9911796707
TMI Blog2004 (8) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial Reconstruction (BIFR) recommended winding up of the company M/s. U.P. Chemical and Carbide Ltd. (hereinafter referred to UPCCL ) before the High Court of Judicature at Allahabad in the year 1994. The said High Court vide its order dated 19-7-1994 directed the winding up of UPCCL as no one opposed it nor company filed any appeal against the reference order of BIFR. Consequently, Official Liquidator under directions of the Court started taking steps for winding up of the company. After exchange of affidavits and counter-affidavit in the year 1996 the Official Liquidator sought permission to sell the assets of the company by auction. Meanwhile, the workers through their union filed application under section 529A of the Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,65,12,174.00 and 379 Ex-Workers claim was to the tune of Rs. 1,89,16,530.00 total amounting to Rs. 15,46,17,964.00. The Official Liquidator made the following submissions in his report for disbursement of the amount. (I)The Official Liquidator may be permitted to declare dividend at the rate of 45.3 paise per rupee to the secured creditor and ex-workers. (II)The Official Liquidator may be permitted to dispense with the settlement of claims of unsecured creditors in the absence of insufficient funds. (III)The Official Liquidator may be permitted to dispense with the settlement of the list of contributories in absence of insufficientfunds. (IV)The Official Liquidator may also kindly be permitted for issue notices to the secured cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The Official Liquidator filed objections in the said proceedings. The DRT after considering the submissions of the parties before it, issued recovery certificates under section 31A of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDBFI Act). The said recovery certificate was sent to DRT, Lucknow and notices were sent to the Official Liquidator in the matter. As such the Official Liquidator had full knowledge of the recovery proceedings before the DRT. The Indian Overseas Bank in the objections has raised the plea that once DRT got seized with the matter, the Official Liquidator loses its jurisdiction in the liquidation. It is further alleged in the objections that the Official Liquidator concealing the facts has su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0] 4 SCC 406. In para No. 50 of the said case the Apex Court has held as under: "For the aforesaid reasons, we hold that at the stage of adjudication under section 17 and execution of the certificate under section 25 etc. the provisions of the RDB Act, 1993 confer exclusive jurisdiction on 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 realized 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 accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred by RBDFI Act read with Income-tax Act Schedule II; and on the other hand if the sale proceeds are in the hand of the Official Liquidator then the distribution should be made in the light of section 529A of the Companies Act under the directions of the Company Court. 9. In view of the above discussion this Court feels that the present objections filed on behalf of Indian Overseas Bank are liable to be rejected. Accordingly, the objections are rejected. The interim order dated 6-7-2004 whereby the disbursement of the amount has been stayed is vacated. The report of the Official Liquidator bearing No. 308/2003, dated 2-12-2003 is accepted. The Official Liquidator is allowed to comply with the directions issued by this Court on 3- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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