and method of calculation of the alleged penal interest or additional interest claimed by the appellant. The alleged particulars given in para. 15 of the petition do not give any details and set out only lump sum amounts without any basis thereof. There is no satisfactory evidence before the court that the said amount was or is actually due or payable by the respondent. In any event, the alleged claim for such interest being penal in nature, the court would refuse to enforce the same. The rate of interest charged as penal interest could not be the determining factor. It was next urged that the scheme was sanctioned by the order dated 16th March, 1970, and the appellant had been receiving payment under the scheme since 21st January, 1971, and the last payment was received by it on the 7th September, 1972. The scheme has satisfactorily worked out for so many years. It would be inequitable to vary or modify or set aside the scheme after a gap of over 3 years. It was next urged that none of the prayers made by the appellant in the said application could be granted. The court could exercise its powers only under Sub-section (2) of Section 392 of the Companies Act, 1956, and make an order of winding up of the respondent but this could be done by the court only if it was satisfied that the said scheme could not be worked satisfactorily either with or without modification. The court exercising its powers under Section 392 could not set aside the scheme or exclude the appellant from the scheme or relieve it from its obligations under the scheme nor could the court grant leave to the appellant to exercise its alleged rights under the hire purchase agreement or direct the respondent to return the machinery covered by the hire purchase agreement. No case has been made out by the appellant that the said scheme could not be worked out satisfactorily. The only case made out was that the alleged claim of the appellant for additional interest or penal interest has not been paid. It was next urged that the said application in the court below was barred by limitation. Under Article 137 of the Limitation Act, 1963, the application could be made within 3 years from the date when the right to apply accrued. Under Clause 5B of the scheme the outstanding payable to the appellant were to be paid by the respondent at the rate of Rs. 20,000 per month from a particular period. There is a dispute that first of such payment was made by therespondent on the 21st January, 1971, and the last payment was made on the 7th September, 1972, and no payment was made thereafter. Thus, the first breach, if any, must have occurred in October, 1972. From the correspondence it would appear that the appellant was demanding Rs. 90,000 on account of penal interest. To pay off the said amount at the rate of Rs. 20,000 per month in accordance with the scheme a period of 5 months was required. Thus, the last breach would occur in January or February, 1973, when the alleged cause of action for the application herein accrued to the appellant but the judges' summons in the said application was taken out on the 1st March, 1977, that is, long after the expiry of the period of limitation. The said application was, therefore, hopelessly barred by limitation. The contention was that even if leave is granted by this court to the appellant to exercise its rights under the hire purchase agreement any application that might be made by the appellant to enforce such right pursuant to such leave would be barred by limitation. It was lastly urged that the petition in the court below made by the appellant was demurrable. There is no averment in the petition that the scheme was unworkable. Only averments that were made in support of the said application were to be found in paras. 17 and 20 of the petition but that was only with regard to the alleged failure or neglect of the respondent in honouring its obligations under Clause 5B of the said scheme in paying off the outstandings of the appellant. The allegation made in para. 20 that the said scheme is being used by the respondent as a shield to evade payment of the lawful claims of its creditors is hopelessly vague without any particulars. The orders asked for by the appellant would result in preferential treatment to the appellant vis-a-vis the other creditors of the appellant which this court would refuse to do.

10. Mr. Mitter in support of his contentions cited the following decisions : (1) L.A. Chaugule v. New Kaiser-I-Hind Spinning & Weaving Co. Ltd. reported in [1968] 2 Comp LJ 26, where Vimadalal J. of the Bombay High Court observed that the mere fact that the company did not pay the claim of the applicant might be a ground for its winding up after giving a statutory notice under Section 434 of the Companies Act, 1956, but that would not show that the scheme has become unworkable. To show that the scheme has become unworkable necessary facts and figures should be placed before the court which would show that the scheme cannot be worked out. Mere allegation that the company was commercially insolvent without proper facts and figures would not lead the court to come to the conclusion that it has to act under Section 392(2) of the Companies Act, 1956.

(2) D.S. Venkatraman v. Gujarat Industries Pvt. Ltd. reported in [1977] 47 Comp Cas. 352 ; [1977] Tax LR 2323. Here, Agarwal J. of the Bombay High Court considered the scope of Sub-sections (1) and (2) of Section 392 of the Companies Act, 1956, and observed (at p. 2324 of Tax LR and p. 354 of 47 Comp Cas) :

' The purpose of Sub-section (2) of Section 392 is that where the court is satisfied that a scheme sanctioned under Section 391 cannot be satisfactorily accomplished, the court ought to wind up such a company. The fact that Parliament equips the court with power to come into action of its own motion indicates that the court should not allow the sanctioned schemes to drag on. Where the court finds to its satisfaction that a sanctioned scheme cannot be worked out satisfactorily with or without modifications being made in it, the court must close that chapter by winding up. The court exercises supervisory powers over the carrying out into reality the schemes sanctioned by it. If any difficulties arise in the working out of a scheme, the court can modify the same, so that its purpose can be achieved for the mutual advantage and benefit of the company and the class of its creditors or members who are parties to it.'

(3) J.K. (Bombay) Pvt. Ltd v. New Kaiser-I-Hind Spinning & Weaving Co. Ltd. reported in : [1969]2SCR866 , Here, the Supreme Court observed as follows (at p. 1054 of AIR and at pp. 706, 711 of 40 Comp Cas):

'Under Section 392 of the Act the High Court which has sanctioned the scheme has the power to supervise the carrying out of it and to give directions with regard to any matter or to make modifications in it as it may consider necessary for its proper working. But if the court is satisfied that the scheme cannot be worked satisfactorily with or without modifications, it can either suo motu or on an application by any person interested in the company's affairs order its winding up.....Sub-section (2) of Section 391 of the Act allows the decision of the majority prescribed therein to bind the minority of creditors and shareholders and it is for that reason that a scheme is said to have statutory operation and cannot be varied by the shareholders or the creditors unless such variation is sanctioned by the court. The effect, therefore, of a scheme between a company and its creditors is that so long as it is carried out by the company by regular payment in terms of the scheme a creditor who is bound by it cannot maintain a winding-up petition. But if the company commits a default, there is a debt presently due by the company and a petition for winding up can be sustained at the instance of a creditor. The scheme, however, does not have the effect of creating a new debt ; it simply makes the original debt payable in the manner and to the extent provided in the scheme.'

11. Mr. Tarun K. Basu submitted in reply that the points urged by Mr. Mitter were neither taken in the grounds of appeal nor in the court below nor any cross-objection has been filed by the respondent. Therefore, Mr. Mitter was not entitled to urge those points. It would appear from para. 9 of the affidavit-in-opposition to the said application, filed on behalf of the respondent in the court below, affirmed by one Sri Krishna Chowdhury on the 21st March, 1977, that the respondent had no other creditor. Therefore, there is no question of giving any notice or publishing any advertisement as urged by Mr. Mitter. In any event the order dated 16th March, 1970, sanctioning the scheme clearly provided that the parties to the scheme or other persons interested shall be at liberty to apply to this court for any directions that might be necessary in regard to the working of the scheme. Thus, the appellant had the right to make the said application. Under Clauses (a) and (b) of Sub-section (1) of Section 392 the court has power to supervise the carrying out of the scheme and to give directions or make modifications to the scheme at any time after the order sanctioning the scheme had been made by the court. The petition in the court below made by the appellant was posted for directions before the learned Judge. If there was any default on the part of the appellant in complying with the Companies (Court) Rules, 1959, or with regard to any directions as regards advertisements or service of the petition, learned judge could dismiss the petition or give such further directions under Rule 31 of the said Rules. But neither of these courses was adopted by the learned Judge. Under Rule 86 of the said Rules, the court was entitled, at any time after the order sanctioning the scheme either of its own motion or on the application of any person interested to make an order for submission to the court, within such time as the court might fix, a report on the working of the scheme and on a consideration of such report the court might pass such orders or give such directions as it might think fit. Although the said application was made by the appellant the court did not ask for any such report but nevertheless the court had power to make such orders or give such directions as it might think fit. Thus, the court could make the orders or any of the orders which were all in the alternative as prayed for by the appellant. Under Sub-rule (1) of Rule 87 of the said Rules, the appellant had liberty to apply to the court for the determination of any question relating to the working of the said scheme. Under Sub-rule (2) of the said rule, such application was to be posted before the court for directions as to issue of notices and advertisement as the court might direct and under Sub-rule (3) the court had power to give such directions and to make such modifications to the scheme as it might consider necessary for the proper working thereof or pass such other orders as it might think fit in the circumstances of the case. Thus, therewas no question of issue of any notice or any advertisement unless the court so directed, which the court did not direct in this case. Thus under Section 392(1) read with the above rules the court retained jurisdiction to supervise the scheme and the working thereof and to make orders modifying the same without issue of any notice or advertisement, which was a matter of discretion of the court.

12. It was submitted that Clause 10 of the said scheme operated as an injunction against the appellant in commencing any suit or proceeding against the respondent and as already submitted the said scheme gave liberty to the appellant to approach the court at any time. So long as the said injunction operated there was no question of any bar of limitation. Reference was made to Section 15 of the Limitation Act. The appellant being a party to the said Scheme could not take any proceedings without the leave of the court and unless it was relieved of its obligations under the said scheme. Under Article 112 of the Limitation Act as amended, the right of suit by the appellant against the respondent was not barred, the respondent being a Government company.

13. It was lastly submitted that in para. 20 of the petition, in the court below, the appellant had made out a definite case that the said scheme could not be worked due to the failure and/or neglect and/or laches of the respondent and the said scheme was being used by the respondent to evade payment of the lawful claims of its creditors and it was just and equitable that the respondent should be wound up. Although no such specific prayer was made either in the judges' summons or in the petition, the court had power to grant relief and mould the prayers in the interest of justice.

14. After the court has made an order sanctioning a compromise or arrangement under Section 391 of the Companies Act, 1956, the powers which could be exercised by the court thereafter are embodied in Section 392 of the Act. The court has no further or other powers apart from those contained in Section 392 of the Act.

15. The appellant had prayed in the court below for the setting aside or a modification of the scheme so as to exclude the appellant from the said scheme or being relieved of its obligations thereunder and for leave to exercise its rights under the hire purchase agreement. The said prayers were based on the claim of the appellant for Rs. 1,03,499.95, inter alia, for additional interest and penal interest which according to the appellant was due to it but had not been paid by the respondent. No doubt, in para. 20 of the petition in the court below the appellant had pleaded for a winding-up of the respondent on the ground that the said scheme could not be worked out due to the failure or neglect or laches ofthe respondent and the said scheme was being used by the respondent as a shield to evade payment of the lawful claims of its creditors but there are no particulars as to who are the creditors apart from the appellant whose lawful dues have not been paid by the respondent. There are also no particulars or grounds, apart from the allegation of failure or neglect or laches of the respondent to pay the claim made by the appellant, as to how and on what grounds the said scheme has become unworkable. A mere allegation without particulars or grounds that the scheme cannot be worked out or has become unworkable is not sufficient to induce the court to make an order for winding up under Sub-section (2) of Section 392 of the Companies Act, 1956. The petitioner has to satisfy the court that the scheme cannot be satisfactorily worked out with or without a modification being made thereto and only then the court would make such an order. Here, the claim of the appellant is seriously disputed by the respondent. There are no particulars as to how the said claim was calculated or arrived at. The court might have to go into the question, and, if necessary, might have to take evidence as to whether the additional and penal interest was, in fact, payable by the respondent and also as to the amount thereof. The court will not make an order of winding-up under Section 392(2) of the Companies Act, merely because a particular creditor covered by the scheme is making a claim which is not only seriously disputed by the company but also when its quantum is not satisfactorily proved or established. The court can make an order of winding-up only when it is satisfied that the scheme as sanctioned has become unworkable. This, in our view, the appellant has failed to establish. Under Clause (a) and Clause (b) of Sub-section (1) of Section 392, the court has supervisory powers and jurisdiction in the matter of carrying out the scheme and for the purpose of working out the same may make orders or give directions and even modify the scheme from time to time. This power of the court is preserved for carrying out and to give effect to the scheme and not the negation thereof. What the appellant had prayed for was that the said scheme should not be carried out or given effect to in so far as the appellant was concerned and even for setting aside of the entire scheme. This, in our view, is neither the scope nor the ambit either of Sub-section (1) or of Sub-section (2) of Section 392 of the Companies Act. In our opinion, none of the prayers made by the appellant in the court below came within the scope or purview of Sub-section (1) or Sub-section (2) of Section 392 of the Companies Act. The liberty to apply given under the order dated 16th March, 1970, was to obtain any direction that might be necessary in regard to the working of the scheme and not with regard to non-working of the scheme either as a whole or with regard to any particular party or creditor. On the above view of the matter, the application made by the appellant in the court below does notappear to be maintainable and was wholly misconceived. Accordingly, we are bound to hold that the learned judge of the court below could not and should not have made the order appealed from. We are unable to accpt the contention on behalf of the appellant that the learned judge of the court below must have been satisfied as to the validity of the claim of the appellant and he, therefore, made the order directing payment by the respondent of a sum of Rs. 10,000 with a default clause. No order for payment was asked for by the appellant. Therefore, there was no scope for making any order for payment. Secondly, if the learned judge was satisfied as to the validity of the claim of the appellant he should have made an order for payment of the entire claim. There is neither any basis nor any reason for reduction of the claim to a paltry sum of Rs. 10,000 only.

16. On the view that we have taken, it is not necessary to go into or decide the various other points raised and urged by the parties in this appeal. If a default has been committed by the respondent in payment of the dues of the appellant in terms of the scheme, we do not find that Clause 10 of the said scheme would be a bar in the way of the appellant to take appropriate proceeding against the respondent for the recovery of such dues. Clause 10 would be attracted, in our view, in the matter of commencement of any proceeding by a creditor bound by the scheme so long as the respondent would honour and make payment in accordance with the scheme. The observations of the Supreme Court in J. K. (Bombay] Pvt. Ltd. v. New Kaiser-I-Hind Spinning & Weaving Co. Ltd. : [1969]2SCR866 , indicate that no leave of the court was necessary to be taken by the appellant from the court for the commencement of any proceeding against the respondent for a recovery of its dues in respect whereof defaults have been committed by the respondent in payment in terms of the scheme. The appellant is, therefore, at liberty to take appropriate proceedings against the respondent for the enforcement of its claim if it is otherwise maintainable in law.

17. For all the above reasons the order made by the learned judge of the court below cannot be sustained and is accordingly set aside and the appeal is allowed. The application of the appellant before the court below is also dismissed with no orders as to costs.

18. In the facts and circumstances of the case, each party will pay and bear its own costs of this appeal. The undertaking given by the respondent to continue for a period of three weeks.

R.M. Datta, J.

19. I agree.


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