Scheme of arrangement did not bar execution by an earlier decree-holder where the decree predated sanction.

A decree-holder who had already obtained and executed a decree before a scheme of arrangement was adopted and sanctioned could not be restrained from further execution on the basis of that scheme. The objection under section 47 of the Code of Civil Procedure, 1908 failed because the sanctioned scheme, intended to distribute available funds among depositors and creditors pro rata, did not on its terms extend to a depositor with an earlier decree. The court held that the scheme did not bar execution by such decree-holder.

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Issues: Whether a decree-holder who had obtained and executed a decree before the scheme of arrangement was adopted and sanctioned could be restrained from executing the decree on the basis of that scheme.

Analysis: The objection under section 47 of the Code of Civil Procedure, 1908 turned on the proper construction of the scheme sanctioned under section 153 of the Companies Act, 1913. The scheme was framed for distribution of available funds among depositors and creditors on a pro rata basis. On its terms and on the materials on record, it did not extend to a depositor who had already obtained a decree before the scheme was adopted at the meeting of depositors and sanctioned by the Court.

Conclusion: The scheme did not bar the decree-holder from proceeding with execution, and the objection failed.

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