( 1 ) THIS is an appeal under Section 202 of the Companies Act, 1913.

( 2 ) THE facts which give rise to this appeal, briefly stated are as follows:-In civil Suit No. 14 of 1927 in the Court of Sub-Judge, First Class, chhindwara, Amalgamated Coal-fields Company obtained a decree against M/s. Raisaheb Hiralal Verma and Munshi Kanhaiya Lal Ltd. During proceedings in execution of the decree, the decree-holder applied for appointment of a receiver in respect of Junnardev Colliery No. 2 which belonged to the judgment-debtor. This application was opposed by hasanali-Abdul Ali, creditor of the judgment-debtor company on the ground that there was an existing arrangement between him and the judgment-debtor company which would be adversely affected. Ultimately with the consent of Hasanali, one Abdul Kadar was appointed. He was removed in the year 1929 and in his place one J. D. Flynn was appointed as receiver. Subsequently in an appeal preferred by Hasanali before the court of Judicial Commissioner against an order in the execution case, hasanali was placed in possession of Junnardev Colliery No. 2 on 2-11932. He engaged the C. P. Contracting and Mining Syndicate (hereinafter referred) to as 'the Syndicate' as raising contractor for the colliery,

( 3 ) ALTHOUGH subsequently Hasanali was removed from the possession of the colliery under orders of the Court, the Syndicate continued as raising contractor on behalf of the Court on certain terms. On 9-1-1933 the Syndicate filed an application for being appointed as receiver. By an order dated 23-1--1933 the syndicate was appointed receiver on the condition that the receiver would not incur capital expenditure exceeding Rs. 20/-without the permission of the Court, under the terms of appointment the Syndicate was to get Rs. 1/13/- per ton as cost of raising coal, Annas 0-8-0 per ton as transportation charges and annas 0-20 per ton as their commission for general management. (Vide order dated 23-11933- Page 237 of the Paper Book, Part I ).

( 4 ) ON 28-3-1933, the Syndicate filed an application proposing the scheme known as guaranteed profit scheme (Page 297 of the Paper Book, Part I ). They offered to carry on the work of the colliery entirely at their expenses and deposit in Court from month to month guaranteed profits at the rate specified in the schedule attached to the application and prayed that the entire working of the colliery be made over to them so that they may be able to effect all the improvements' that they desire to develop the colliery. According to this scheme certain amounts were to be paid to the decree-holders out of the guaranteed profits and 25 per cent of the balance of the remaining profits was to be appropriated by the Syndicate in part payment of the capital sum invested to develop the colliery. All the decree-holders except Hasanali Abdulali agreed that the scheme prepared by the syndicate for payment of their debts may be accepted. This scheme was sanctioned by the Court on 4-5-1933. It would appear from the said order that hasanali and Abdul Ali objected to the scheme to safeguard their interest as creditor of the judgment-debtor company. They had filed a suit against the company and, therefore, it was provided that in case Hasanali succeeded in the Civil Suit and did not accept the guaranteed profits scheme, the Syndicate will continue as receiver on old terms.

( 5 ) THE Syndicate continued as receiver upto 7-1-1941 and worked in accordance with the guaranteed profit scheme. On 7-1-1941 the District Judge, Chhindwara in pursuance of the order of winding up of judgment-debtor company appointed Shri ghiara and Shri Manjrekar as official liquidators: vide order dated 7-1-1941 fat paces 870 to 876 of Paper Book, Part TTT ). Shri Ghiara's appointment was objected to on the ground that he was the managing director of the Syndicate. But the Court considered his appointment necessary to safeguard the interest of the syndicate which had invested large sums of money