MAHIGANJ LOAN OFFICE LTD Vs. BEHARI LAL CHAKI

JUDGEMENT

(1.) The respondent was a depositor in the appellant banking company. He gave notice for the withdrawal of his deposit and the deposit became repayable in August 1932. The appellant did not repay the money. On 21 May 1933 a resolution was passed by the company for embarking upon a scheme. The respondent filed a suit for the recovery of his deposit the next day. On 30 May 1933 the appellant filed an application in "the original side of this Court under S 153, Companies Act for calling a meeting of the depositors including those who have filed suits and obtained decrees against the company. This application was granted. The respondent's suit for the recovery of his deposit was decreed on compromise on 5 June 1933. On 2 July, 1933 the meeting of the depositors was held and their majority in number representing three-fourths in value agreed to a scheme which was inconsistent with the terms of compromise on the basis of which the company allowed a consent decree to be passed against it in favour of the respondent. The respondent received one instalment of the decretal amount from the appellant in November 1933. The Court ultimately sanctioned the scheme on 27 November 1933. The company there. after did not pay the balance of the decretal amount. The decree-holder thereupon put the consent decree into execution on 19 June 1935. The company objected to the execution of the decree on the ground that the decree had become incapable of execution by reason of the scheme sanctioned by this Court. The Subordinate Judge of Rangpur who heard this objection held that so long as the scheme stood, the consent decree could not be executed. He accordingly allowed the appellant's objection. On appeal by the decree-holder to the District Judge of Rangpur the learned District Judge held that the scheme was not binding on the decree-holder, inasmuch as the intention of the company was to arrange matters with those depositors who had not obtained decrees and not to make the scheme binding on those who had already obtained decrees. In this view of the matter the learned District Judge allowed the appeal and set aside the order of the learned Subordinate Judge. Hence this appeal by the judgment-debtor appellant company.

(2.) The point for determination in this appeal is whether the learned District Judge was right in holding that the scheme was not binding on the respondent decree-holder. The learned advocate appearing for the respondent decree-holder contends that the objection of the judgment-debtor that the scheme is a bar to the execution of the decree cannot be entertained in this execution proceeding. In this case the scheme was sanctioned by the Court after the decree and the objection of the judgment-debtor is that by reason of the sanction of the Court the scheme has now superseded the decree with the result that the decree has now become incapable of execution. The objection raised therefore relates to the execution or discharge of the decree and consequently comes within Section 47, Civil P.C. The learned advocate also contends that the scheme is only an adjustment as contemplated by Order 21, Rule 2 of the Code and as it has not been certified or recorded as required by that Rule, the executing Court cannot recognize this scheme. Order 21. Rule 2 contemplates an adjustment to the satisfaction of the decree-holder. The scheme which is agreed upon by the majority of creditors and is made binding on the minority in spite of their opposition by the order of the Court cannot be said to be an adjustment to the satisfaction of the creditors who oppose it. The Rule contemplates an adjustment which is binding between the decree-holder and the judgment-debtor as an agreement by reason of their consent to it. It does not contemplate an adjustment which, although not consented to, is made binding by operation of law. The contention of the respondent, that the objection of the company cannot be entertained in this execution proceeding, is therefore overruled.

(3.) We now come to the merits of the objection. It cannot be disputed that the scheme, as it now stands by its terms, binds the respondent decree-holder, as the scheme definitely includes the depositors who had filed suits or obtained decrees. There is no ambiguity in the language of the scheme. The petition of the company under Section 153 for an order for calling a meeting, the order of the Court calling the meeting, the report of the Chairman and the report of the Manager of the company which were placed before us by the learned advocate for the respondent, make the position abundantly clear that the depositors who had already filed suits or obtained decrees were intended to be bound by the scheme. The execution Court cannot modify, alter or amend the scheme which has been sanctioned under Section 153. If there are circumstances to justify modification or alteration or amendment of the scheme by excluding the depositors who had filed suits or obtained decrees, the remedy is to go to the Court which sanctioned the scheme. The learned advocate for the respondent however contends that if the order of the Court sanctioning the scheme, so far as it relates to the depositors who had filed suits and obtained decrees, be without jurisdiction, it is not binding on the executing Court and the executing Court can ignore it as if it had no existence. By jurisdiction is meant the authority which a Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision: see Halsbury's Laws of England, Edn. 2, Vol. 8, p. 581.