Scheme of arrangement binding on decree-holder creditors where amended wording was treated as merely clarifying existing law.

Decree-holders who remained unsecured creditors were treated as part of the same class for a scheme of arrangement under Section 153 of the Companies Act, so no separate meeting was required for them. The court held that the 1936 amendment was merely explanatory of the earlier provision and therefore declaratory of the existing law, not a new rule. On that basis, the scheme validly bound the decree-holders, and the objection to execution was correctly upheld.

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Issues: Whether decree-holders who were originally depositors constituted a separate class of unsecured creditors requiring a separate meeting before a scheme under Section 153 of the Companies Act could bind them, and whether the amended provision of 1936 was retrospective in effect.

Analysis: The scheme was sanctioned under Section 153 of the Companies Act, and the Court accepted that the expression "creditors of the same class" in the unamended provision covered unsecured creditors who had already obtained decrees. The later amendment of 1936 was treated as explanatory of the earlier provision, because it clarified the intended meaning of the existing language rather than introducing a new rule. On that basis, decree-holders were not treated as a separate class needing a distinct meeting, and the scheme remained binding on them.

Conclusion: Decree-holders were bound by the scheme and no separate meeting of such creditors was necessary; the objection to execution was rightly upheld.

Final Conclusion: The appeal failed, and the order dismissing the execution application stood affirmed.

Ratio Decidendi: An amendment that merely clarifies the meaning of an existing statutory expression operates as declaratory of the earlier law, and unsecured creditors who have obtained decrees remain within the same class as other unsecured creditors for the purpose of a scheme of arrangement.

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