Court-sanctioned scheme of arrangement binds land allotting authority to execute sale deed after dues are paid.

A court-sanctioned scheme of arrangement was held binding on the Karnataka Industrial Area Development Board, which had been a party to the proceedings and raised no objection when approval was sought. The scheme required the applicant-company or its promoters to pay the Board's dues, after which the Board had to execute and register the sale deed for the allotted land. The Board could not resist implementation on the ground that no lease-cum-sale agreement had been executed, particularly where allotment and possession had continued for decades and no cancellation of allotment was shown. The Court accepted the amount intimated as payable and directed compliance upon deposit of the dues.

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Issues: Whether the Karnataka Industrial Area Development Board was bound to execute and register the sale deed in favour of the applicant-company in terms of the court-approved scheme of arrangement upon payment of the dues claimed by the Board.

Analysis: The scheme of arrangement, sanctioned by the Court, expressly provided that upon the scheme becoming effective the company or its promoters would pay the dues of the KIADB and the KIADB would execute the sale deed in favour of the company in respect of the allotted land. The Board had been a party to the earlier proceedings and had not raised any objection when the scheme was placed for approval. Once the scheme was sanctioned, its terms were required to be implemented as approved, and the Board could not resist execution of the sale deed on the ground that a lease-cum-sale agreement had not been executed, especially when the allotment and possession had continued for decades and no cancellation of allotment was shown. The Court also accepted the amount intimated by the KIADB as payable.

Conclusion: The issue was decided in favour of the applicant-company. The KIADB was directed to receive the stated amount and execute and register the sale deed in respect of the application schedule property upon deposit of the dues.

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