Section 392 powers are limited to supervising and modifying a sanctioned scheme, not undoing it or granting inconsistent creditor relief.

Section 392 of the Companies Act, 1956 limits the court to supervising a sanctioned compromise or arrangement, issuing directions, and making modifications needed for its proper working. It cannot be used to set aside the scheme, exclude a creditor from its operation, or grant relief that effectively negates the scheme unless the court is satisfied that the arrangement cannot be worked satisfactorily. A disputed claim for additional and penal interest, without adequate particulars, did not show that the scheme had become unworkable. An application seeking reliefs beyond section 392 was therefore not maintainable, and the creditor was left to pursue any enforceable dues in appropriate proceedings.

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Issues: Whether an application under section 392 of the Companies Act, 1956 could be used to set aside a sanctioned scheme of arrangement, exclude a creditor from the scheme, or grant leave to enforce rights under the underlying hire-purchase agreement, and whether such an application was maintainable when the sanctioned scheme had not been shown to be unworkable.

Analysis: After sanction of a compromise or arrangement under section 391, the court's power under section 392 is confined to supervision of the working of the scheme, giving directions, and making modifications necessary for its proper working. That power is preserved to carry the scheme into effect, not to negate it or to set it aside at the instance of a single creditor. An order for winding up under section 392(2) can be made only where the court is satisfied that the scheme cannot be worked satisfactorily with or without modification. The creditor's claim for additional and penal interest was seriously disputed, lacked sufficient particulars, and did not establish that the scheme as a whole had become unworkable. The prayers made in the application sought reliefs beyond the scope of section 392.

Conclusion: The application was not maintainable and was misconceived. The order directing payment of Rs. 10,000 with a default clause could not be sustained.

Final Conclusion: The appellate court set aside the impugned order, dismissed the application before the court below, and left the creditor at liberty to pursue appropriate proceedings in law for any enforceable dues.

Ratio Decidendi: The powers of the court under section 392 of the Companies Act, 1956 are limited to supervising, directing, and modifying a sanctioned scheme for its proper working, and cannot be invoked to set aside the scheme or grant reliefs that amount to its negation unless the court is satisfied that the scheme cannot be satisfactorily worked out.

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