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House of Labourers Ltd. and anr. Vs. Comilla Banking Corporation Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1937Cal381,173Ind.Cas.431
AppellantHouse of Labourers Ltd. and anr.
RespondentComilla Banking Corporation Ltd. and ors.
Excerpt:
- .....is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement or compromise or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the court shall order such agreement, compromise or satisfaction to be recorded, and shall pass decree in accordance therewith so far as it relates to the suit.2. this rule contemplates an adjustment by a lawful agreement or compromise that is an adjustment by act of parties and not an adjustment which has a statutory operation. the effect of the words in section 153, clause (2), companies act, is to give the scheme of arrangement when sanctioned by the court a statutory operation. such a scheme of arrangement cannot therefore be said to be an.....
Judgment:

1. This is an appeal by defendants 1 and 2 against the order of the Subordinate Judge, 2nd Court, Tippera, dated 27th July 1936, whereby the learned Judge has refused the appellants' application under Order 23, Rule 3, Civil P. C, for recording the adjustment of the suit and for dismissing the suit against them in accordance with the terms of a scheme of reconstruction sanctioned under Section 153, Companies Act. Order 23, Rule 3, Civil P.C., is in these terms:

Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass decree in accordance therewith so far as it relates to the suit.

2. This rule contemplates an adjustment by a lawful agreement or compromise that is an adjustment by act of parties and not an adjustment which has a statutory operation. The effect of the words in Section 153, Clause (2), Companies Act, is to give the scheme of arrangement when sanctioned by the Court a statutory operation. Such a scheme of arrangement cannot therefore be said to be an adjustment by a lawful agreement or compromise within the meaning of Order 23, Rule 3, and cannot be ordered to be recorded under that rule. In this view of the matter it is not necessary to express any opinion on the question whether in view of the scheme of arrangement sanctioned by the Court under Section 153, Companies Act, the plaintiff is entitled to get any relief against defendants 1, 2 and 3 in the suit. The appeal is accordingly dismissed with costs hearing fee being assessed at two gold mohurs. Let the record in this case be sent down as early as possible.


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