1. This application is filed by Official Liquidator under Section 537 read with Section 436 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959 to declare the sale of assets of the company (in liquidation) by respondent Nos.1 and 2 as void and to direct the respondents to handover the assets of the company (in liquidation) to the official liquidator.

2. Notice of this application came to be ordered on the respondents. They were duly served and unrepresented and as such they were placed exparte by order dated 26.06.2008. This Court considered the claim of the Official Liquidator (hereinafter referred to as ‘OL’ for brevity) and by order dated 25.11.2008 allowed the application and directed the respondents to handover the assets of the company (in liquidation). Being aggrieved by this order respondents-1 and 2 filed appeal in OSA No.19/2009 and 10/2009. Said appeal came to be disposed of by order dated 07.07.2011 and both the appeals were allowed by accepting the plea put forward by the appellants therein namely, that they should be afforded an opportunity before the Company Court to put forth their defence. The matter came to be remanded to the Company Court for consideration afresh.

3. Pursuant to the said order of remand, respondents-1 and 2 have filed their objections to the application. The summary of the objections raised by first and second respondents are as under:-

OBJECTIONS OF FIRST RESPONDENT:-

3.1 Company (in liquidation) had borrowed loan and a charge had been created over the immovable property by mortgaging the same in favour of Bank and on account of the said company (in liquidation) becoming defaulter O.A.194/1997 was filed for recovery of Rs.71,03,955/- with interest and other charges and said application came to be allowed on 26.06.2000. Pursuant to the said order, recovery certificate came to be issued and the Recovery Officer of DRT attached said property on 27.06.2005 and thereafter public notice dated 02.10.2005 was issued for auctioning property to be held on 05.10.2005. Second respondent was successful bidder and it was sold to him by Recovery Officer, DRT and auction sale was confirmed on 16.11.2005.

3.2 It was further contended that Recovery Officer through public notice had called on creditors of any priority claims and nobody had claimed except KIADB which was allowed partly and proceeds of sale of mortgaged property were adjusted towards debt due to the applicant after clearing the dues of KIADB as allowed by Recovery Officer.

3.3 After three years the secured creditor received copy of the judgment dated 25.11.2008 and only then it came to its knowledge about company petition 167/1999 had been filed against company (in liquidation) for winding up and same was ordered to be wound up by this Court by order dated 29.06.2006 as also the OL having taken charge.

3.4 The application is not maintainable and leave of the Company Court is not required since jurisdiction of Tribunal is exclusive and Tribunal alone has to decide applications for recovery of debts due to Banks or financial institutions under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘DRT Act’). Under Section 18 of DRT Act the jurisdiction of any other Court or authority would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon liability is exclusively vested in the Tribunal. It is also contended that execution of Recovery certificates issued under Section 19(22) of the DRT Act is vested with the Recovery Officer exclusively. The procedure contemplated under Chapter V of the Act is to be followed. It is not the intendment of the Act that while basic liability of defendant is to be decided by Debt Recovery Tribunal (hereinafter referred to as ‘Tribunal’). Under Section 17 of DRT Act, the Banks or financial institutions will have to go to Civil Court or Company Court or some other authority outs