Sanctioned scheme supervision and relief undertaking moratorium barred enforcement of the creditor's claim

Section 392(2) of the Companies Act, 1956 is limited to implementation, supervision and removal of difficulties in relation to a scheme already sanctioned under section 391, so it cannot be used to grant relief for an unapproved third scheme. The court therefore declined relief on that ground. A contractual claim for supply of goods also remained suspended during the currency of a relief undertaking notification under the West Bengal Relief Undertakings (Special Provisions) Act, 1972, because the statute operates as a moratorium suspending remedies and proceedings. The application was accordingly not maintainable while the notification continued in force.

---

---

Issues: (i) Whether the court could invoke section 392(2) of the Companies Act, 1956 to grant the relief sought in respect of a matter outside a sanctioned scheme, and (ii) whether the creditor's claim was enforceable during the currency of the notification declaring the company a relief undertaking under the West Bengal Relief Undertakings (Special Provisions) Act, 1972.

Issue (i): Whether the court could invoke section 392(2) of the Companies Act, 1956 to grant the relief sought in respect of a matter outside a sanctioned scheme.

Analysis: The power to modify or direct matters under section 392 is confined to implementation of, supervision over, and removal of difficulties in relation to a scheme already sanctioned under section 391. It does not extend to matters which never matured into a sanctioned scheme, since such an extension would enlarge the statutory power beyond its purpose and create an endless supervisory process.

Conclusion: The court held that section 392(2) could not be used to grant relief in respect of the proposed third scheme, which had never been sanctioned.

Issue (ii): Whether the creditor's claim was enforceable during the currency of the notification declaring the company a relief undertaking under the West Bengal Relief Undertakings (Special Provisions) Act, 1972.

Analysis: The claim arose out of a contract for supply of goods and therefore fell within the contractual obligations covered by the relief undertaking notification. The Act operates as a moratorium by overriding other laws and by suspending remedies and proceedings during the period the notification remains in force. As a result, the creditor's claim could not be enforced while the company continued as a relief undertaking.

Conclusion: The court held that the claim was suspended and the application was not maintainable during the subsistence of the notification.

Final Conclusion: The application failed because the court's modification power did not extend to the unapproved third scheme and the creditor's remedy remained suspended under the relief undertaking regime.

Ratio Decidendi: Section 392 of the Companies Act, 1956 is confined to modification and enforcement of sanctioned schemes only, and a contractual claim covered by a subsisting relief undertaking notification remains unenforceable for so long as the statutory suspension continues.

---