1935 (3) TMI 11

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.... raised in this summons, which I caused to be adjourned into Court for the benefit of fuller arguments on the part of the Counsel, ought to be dismissed. It is raised in relation to a proposed scheme of reconstruction put forward by shareholders and persons interested in a concern, called the Jalpaiguri Banking and Trading Company. That company I am informed was operating very largely in the te....

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....h Companies Act and it deals both with creditors of the company and also with their depositors. It seems to me that it is much easier to divide the depositors of a company into their separate classes than it is to divide the creditors of a company. It is not very difficult to visualise that a debenture-holder has quite a different outlook from, shall I say, a holder of ordinary shares, but when it....

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....e Melanda Loan Office, In re [1935] 5 Com. Cas. 330 (Cal.) on this very same section. The Lord Justice said in this case:- "The word 'class' is vague, and to find out what is meant by it we must look at the scope of the section which is a section enabling the Court to order a meeting of class creditors to be called. It seems plain that we must give such meaning to the term 'class' as will preve....

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.... persons as opposed to an unsecured creditor who has not got a decree. There is a well known and often quoted phrase which I think was used by Lord Justice James in relation to a reconstruction scheme and it is this : "It is not for the Court to sanction a scheme which allows one class of creditor or depositor to feast upon the rights of another class" and if I thought here that lumping t....