Decree-holders under a company scheme were treated as part of the same unsecured creditor class and bound by the sanction.

A scheme of arrangement for unsecured creditors under section 153 of the Indian Companies Act treated unsecured creditors who had filed suits or obtained decrees as part of the same class as other unsecured creditors. The later amendment was read as a legislative explanation of the phrase "creditors of the same class", not as a new rule. Decree-holders were therefore not a separate class requiring a distinct meeting before sanction, and they were bound by the sanctioned scheme.

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Issues: Whether depositors who had obtained decrees against a banking company before a scheme of arrangement was sanctioned formed a separate class of creditors requiring a separate meeting, and whether such decree-holders were bound by the sanctioned scheme.

Analysis: The scheme under section 153 of the Indian Companies Act was framed for unsecured creditors. The later amendment, which expressly provided that unsecured creditors who had filed suits or obtained decrees would be deemed to be of the same class as other unsecured creditors, was treated as a legislative explanation of the earlier expression "creditors of the same class" rather than as a new rule altering the law. On that footing, decree-holders were not a distinct class for the purpose of the scheme and no separate meeting of them was necessary before sanction.

Conclusion: The decree-holders were bound by the scheme and could not execute the decree otherwise than in accordance with it.

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