House Of Labourers Ltd. v. Camilla Banking Corporation Ltd.

1. This is an appeal by defendants 1 and 2 against the order of the Subordinate Judge, 2nd Court, Tippera, dated 27th July 1936, whereby the learned Judge has refused the appellants' application under O. 23, R. 3 of the CPC, for recording the adjustment of the suit and for dismissing the suit against them in accordance with the terms of a scheme of reconstruction sanctioned under Section 153 of the Companies Act. O. 23, R. 3 of the CPC, is in these terms:

Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise or where the defendant satisfies the plaintiff in respect of the whole or any part; of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass decree in accordance therewith so far as it relates to the suit.

2. This rule contemplates an adjustment by a lawful agreement or compromise that is an adjustment by act of parties and not an adjustment which has a statutory operation. The effect of the words in Section 153, Clause (2) of the Companies Act, is to give the scheme of arrangement when sanctioned by the Court a statutory operation. Such a soheme of arrangement cannot therefore be said to be an adjustment by a lawful agreement or compromise within the meaning of O. 23, R. 3, and cannot be ordered to be recorded under that rule.

3. In this view of the matter it is not necessary to express any opinion on the question whether in view of the scheme of arrangement sanctioned by the Court under Section 153 of the Companies Act, the plaintiff is entitled to get any relief against defendants 1, 2 and 3 in the suit. The appeal is accordingly dismissed with costs hearing fee being assessed at two gold mohurs. Let the record in this case be sent down as early as possible.

V.B.B/A.L

4. Appeal dismissed.