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2005 Supreme(Guj) 151
Gujarat High Court
Judgename :K.A.Puj
INDIAN BANK - Appellant
Versus
O.L.OF SATNAM EXPORT (INDIA) LTD - Respondent
COMPANY APPLICATION 14 of 2004
Decided On : 03/09/2005
Subject
Company Law - Winding Up
Act Referred
COMPANIES ACT : S.456, S.537, S.446, S.10, S.442
CONSTITUTION OF INDIA : Art.227
RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT : S.22, S.34(1), S.19(18)(e), S.34, S.529, S.19(22), S.18
Headnote
In the present case, when a specific prayer is made to direct the O.L. to hand over the possession to the Recovery Officer appointed by the Tribunal, this Court is bound to follow the judgment of the Honble Supreme Court in the case of Allahabad Bank vs. Canara Bank, 2000 (101) Company Cases 64 (SC), as in no uncertain terms, it is held that only Section 529-A is attracted to proceedings before the Tribunal and on questions of adjudication, execution and working out priorities, the Special Provisions made in the RDB Act have to be applied. The Official Liquidator is therefore directed to hand over the possession of the entire assets movable as well as immovable of the company in liquidation to the Recovery Officer appointed by the Debt Recovery Tribunal. The Recovery Officer shall undertake the task of sale of the properties of the company in liquidation by following due procedure of law and in accordance with the statutory provisions. After the assets are sold and the amount is realised, the Debt Recovery Tribunal shall determine the priority claim of the secured creditors keeping in mind the provisions contained in Section 529-A of the Act and before any distribution of the amount is made amongst the creditors, the Official Liquidator taking care of workmens interest and the present respondent No. 2 i.e. IDBI may also be heard in the matter. The Court has not decided the priority claims of the contesting parties. The Tribunal shall look into it and after close scrutiny and proper appreciation of the documentary evidence that may be led, the rival claims of the parties shall be decided. The Official Liquidator is further directed to render all assistance to the Recovery Officer appointed by the Debt Recovery Tribunal for successfully and effectively carrying out the sale of the properties of the company in liquidation. It is open for the parties to approach this Court if there is any dispute with regard to distribution of sale proceeds.
Cases Referred :
Allahabad Bank vs. Canara Bank, 2000 (101) Company Cases 64 (SC);; Panner Peterson Limited vs. State of Hyderabad & Ors., 106 Company Cases 338;; State Bank of Hyderabad vs. Pennar Paterson Ltd. & Ors., 114 Company Cases 66.
( 1 ) THE applicant, namely, Indian Bank has taken out this Judges Summons seeking direction to the O. L. to hand over the properties as mentioned in Schedule A as well as Schedule B to this application to the Recovery Officer, Debts Recovery Tribunal as appointed by the Debts Recovery Tribunal, Ahmedabad in Original Application No. 18 of 2000 and to co-operate the Recovery Officer for the sale of the said properties.
( 2 ) AN affidavit is filed by Shri Narayan, the Manager of the applicant Bank in support of the Judges Summons. Mr. Dharmesh V. Shah, learned advocate appearing for the applicant Bank has submitted that M/s. Gujarat State Financial Corporation has filed Company Petition No. 277 of 1997 for winding up of M/s. Satnam Export (India) Limited and the O. L. was appointed as the liquidator of the said Company. He has further submitted that the applicant has filed Original Application No. 18 of 2000 in the Debt Recovery Tribunal, Ahmedabad on 13. 01. 2000 to recover a sum of Rs. 4,77,30,936. 91 together with further interest @ 19. 89% with quarterly rests from the date of filing of the application till realisation. The Debts Recovery Tribunal, Ahmedabad has vide its order dated 22. 12. 2000, appointed the Receiver to take the charge and for sale of the hypothecated movables as well as mortgaged immovable properties of the Company in liquidation.
( 3 ) MR. Shah has further submitted that the applicant is the Secured Creditor and is entitled to recover its dues by attaching and selling the said properties through the Court Receiver appointed by the Debts Recovery Tribunal, Ahmedabad in O. A. No. 18 of 2000. The custody of the said properties was taken by the Receiver, which has been appointed by the DRT after following the due process of law. The Company in liquidation has stopped its activities since long and the properties are lying idle, without any proper care and maintenance. Pursuant to the order passed by this Court on 16. 01. 2001 to wind up the respondent Company, the O. L. has informed the applicant vide its letter dated 06. 02. 2001 that the O. L. would take charge of the property of the Mills Company. The O. L. as well as the Court Receiver as appointed by DRT have taken over the possession of the immovable properties along with the movables and they have sealed the said premises. The O. L. has also deputed his Security Personnels at the said premises to protect the assets of the Company in Liquidation. The DRT has finally heard O. A. No. 18 of 2000 and directed the Registry of the DRT to issue Recovery Certificate for Rs. 4,77,30,936. 91 together with further interest @ 15% p. a. and cost of the application. Pursuant to the said direction, the Registry of DRT has issued Recovery Certificate No. 1206 which was sent to the Recovery Officer, DRT, Ahmedabad for further execution.
( 4 ) MR. Shah has, therefore, submitted that the applicant being the Secured Creditor intends to realise its dues by selling and disposing of its securities. The procedure followed by the DRT is summary in nature and the Honble Supreme Court in the case of Allahabad Bank V/s. Canara Bank, (2000) 101 COMPANY CASES 64 (S. C.) held that the jurisdiction of the DRT is exclusive in regard to jurisdiction of debt as well as its execution. No leave of the Company Court under Sections 442, 446 and 529 is also necessary. The Provisions of Section 34 of the Recovery due to Banks and Financial Institutions Act, 1993 have an over riding effect on the provisions contained in the Companies Act, 1956 and, therefore, the relief claimed by the applicant in the present application is required to be granted.
( 5 ) PURSUANT to the leave to join the party granted by this Court on 23. 01. 2004, Industrial Development Bank of India (IDBI) has been joined as party - respondent in the present application. An affidavit-in-reply was filed on behalf of IDBI on 25. 02. 2004. Mr. H. M. Bhagat, learned advocate appearing for respondent No. 2 has submitte
