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2016 Supreme(Raj) 637
IN THE HIGH COURT OF RAJASTHAN (JAIPUR BENCH)
Alok Sharma, J.
IFCI Ltd. - Applicant
Versus
Official Liquidator and Anr. - Respondents
Company Application No. 19, 20 of 2016 Both in Misc. Company Application No. 38 of 2012 in S.B. Company Petition No. 23 of 2006
Decided On : 22-04-2016
For the Applicant :Mr. Shashank Agarwal and Mr. R.N. Vijay, Advocate.
For the IFCI Ltd :Mr. Ashok Mehta, Sr. Advocate with Mr. Vibhor Kapoor, Advocate.
For the Objectors :Mr. Gaurav Sharma, Mr. R.B. Mathur and Mr. Amol Vyas. Advocate.
For the Official Liquidator :Ms. Sonal Singh and Mr. R.K. Meena, Advocates.
Headnote:
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Section 19 - limitation Act, 1963 - Section 14, 5 - Cement Ltd. was wound up by the order of this Court passed on 21.11.2008 in Company Petition - Prior thereto the Official Liquidator was appointed as provisional liquidator vide order in pursuance whereto he took possession of the moveable and immovable assets of the company aforesaid in winding up. It appears that IFCI Ltd., the secured creditor of the company, seeking to recover its unpaid secured loan advanced to the company had earlier approached the Debt Recovery Tribunal, Mumbai (hereinafter “DRTM”) prior to the companys liquidation, filing an application under Section 19 of the Act of 1993 - Recovery certificate thereupon came to be issued in its favour - Said recovery certificate was transferred for execution to the DRT as the properties of the judgment debtor company are situate in Rajasthan - Held, delay in filing the appeals for the period during which the objectors have been before this Court i.e. from the date of filing of applications for impleadment and counter application till the date of this order would stand excluded a la Section 14 of the Limitation Act. The appeals be filed within a period of two weeks from today. In the event of appeals being so filed and held to be within limitation or limitation being otherwise condoned under Section 5 of the Limitation Act, 1963, Appellate Authority is directed to dispose them of within a period of three months of their presentation - Claim of the applicants- Infrastructure Ltd. and Delhi Tax-Mac Traders to possession of the properties purchased at the auction would abide decision in the appeals - Cannot be said that the applications now dismissed were wholly without legal foundation or purely vexatious. Consequently the security amount deposited by each of the applicants be refunded to them - All application disposed of as a above-delay condoned under section 14 of limitation Act, 1963, security amount be refunded to applicants - Appeal is Disposed of
Alok Sharma, J.
A common question of law as to the jurisdiction of a Company Court in respect of execution of a recovery certificate issued by the Debt Recovery Tribunal under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter “the Act of 1993”) arises in all the applications/cross-objections/counter applications filed on similar underlying facts. Hence all the applications are being disposed of by this common order.
2. M/s. Thar Cement Ltd. was wound up by the order of this Court passed on 21.11.2008 in Company Petition No. 23/2006. Prior thereto the Official Liquidator was appointed as provisional liquidator vide order dated 05.02.2007 in pursuance whereto he took possession of the moveable and immovable assets of the company aforesaid in winding up. It appears that IFCI Ltd., the secured creditor of the company, seeking to recover its unpaid secured loan advanced to the company had earlier approached the Debt Recovery Tribunal, Mumbai (hereinafter “DRTM”) prior to the company's liquidation, filing an application under Section 19 of the Act of 1993. A recovery certificate thereupon came to be issued in its favour on 08.07.2004. The said recovery certificate was transferred for execution to the DRT at Jaipur (“DRTJ”) as the properties of the judgment debtor company are situate in Rajasthan.
3. As the properties were in possession of the Company Court through the Official Liquidator under the Company Court's order dated 05.02.2007, Application No. 38/2012 came to be filed before the Company Court at the instance of the secured creditor-IFCI Ltd. under Rule 9 of the Company (Courts) Rules, 1959 (hereinafter “the Rules of 1959”) seeking permission to stay outside winding up and sell the judgment debtor company's mortgaged properties in terms of the recovery certificate dated 08.07.2004 issued by DRTM. The Official Liquidator did not oppose the application for permission to IFCI Ltd. to stay outside winding up proceedings and sell the properties mortgaged with it provided the applicant-IFCI Ltd. fulfilled various conditions. Of primary relevance, to the adjudication of the application under consideration, were conditions set up by the Official Liquidator that the sale by the secured creditor-IFCI Ltd. in pursuance to the permission of the Company Court be subject to the confirmation and supervision of the court; that the sale proceeds received from the sale of the mortgaged property be deposited with the Official Liquidator; and further that the secured creditor-IFCI Ltd. then file its claim along with others, before the Official Liquidator for adjudication/disbursement in accordance with law. On consideration of the matter, the Company Court vide its order dated 29.11.2012 while granting permission sought directed that the auction sale would be confirmed after seeking its permission and that the sale proceeds be deposited with the Official Liquidator. Disbursement was then to be done by the Official Liquidator in accordance with Sections 529 & 529-A of the Companies Act, 1956 (hereinafter “the Act of 1956”)”.
4. It is not in dispute that pursuant to the aforesaid order dated 29.11.2012, the Recovery Officer, DRTJ vide order dated 27.10.2014 ordered auction in pursuance of the recovery certificate dated 08.07.2004 issued by DRTM. Consequently the mortgaged (immovable) and hypothecated (movable) properties of the judgment debtor company (in liquidation) were put to auction on 19.01.2015. M/s. SPC Infrastructure Pvt. Ltd. was found to be the highest bidder at Rs.2.91/- crore for purchase of Lot No. 2 i.e. Land & Building. It is not in dispute that the amount as required under the terms and conditions of the auction was deposited within time. Qua movable properties (Lot No.1 Plant & Machinery), ditto for Delhi Tax-Mac Traders.
5. Despite the auction on 19.01.2015, where M/s. SPC Infrastructure Pvt. Ltd. was the highest bidder for the land and building of the judgment debtor company (
