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TMI Blog2005 (7) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... d be seen from the affidavit filed on behalf of the applicants, is as follows : 3. The company in liquidation was ordered to be wound up on 20-2-1996, by this Court in C.P. No. 39 of 1994 pursuant to the recommendation of the BIFR under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1986. Even before the company was ordered to be wound up, one of the secured creditors of the company, viz., ICICI Ltd. instituted a Suit No. 3781 of 1994 on the file of the High Court, Mumbai. The High Court, Mumbai, appointed a receiver, who took possession of the company s factory at Vadalur, South Arcot District and also books and records of the company. As the winding up of the company was ordered and the official liquidator was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port filed by the official liquidator, it is stated that as the claims of the workmen have not been concluded, the official liquidator has not participated in the proceedings before the Debt Recovery Tribunal. It is his further case that the applicants being the ex-directors of the company have no locus standi to file this application. 6. Section 448 of the Companies Act, 1956 (hereinafter referred to as "the Act"), relates to the appointment of official liquidator in the event a company is ordered to be wound up. In terms of section 449 of the Act, on a winding up order being made in respect of a company, the official liquidator shall, by virtue of his office, become the liquidator of the company. In terms of sub-section (1) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners entitled to appear before the Tribunal under section 10GD to assist him in the performance of his duties. 8. In terms of section 529, in the winding up of an insolvent company, the rules applicable to the winding up shall prevail and be observed. As per the proviso to the said section, which was introduced by the Companies (Amendment) Act, 1985, the security of every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen s portion therein, and, where a secured creditor, instead of relinquishing his security and proving his debt, opts to realise his security, the liquidator shall be entitled to represent the workmen and enforce such charge and the amount real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes the power to carry on the business of the company so far as may be necessary for the benefit of the company in liquidation. The official liquidator has also the power to sell the immovable and movable property and actionable claims of the company by public auction or private contract. Once the winding up of the company is ordered, the official liquidator shall take the custody of all the properties, effects and actionable claims to which the company is or appears to be entitled. The position of the liquidator is essentially that of an agent employed for the purpose of winding up of a company. 9. Participation of the official liquidator in the proceedings before DRT, Mumbai, is in discharge of his duties and as a necessary coro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the RDB Act, 1993, confer exclusive jurisdiction in the Tribunal and the Recovery Officer in respect of debts payable to banks and financial institutions and there can be no interference by the company court under section 442 read with section 537 or under section 446 of the Companies Act, 1956. In respect of the monies realised under the RDB Act, the question of priorities among the banks and financial institutions and other creditors can be decided only by the Tribunal under the RDB Act and in accordance with section 19(19) read with section 529A of the Companies Act and in no other manner. The provisions of the RDB Act, 1993, are to the above extent inconsistent with the provisions of the Companies Act, 1956 and the latter Act has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-11-2002. Advertisement for public sale was issued on 6-12-2002. The sale was accepted and a certificate of sale was issued by the Debt Recovery Tribunal on 9-7-2003. 13. The proceedings of the Debt Recovery Tribunal show that after the suit was transferred from the High Court, Mumbai, notice was ordered on 25-6-2001. The Debt Recovery Tribunal was infor- med on 11-7-2001, as to the fact that the company was in liquida- tion and the official liquidator, Madras, was appointed in the matter. Hence an application was taken out to bring the official liquidator on record on 27-9-2001. Notice was issued on 8-10-2001. The said notice was served on the official liquidator, as could be seen from the endorsement made by the Debt Recovery Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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