1. This is an application on behalf two persons who have obtained decrees against the Dewangunj Bank & Industry Ltd., for an order modifying a scheme sanctioned by this Court under Section 153, Companies Act, by an order made on 17th July 1933.
2. The circumstances were that the present petitioners ware depositors in the company and on 3rd January 1933 they obtained a decree against the company for Rs. 2,561 being the amount of their claim. They thereupon, as it has been submitted and in my judgment rightly, ceased to be depositors 'and became decree-holders against the company. The decree provided for payment by instalments extending over six years. The decree has been recognised by the bank, a payment having been made on 13th April 1933. Subsequently thereto the company embarked upon a scheme to which the sanction of the Court would be required under Section 153, Companies Act, and the usual orders were made, firstly, that of 23rd May 1933, by Panckridge, J., directing a meeting of the depositors of the company for the purpose of considering the scheme, and on a subsequent date the meeting was held. The petitioners had notice of the meeting but did not attend as they had already obtained decrees. The scheme of arrangement between the depositors and the company provided, broadly speaking, that depositors should not be entitled to demand payment of their deposits but would be paid over a period extending to 15 years. The scheme was duly adopted but with a very important modification which provided as follows:
Those who have instituted suits and obtained decrees in respect of his or her deposits including costs, if any, shall also be deemed as creditors and the scheme shall be binding on them as well.
3. The object of this modification was transparently clear, to include among depositors the petitioners who had already obtained decrees. Sanction of this Court was in due course given to the scheme with that modification, but there is nothing to show that the attention of the learned Judge who gave the sanction was ever drawn to this modification or to its effect, nor does it appear that the petitioners had any opportunity of appearing on that application. Application is now made to have the words which were added to Clause 2 of the scheme expunged. The effect of the order sought would be to maintain the sanction given by the order of 17th July 1933 to the scheme but without such modification.
4. It is contended on behalf of the company that the agreement was binding upon the petitioners inspite of the fact that they had obtained decree, and in support of this contention I have been referred to Raghubar Dayal v. Bank of Upper India Ltd. Lucknow 1919 PC 9. Their Lordships of the Privy Council in that case laid down a rule which has no applicability whatever to the circumstances of this case. It was there decided that a depositor who had obtained a decree between the time when the agreement to a scheme was arrived at general meeting' and the time when the Court gave its sanction to the scheme was bound by the scheme on the ground that the agreement became binding from the date when it was arrived at subject to the subsequent sanction of the Court. Here the position is entirely different. The decree had been obtained long before there was any question of a scheme or the meeting or the sanction of the Court being obtained to the scheme, and the authority cited is of no assistance to the company in support of the contention that the applicants are bound by the agreement to the scheme at the meeting on 2nd July 1933.
5. A further point is taken whether I have jurisdiction to entertain this application and make the order. It is suggested that the proper course to be followed is for the decree-holder to execute their decrees, which I am told would be at Rungpur, when they could contend before the local Court that they were not bound by the scheme. Not only would it be embarrassing to throw the burden of deciding the point upon the local subordinate Court but I see no reason for justice being done in this matter by an extremely roundabout method. At the time when the notice of the scheme of the proposed meeting was given the petitioners had ceased to be depositors. They were fully justified in not attending the meeting. The meeting, I conceive, though sanctioned by the Court, had no right by a mere definition to include the petitioners within the scope of depositors, any more than a company would have the right by definition to include its general trade creditors, and in my opinion the petitioners are not bound by the scheme. The scheme having been sanctioned by the Court doubtless per in curiam or because the circumstances were not sufficiently explained to the learned Judge, the applicants' only remedy in my judgment is to come to this Court to have the scheme modified
6. There will be an order in the alternative form set out in the summons, expunging from the scheme the words:
those who have instituted suits and obtained decrees in respect of his or her deposits including costs if any shall also be deemed as creditors and the scheme shall be binding on them as well.
7. Costs of this application will be paid by the company. Certified for counsel.