Unsecured creditor's caveatable interest cannot by itself upset convening directions for a company scheme when rights remain undecided.

In proceedings for convening meetings under section 391 of the Companies Act, 1956 read with rule 67 of the Companies (Court) Rules, 1959, an unsecured creditor could not seek recall of the convening directions merely by asserting a caveatable interest. The court noted that the statutory conditions for convening the meetings had been satisfied, the creditor's objections could be raised in the scheme-confirmation stage, and the convening order did not finally determine rights or cause prejudice. The challenge therefore failed and the order convening the meetings remained undisturbed.

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Issues: Whether the order refusing recall of directions convening meetings under section 391 of the Companies Act, 1956 was liable to be interfered with on the ground that the appellant, as an unsecured creditor, had a caveatable interest and a right to object at the stage of convening the meetings.

Analysis: The convening order was passed in proceedings under section 391(1) of the Companies Act, 1956 read with rule 67 of the Companies (Court) Rules, 1959 after the statutory conditions were found satisfied. The appellant's objections were considered in the proceedings relating to confirmation of the scheme of demerger, and the impugned order did not affect any vested right or cause prejudice at that stage. The court also accepted that an unsecured creditor could not claim interference merely because the meeting directions had been issued and the scheme proceedings were still pending.

Conclusion: The appellant had no ground to recall the order convening the meetings, and the challenge failed.

Final Conclusion: The special appeal did not succeed and the order under challenge was left undisturbed.

Ratio Decidendi: In proceedings for convening meetings under section 391 of the Companies Act, 1956, an unsecured creditor cannot obtain interference merely on the basis of a claimed caveatable interest where the order does not finally determine rights or cause prejudice.

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