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Issues:
1. Validity of the scheme of arrangement approved by the depositors' meeting. 2. Rights of a depositor who becomes a decree-holder. 3. Court's power to modify a sanctioned scheme under section 153 of the Companies Act. 4. Applicability of previous court decisions on similar matters. Analysis: 1. The judgment concerns a petitioner who was a depositor in a bank and had obtained a decree for the repayment of his deposit. A scheme of arrangement was proposed by the bank, which included a provision restricting depositors from withdrawing their funds for 12 years. The petitioner did not attend the depositors' meeting where the scheme was approved. The Court, under section 153 of the Companies Act, sanctioned the scheme, making it binding on the depositors. The petitioner sought to challenge the scheme on the grounds of not being a depositor anymore due to the decree and requested modifications or cancellation of the scheme. The Court noted the delay in bringing the petition and refused to grant relief solely based on that reason. 2. The judgment referred to previous decisions where it was held that a depositor who becomes a decree-holder before a scheme is proposed ceases to be a depositor and is not bound by the scheme approved by depositors. The Court highlighted that decree-holders have different rights compared to depositors, and a meeting of depositors cannot pass a scheme affecting decree-holders. The Court emphasized the distinction between depositors and decree-holders, stating that decree-holders should be treated as a separate class under section 153 of the Companies Act. 3. The Court discussed the limitations of its power under section 153 to modify or alter a sanctioned scheme without the consent of the company and its creditors or members. It pointed out that any modifications to a scheme should be agreed upon by the concerned parties. The judgment criticized the approach taken in previous cases where schemes were modified without proper consent, highlighting the importance of following due process and providing parties with an opportunity to consider and agree to modifications. 4. The judgment also addressed conflicting decisions within the court regarding the classification of decree-holders in the context of schemes of arrangement. While the Court acknowledged the precedent set by previous decisions, it expressed agreement with the view that decree-holders should be treated as a distinct class from depositors. The judgment emphasized the importance of upholding the rights of decree-holders and ensuring that their interests are not overlooked in the approval of schemes by depositors' meetings. In conclusion, the judgment dismissed the petitioner's application, citing reasons such as delay, procedural limitations, and the availability of alternative remedies. It underscored the need for proper consideration of decree-holders' rights in the context of schemes of arrangement and highlighted the importance of following due process in modifying sanctioned schemes.
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