9911796707
TMI Blog1999 (8) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... led O.S. No. 139 of 1990 on the file of the Subordinate Judge, Tirupathi, against Mopeds India Ltd., on the strength of the hypothecation deed. It had obtained permission to stay outside the winding-up proceedings in C.A. No. 221 of 1990 on 7-12-1990 on terms. 3. Later, O.S. No. 139 of 1990 has been transferred from the Court of subordinate judge, Tirupathi, to the Debt Recovery Tribunal, Bangalore and it has been registered as C.A. No. 814 of 1997. The third respondent, i.e., the A.P. State Finance Corpn. Ltd. (APSFC) has obtained leave of this Court on 28-12-1994 for disposing of the properties of Mopeds India Ltd. now in liquidation and in pursuance thereof the assets in question had been sold by APSFC and the proceeds are kept under suspense account of APSFC and Canara Bank. The official liquidator is yet to quantify the wages of workmen of Mopeds India (P.) Ltd. It is reported that proceedings for quantifying the wages of workmen are pending before the official liquidator in pursuance of the orders passed in C.A. No. 32 of 1996 in O.A. No. 814 of 1997 pending before the Debt Recovery Tribunal, Bangalore, against Moped India (P.) Ltd. now in liquidation. The official liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for transferring the proceedings. The provisions of section 446(3) the Companies Act have been enacted with a view to give jurisdiction to the Company Court to deal with all matters concerning a company which has been ordered to be wound-up. The cases would be tried by the Company Court for the sake of convenience as also to avoid conflicting orders. 7. On the other hand, the learned counsel of the 2nd respondent has argued that the Debt Recovery Tribunal has got exclusive jurisdiction to try the cases and the winding-up proceedings which had started subsequently against the company (now in liquidation) cannot exercise powers under section 446. Because, section 34 of the Act, 1993 prevails over section 446. The exercise of powers of the Company Court under section 446 is excluded by section 34. He has also argued that permission had been granted to stay out of the liquidation about nine years before and there would be no conflicting orders because the claim of the petitioner bank is to be considered and decreed by the Debt Recovery Tribunal while the wages of the workmen are to be quantified by the liquidator, which when quantified shall become pari passu under section 529 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re had so intended. In any case, there could be little doubt that such an interpretation would create an undesirable state of affairs. The Company Court would be making one set of orders and the Tribunal a different one. Once the company was in liquidation under section 446 it was mandatory to obtain leave of the Company Court to institute a suit against that company, and upon obtaining such leave, the suit would have to be heard by that court unless that court allowed the filing of and proceeding with the suit in a different court or forum. A reasonable and harmonious interpretation would surely be in the present circumstances that the non obstante clause in the Companies Act would operate in its full force, and the suit would be heard by the Company Court. The provisions or the non obstante clause in the Debt Recovery Act would have no effect on the procedures as contained in the Companies Act. Consequently, there would be no conflict in the operation of the two clauses. For it was on record that section 446 was not repealed and it could not be said with any certainly that there appeared any intention of the Legislature anywhere in either of the enactments, that the later ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erriding effect over any other law. 10. 1993 Act is a special law to deal with the applications by the banks and financial institutions for recovery of debts. Companies Act, 1956 is also a special law. Section 446 of the Companies Act, 1956, which contains a non obstante clause is also a provisions to exclude all other laws with regard to pending suits in which company in liquidation is a party. The 1993 Act is also a special law enacted by the Parliament itself. So, when that later special law was enacted, the Parliament would have certainly in mind the provisions in the earlier special law, namely, the Companies Act, 1956. Thus, it was notwithstanding the special provision contained in the Companies Act, 1956, that section 31 had been enacted in 1993 Act . Therefore, the later special law will prevail over the former. Necessarily, the Company Court will not have jurisdiction with regard to suits or applications pending on or after the appointed day as per the 1993 Act . Thus, exercise of power by the Company Court under section 446 of the Companies Act, 1956, is excluded by section 34 of the 1993 Act." (p. 275) 12. In the case of Industrial Credit Investment Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, who has approached the civil court happens to be one who has lent huge amount, or be one who is the main secured creditor. In such a situation, on approach being made by such creditor, we have no doubt that Company Court would duly take note of this fact and should like to grant leave required by sub-section (1) of section 446; and by the same token refuse to transfer the proceeding to his court. This is not to say that in all cases where the proceedings have been initiated by the main secured creditor, the Company Court would grant leave. Much would depend on the circumstances of each case. But, if the position be that the secured creditor who had approached the civil court is one amongst many similar creditors, it may be that the Company Court feels that to take care of the interest of other secured creditors, either the relief of leave does not deserve to be granted or that the proceeding is required to be transferred to it for disposal. It may be pointed out that sections 529 and 529A of the Act do contain provisions in so far as the priority of secured creditor s claim is concerned. Of course, the Company Court would not transfer the proceeding to it merely because of its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor, it would be possible to satisfy the workmen s dues pari passu. 14. The Act 1993 is concerned with the process of recovery of the debts only and this has been enacted only with a view to expedite the procee-dings for recovery of the loan amounts, while the Companies Act consists of uniform law throughout India relating exclusively to companies. The Company Court is competent to adjudicate all matters relating to companies including the companies in liquidation. Special protection has also been reserved to the workers under section 529A to be regarded in pari passu with other secured creditors. Thus, it cannot be said that the laws in the two enactments operate in the same field. 15. For the foregoing reasons, I am in complete agreement with the view taken by the learned Single Judge of the Calcutta High Court that the non obstante clause in the Companies Act operates in its full force and the provisions of the non obstante clause in the Act, 1993 has no effect and, therefore, there is no conflict on the operation of the two clauses, disagreeing respectfully with the view expressed by the learned Single Judge in the case of Industrial Credit Investment Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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