Sanctioned scheme enforcement under company law can override later co-operative objections when vesting and transfer are already provided.

Section 392 of the Companies Act, 1956 was treated as conferring continuing supervisory power on the company court to clarify and secure effective implementation of a sanctioned scheme. The Limitation Act applied, but the claim was not governed by articles 65 or 136, and article 137 was satisfied because the application was brought within three years of the order giving rise to the need for clarification. Resort to co-operative society remedies did not bar relief under section 392, since the application sought directions under the scheme rather than appellate review of co-operative authorities. The sanctioned scheme itself provided for vesting and transfer of the subject flat and basement, so membership transfer could not be defeated by later expert directions or pending co-operative disputes, subject to compliance with co-operative law.

---

---

Issues: (i) Whether the application under section 392 of the Companies Act, 1956 was barred by limitation. (ii) Whether the applicants were precluded from seeking relief under section 392 because they had pursued remedies before the authorities under the Maharashtra Co-operative Societies Act. (iii) Whether the sanctioned scheme entitled the applicant company to transfer and recognition of membership in respect of the subject flat and basement, despite objections based on expert directions and pending co-operative disputes.

Issue (i): Whether the application under section 392 of the Companies Act, 1956 was barred by limitation.

Analysis: The relief sought was not treated as a mere execution of the 1986 order, but as a request for clarification and directions necessary for effective working of the sanctioned compromise or arrangement. The Court held that the Limitation Act applies to proceedings under section 392, but article 65 had no application to the relief claimed. Article 136 also did not govern the matter because the application was not one for enforcement of a decree or order as such. Although article 137 applied to proceedings of this nature, the respondents had not laid any foundation as to when the right to apply accrued. The application was filed within three years of the revisional order that triggered the need for clarification.

Conclusion: The objection of limitation was rejected and the application was held to be within time.

Issue (ii): Whether the applicants were precluded from seeking relief under section 392 because they had pursued remedies before the authorities under the Maharashtra Co-operative Societies Act.

Analysis: The Court held that section 392 confers wide power and continuing supervision over implementation of a sanctioned scheme, including the power to give directions needed for its proper working. The revisional authority had itself expressed doubt about the effect of the company court proceedings and the sanctioned scheme, and the present application was sought to remove that doubt. In that situation, pursuit of proceedings under the co-operative law did not bar resort to section 392. The Court also clarified that it was not sitting in appeal over the co-operative authorities or pronouncing on compliance with the co-operative statute.

Conclusion: The objection based on election of remedy was rejected.

Issue (iii): Whether the sanctioned scheme entitled the applicant company to transfer and recognition of membership in respect of the subject flat and basement, despite objections based on expert directions and pending co-operative disputes.

Analysis: The sanctioned scheme expressly provided for transfer and vesting of the entire Kanjur Division undertaking, including ownership flats and buildings, in the transferee company with effect from 1 January 1983 under section 394(2) of the Companies Act, 1956. The Court held that the subject flat and basement had already vested in the applicant company by virtue of the scheme, and therefore no further reference to the two experts was necessary for transfer of membership. Prior directions attributed to the experts could not override the sanctioned scheme for the present purpose. Pending disputes before the co-operative forum and questions under the co-operative law were not sufficient to deny effect to the scheme.

Conclusion: The applicant company was held entitled to transfer and recognition of membership in respect of the subject property, subject to compliance with the Maharashtra Co-operative Societies Act and the Rules.

Final Conclusion: The application succeeded on the substantive reliefs pressed, and the sanctioned scheme was directed to be given effect for the subject flat and basement, while leaving co-operative law compliances to be fulfilled.

Ratio Decidendi: The company court retains continuing supervisory power under section 392 to remove impediments and clarify a sanctioned scheme, and where the scheme itself provides for automatic vesting of property, that vesting cannot be defeated by later co-operative objections or by treating the application as a mere execution proceeding.

---