Post-sanction company court jurisdiction ends absent express statutory power; scheme clauses and CPC cannot create enforcement powers.

Section 153 of the Companies Act, 1913 empowers the court to convene meetings and sanction or refuse a compromise or arrangement, but post-sanction powers to make ancillary, incidental, or consequential orders are expressly provided only for reconstruction or amalgamation schemes under section 153A. Where a scheme is sanctioned outside winding up and does not fall within those provisions, the company court becomes functus officio and cannot later enforce, modify, or adjudicate claims arising under the scheme. Jurisdiction cannot be created by clauses in the scheme, by section 141 of the Code of Civil Procedure, 1908, or by inherent powers. Parties must pursue their rights in ordinary legal proceedings.

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Issues: (i) Whether a company court, after sanctioning a scheme of arrangement under section 153 of the Companies Act, 1913, retains jurisdiction to entertain applications for enforcement, modification, or adjudication of rights arising under the scheme when the scheme is not one under section 153A or section 153B; (ii) Whether such jurisdiction can be created by clauses in the scheme itself or derived from the Code of Civil Procedure, 1908, or any inherent power of the court.

Issue (i): Whether a company court, after sanctioning a scheme of arrangement under section 153 of the Companies Act, 1913, retains jurisdiction to entertain applications for enforcement, modification, or adjudication of rights arising under the scheme when the scheme is not one under section 153A or section 153B.

Analysis: Section 153 authorises the court to convene meetings and to sanction or refuse a compromise or arrangement. The powers to make ancillary, incidental, or consequential orders after sanction are specifically conferred only in section 153A for schemes of reconstruction or amalgamation. The scheme under consideration was not of that kind. The court held that once such a scheme is sanctioned otherwise than in winding up, the company court becomes functus officio in relation to that scheme and has no further seisin to enforce it, modify it, or adjudicate upon claims arising under or out of it. Questions of individual rights must be pursued in regular proceedings permissible in law.

Conclusion: The court had no jurisdiction after sanction of a scheme not falling under section 153A or section 153B.

Issue (ii): Whether such jurisdiction can be created by clauses in the scheme itself or derived from the Code of Civil Procedure, 1908, or any inherent power of the court.

Analysis: Parties cannot confer subject-matter jurisdiction by consent or by drafting clauses in a scheme, and the court cannot assume powers not granted by the statute. Section 141 of the Code of Civil Procedure, 1908, was held to concern procedure only and not to confer substantive powers or special jurisdictions such as those under Order 14 Rule 6 or Order 36. The court also rejected reliance on inherent jurisdiction, holding that inherent power cannot override the express limits of the Companies Act and cannot be used to enforce a sanctioned scheme by summary orders where the statute does not so provide.

Conclusion: Jurisdiction could not be created by scheme clauses, the Code of Civil Procedure, 1908, or inherent powers.

Final Conclusion: A scheme sanctioned outside winding up and outside the reconstruction or amalgamation provisions does not keep the company court seised of later disputes under the scheme, and the parties must work out their rights in ordinary legal proceedings.

Ratio Decidendi: The company court's post-sanction powers exist only where the Companies Act expressly preserves them, and jurisdiction over a sanctioned scheme cannot be enlarged by consent, by scheme terms, or by procedural provisions that do not themselves confer substantive power.

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