Sanctioned scheme of arrangement cannot be recalled unilaterally; post-sanction changes must follow statutory modification procedures.

A sanctioned scheme of arrangement could not be recalled on a unilateral application by one party alone, because post-sanction interference with a consent-based arrangement must proceed through the Companies Act's statutory supervision and modification mechanism. The court also held that the asserted mining-law objection did not justify recall, since the scheme transferred only a pending application for a mining lease, not an existing lease requiring prior approval. Once the scheme had been sanctioned and acted upon, recall was not the proper remedy; any substantial change had to be sought through the statutory modification process.

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Issues: (i) Whether an application by one party alone was maintainable for recalling a sanctioned scheme of arrangement; (ii) Whether the alleged violation of mining law justified recall of the sanctioned scheme, or whether the only permissible course was modification under the Companies Act.

Issue (i): Whether an application by one party alone was maintainable for recalling a sanctioned scheme of arrangement.

Analysis: The scheme had been sanctioned on the basis of a joint arrangement between the transferor and transferee companies and had already been acted upon by the parties and the authorities. A unilateral application by only one party to undo a concluded arrangement was inconsistent with the nature of a consent-based order. The proper statutory route for post-sanction intervention lay within the scheme of supervision and modification under the Companies Act, not by a recall application filed by one side alone.

Conclusion: The application for recall was not maintainable at the instance of only the transferor company.

Issue (ii): Whether the alleged violation of mining law justified recall of the sanctioned scheme, or whether the only permissible course was modification under the Companies Act.

Analysis: The challenge was founded on the assertion that the scheme offended the mining law requirement of prior governmental approval for transfer of a mining lease. The court held that what was transferred under the scheme was only the pending application for the mining lease, not an existing mining lease, and therefore the approval requirement for transfer of a lease was not attracted. The scheme had also been implemented and acted upon by the concerned parties and authorities. Even otherwise, once sanctioned, a scheme could not be recalled merely because it was alleged to be unworkable; any substantial alteration had to be pursued through the mechanism under section 392 of the Companies Act.

Conclusion: The alleged mining-law infraction did not justify recall of the sanctioned scheme.

Final Conclusion: The challenge to the order refusing recall failed, and the sanctioned arrangement was left undisturbed.

Ratio Decidendi: A sanctioned scheme of arrangement cannot be recalled on a unilateral application by one party, and post-sanction relief affecting the scheme must proceed, if at all, through the statutory modification machinery; an alleged breach is not enough where the transaction falls outside the specific prohibition invoked.

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