Right to appeal in liquidation: third parties lacking a present interest cannot appeal refusal to sanction a proposed scheme.

Whether a third party who propounds a scheme in company liquidation has appeal rights against refusal to sanction it: the article states that only the liquidator, creditors and contributories are principally concerned and bound by a scheme, and that a third party with only a prospective or contingent interest lacks a present interest in the liquidation subject matter. Consequently, absence of a present legal interest means no appellate locus standi even if made a party in lower proceedings; the practical effect is that such third parties do not have a right to appeal against refusal to sanction a scheme.

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Issues: Whether a person who is neither a liquidator, nor a creditor, nor a contributory but who has propounded a scheme in the liquidation proceedings has a right to appeal against the refusal by the Court to sanction the scheme.

Analysis: The proceedings concerned the liquidation of a company and the question of sanctioning a compromise or arrangement under Section 153 of the Indian Companies Act; Section 174 permits the Court to have regard to the wishes of creditors and contributories in winding up. Only the liquidator, the contributories and the creditors are the persons principally concerned and bound by a scheme in the course of liquidation. A third party who merely propounds a scheme and has only a prospective, contingent interest if the scheme were sanctioned does not possess a present interest in the subject-matter of the liquidation. Authorities establish that a person without a present title or an interest adversely affected by the decree has no right of appeal; being made a party in the lower court does not itself create an appellate locus standi where no present legal interest exists.

Conclusion: The appellant, not being a liquidator, creditor or contributory and having no present interest adversely affected by the order, has no right to appeal; the appeal is dismissed with costs in favour of the respondents.

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