Court lacks jurisdiction under Section 392 for third-party claims but allows enforcement of company rights. Ad interim relief granted.

The court concluded it lacked jurisdiction under Section 392 to adjudicate disputed claims against third parties. However, it authorized the court committee to enforce the company's rights under the agreement, directing legal actions for specific performance, damages, or return of earnest money. An ad interim relief maintaining the status quo on the Borivli land transfer was granted until May 15, 1982.

---

---

Issues Involved:

1. Jurisdiction of the court under Section 392 of the Companies Act, 1956.
2. Authority to issue directions equivalent to a decree for specific performance and/or damages.
3. Competency of the application for amendment of directions in Company Application No. 188 of 1979 and related applications.
4. Appropriate directions to be issued if the application is competent.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Court under Section 392 of the Companies Act, 1956:

The court examined whether it has the power or authority under Section 392 of the Companies Act, 1956, to adjudicate upon the rights and interests claimed by a company against third parties. Section 392 empowers the High Courts to enforce compromises and arrangements sanctioned in respect of a company under Section 391. This power is supervisory, ensuring that the object of the compromise or arrangement is not frustrated by any party. The court can issue directions or make modifications for the proper working of the compromise or arrangement. However, the court concluded that this supervisory power does not extend to adjudicating disputed rights or claims of the company against third parties who are not parties to the scheme of compromise or arrangement. The court emphasized that such rights or claims must be enforced through ordinary legal channels, not through the supervisory jurisdiction under Section 392.

2. Authority to Issue Directions Equivalent to a Decree for Specific Performance and/or Damages:

Given the conclusion on the first issue, the court found that it does not have the jurisdiction to issue directions in the nature of a decree for specific performance and/or damages. The power under Section 392 is limited to ensuring the proper working of the compromise or arrangement and does not extend to adjudicating disputed claims against third parties. The court highlighted that if the legislature intended to grant such powers, it would have explicitly provided for them, similar to the provisions under Section 446(2) of the Companies Act, which grants wide jurisdiction to the winding-up court.

3. Competency of the Application for Amendment of Directions:

The court acknowledged that the company is entitled to seek appropriate directions regarding the rights it claims under the agreement to sell the Borivli land. Although the appropriate directions were not initially sought in Company Application No. 188 of 1979 and related applications, the court had previously directed the learned advocate for the court committee to seek such directions. Therefore, the court found the application for amendment competent, as it was in pursuance of the court's earlier order.

4. Appropriate Directions to be Issued:

In light of the competency of the application, the court directed and authorized the court committee to take appropriate measures and actions for enforcing the company's rights under the agreement dated April 29, 1975. This includes seeking legal measures for specific performance, damages, or return of the earnest money, and potentially joining as a party in the civil suit filed by respondents Nos. 2 to 5 against respondent No. 1 in the High Court of Judicature at Bombay.

Conclusion:

The court concluded that it does not have the jurisdiction under Section 392 to adjudicate disputed claims against third parties but authorized the court committee to take appropriate legal actions to enforce the company's rights under the agreement. The summons was disposed of accordingly, and an ad interim relief of maintaining the status quo regarding the transfer of the Borivli land was granted until May 15, 1982, to protect the company's interests. No order as to costs was made.

---