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Issues Involved:
1. Jurisdiction of the Debts Recovery Tribunal (DRT) and the requirement of leave from the company court. 2. Validity of the auction sale of the property under the Tamil Nadu Recognised Private Schools (Regulation) Act. 3. Ownership claims over the auctioned property by third parties. Detailed Analysis: 1. Jurisdiction of the Debts Recovery Tribunal (DRT) and the requirement of leave from the company court: The primary issue was whether the secured creditor, Industrial Development Bank of India, could proceed with the recovery process through the DRT without obtaining leave from the company court, especially when winding-up proceedings were already initiated against the debtor, Rajalakshmi Mills Limited. The petitioner, Times Guarantee Limited, argued that the DRT's actions were against the statutory provisions of the Companies Act, which require leave from the company court for any proceedings after a winding-up order. The court referred to the Supreme Court's judgment in Allahabad Bank v. Canara Bank [2000] 101 Comp Cas 64 which clarified that the DRT and Recovery Officers have exclusive jurisdiction in their respective spheres for adjudicating and executing recovery of debts due to banks and financial institutions. It was held that the leave of the company court is not necessary under Sections 537 or 446 of the Companies Act for proceedings before the DRT. The court emphasized that the provisions of the RDB Act, which give overriding effect to its provisions, would prevail over the Companies Act. Consequently, the petition by Times Guarantee Limited was dismissed. 2. Validity of the auction sale of the property under the Tamil Nadu Recognised Private Schools (Regulation) Act: The second issue was raised by the secretary of Rajalakshmi Mills High School, who contended that the auction sale of the property where the school was situated was illegal under Section 31 of the Tamil Nadu Recognised Private Schools (Regulation) Act, 1973. This section prohibits the transfer of school property without prior permission from the educational authorities. The court did not agree with this contention, stating that the auction conducted by the Industrial Development Bank of India was under a Central legislation, which has overriding jurisdiction. The court also noted that no documents were provided to prove that the school property was separate from the debtor Rajalakshmi Mills. The court referred to a previous Division Bench order which had already non-suited a similar claim by the parent-teacher association of the school. However, the court acknowledged the humanitarian concern for the students and staff and recorded the auction purchaser's undertaking to continue running the school until an alternative site was found. Thus, the petition by Rajalakshmi Mills High School was dismissed. 3. Ownership claims over the auctioned property by third parties: The third issue was raised by K.P. Natarajan, who claimed ownership of a portion of the auctioned property. He argued that the property was his by virtue of settlement deeds dated March 16, 1979, and April 1, 1981. The court found that such factual disputes over ownership could not be resolved through a writ petition and should be addressed in a different legal forum. The court emphasized that the DRT and Recovery Officers have exclusive jurisdiction over the auction process as upheld by the Supreme Court. Therefore, the writ petition by K.P. Natarajan was dismissed. Conclusion: The court dismissed all three writ petitions, emphasizing the exclusive jurisdiction of the DRT and Recovery Officers for proceedings under the RDB Act. It upheld the validity of the auction sale conducted by the secured creditor and dismissed the claims based on the Tamil Nadu Recognised Private Schools (Regulation) Act and ownership disputes. The court also recorded the auction purchaser's undertaking to ensure the continued operation of the school, addressing the humanitarian concerns raised.
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