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Issues: Whether, in sanctioning a scheme of arrangement under Section 153 of the Companies Act, the Court could impose a condition or modification not contemplated by the scheme and not assented to by the parties.
Analysis: The scheme presented for sanction did not contain any provision authorising the Court to impose modifications, nor was there any person before the Court empowered to assent on behalf of the company or the creditors to a variation of the scheme. The settled principle applied was that the Court may sanction a scheme as presented, or refuse sanction if it is fundamentally unsatisfactory, but it cannot of its own motion substitute a materially altered scheme or impose conditions operating as a modification unless the scheme itself or an authorised representative permits such assent. The modification added by the order therefore went beyond the Court's power in the absence of consent.
Conclusion: The condition and modification attached to the sanction were impermissible, and the order sanctioning the scheme in that modified form was set aside in favour of the appellant.
Ratio Decidendi: A Court sanctioning a scheme of arrangement cannot impose a modification or condition that alters the scheme unless the scheme itself, or a duly authorised person, empowers acceptance of such alteration.
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