Sanctioned scheme modification barred absent fresh class consideration; delay and alternate remedies justified refusal of relief.

A sanctioned scheme under section 153 of the Companies Act could not be modified by the Court after approval unless the altered proposal was again considered by the affected class; the proper course was appeal against the sanction order or execution proceedings on the decree. The discussion also notes the competing view on whether a depositor who becomes a decree-holder remains within the depositor class, but that point was not finally resolved in the petitioner's favour. Relief was also refused because the petition was brought after substantial delay.

---

---

Issues: (i) Whether a depositor who has obtained a decree against the company ceases to be a depositor and falls outside the class bound by a scheme under section 153 of the Companies Act; (ii) Whether the Court can, after sanctioning a scheme, modify it by expunging the words treating prior decree-holders as depositors, or otherwise grant relief to the petitioner in view of delay and available remedies.

Issue (i): Whether a depositor who has obtained a decree against the company ceases to be a depositor and falls outside the class bound by a scheme under section 153 of the Companies Act.

Analysis: The judgment refers to conflicting decisions on whether a depositor who later becomes a decree-holder remains within the relevant class. The reasoning accepts that the better view treats a decree-holder as belonging to a different class in some circumstances, but the Court notes that it is bound by the appellate decision then prevailing. The discussion also proceeds on the basis that the legal character of the claim changes once the debt is merged in the decree.

Conclusion: The issue was not finally resolved in the petitioner's favour in this proceeding, and the Court did not grant relief on this basis.

Issue (ii): Whether the Court can, after sanctioning a scheme, modify it by expunging the words treating prior decree-holders as depositors, or otherwise grant relief to the petitioner in view of delay and available remedies.

Analysis: The Court held that its power under section 153 is limited to sanctioning or refusing to sanction the scheme and does not extend to modifying it without a fresh opportunity to the company and the creditors or members to consider the altered proposal. The Court also held that the proper course was an appeal against the sanctioning order, and that if the petitioner's contention were correct, the question of his right to execute the decree should be decided in execution proceedings. Independently, the petition was brought after nearly three years, which the Court treated as a discretionary bar to relief.

Conclusion: The Court refused to modify the scheme and dismissed the petition.

Final Conclusion: The sanctioned scheme remained undisturbed, and the petitioner obtained no relief from the Court in these proceedings.

Ratio Decidendi: Under section 153 of the Companies Act, the Court cannot modify a sanctioned scheme without a fresh consideration by the affected class, and discretionary relief may be refused where the proper remedy lies by appeal or execution and the application is unduly delayed.

---