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TMI Blog2008 (3) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... this court cannot take the view that it is an ex-parte decree or it is passed without any adjudication. The court, therefore, at this stage does not issue any direction to respondent No. 1 bank to refund the excess amount. It is, however, open for the official liquidator to approach the Debts Recovery Appellate Tribunal challenging the decree in question X X X X Extracts X X X X X X X X Extracts X X X X ..... 385 of 1997 34,02,715 2. 19.01.1999 799 of 1993 7,00,000 3. 11.01.2000 2,30,00,000 4. Adjusted against FDR lying with CBI in compliance of DRT orders 60,00,000 Total 3,31,02,715 Gujarat State Financial Corporation Sl. No. Order dated Company Application No. Amount (Rs.) 1. 14.10.1997 385 of 1997 34,02,715 Total 34,02,715 Gujarat Industrial Investment Corporation Sl. No. Order dated Company Application No. Amount (Rs.) 1. 14.10.1997 385 of 1997 34,02,715 2. 11.01.1997 50,00,000 Total 84,02,715 Workers Sl No. Order dated Company Application No. Amount (Rs.) 1. 1410.1997 385 of 1997 34,02,715 2. 16.09.1998 799 of 1993 4,34,563 3. 19.01.1999 799 of 1993 10,30,505 4. 30.12.1999 32,43,915 Total 81,11,698 The total amount disbursed by the official liquidator to the secured creditors and workers of the company as per the directions of this court are as under: Sl No. Name of Organization Amount disbursed (Rs.) 1. Central Bank of India 3,31,02,715 2. GSFC 34,02,715 3. GIIC 84,02,715 4. Workers 81,11,698 Total 5,30,20,860 The official liquidator has also stated in his report that by an order dated July 29, 2003, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, if any, to the Central Bank of India and the basis of that calculation. The Central Bank of India had lent and advanced sizable financial assistance to the company in liquidation and since the said financial assistance remained unpaid by the company, the bank after obtaining necessary leave of this court, filed Civil Suit No. 193 of 1992 in the City Civil Court, Ahmedabad, against the company and other answerable parties for recovery of Rs. 1,80,50,991.88 together with further interest at 23.25 per cent. from January 9,1992, till realisation. The said suit came to be transferred to the Debts Recovery Tribunal, Ahmedabad, and the Presiding Officer of the Debts Recovery Tribunal decreed the suit on December 15,1998, with costs by directing the company in liquidation and other answerable parties to pay Rs. 1,80,50,991.88 with interest at 23.25 per cent, per annum. Thereafter, the Central Bank of India again approached this court seeking permission to execute the said certificate of recovery by filing Company Application No. 358 of 1999 and this court vide order dated June 29, 2000, granted the said company application and permitted the bank to recover its dues against the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same has duly been accepted and acknow ledged by the official liquidator. It is further stated that respondent No. 2 is not liable to repay any further amount as claimed by the official liquidator in his report. On behalf of the workers, an affidavit of proof of debt was filed wherein it is stated that the workers have not been paid to the fullest extent and hence, after recovery effected from the secured creditors, the amount should be paid to them. Earlier this court has passed an order on October 17, 2007. The court was of the view that proper compliance of undertaking given to the court must be made by the parties. Before its compliance, no contention raised by the parties can be entertained, as it would nullify the sanctity of the order passed by this court and also of the undertaking. The court was further of the view that as per the report of the chartered accountant, the loan transaction over the immovable property being the secured creditor is for Rs. 24,76,192 and the other amount to be recovered by the bank is towards the working capital and not as the secured creditor. Further, as per the order of the Debts Recovery Tribunal, since suit was for the composite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained a decree from the competent court, i.e., the Debts Recovery Tribunal and unless and until that decree has been challenged or got upset, it cannot be said that respondent No. 1 bank has been paid any excess amount. He has further submitted that all the secured creditors including respondent No. 1 bank as well as the workers have been paid to the fullest extent and hence respondent No. 1 bank is entitled to retain the amount given to the bank towards its decretal amount. For this purpose he relied on the decision of the hon'ble Supreme Court in the case of Allahabad Bank v. Canara Bank [2000] 101 Comp. Cas. 64; [2000] 4 SCC 406, wherein it is held that the jurisdiction of the Tribunal in regard to adjudication is exclusive. The RDB Act requires the Tribunal alone to decide applications for recovery of debts due to banks or financial institutions. Once the Tribunal passes an order that the debt is due, the Tribunal has to issue a certificate under section 19(22) to the recovery officer for recovery of the debt specified in the certificate. The court further held that basically the Tribunal is to adjudicate the liability of the defendant and then it has to issue a certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of his submission he relied on the decision of the Kerala High Court in the case of Federal Bank Ltd. v. Official Liquidator [2003] 113 Comp. Cas. 410, wherein it is held that dues of the workmen of a company in liquidation and debts due to the secured creditors under section 529A of the Companies Act, 1956, are to be treated pari passu and shall be paid in priority to all other debts. In a case where there is no surplus after payment in full of all the claims admitted to proof, the creditors who stood outside the winding up proceedings as well as the secured creditors who fall under section 529A would be treated alike to the extent of being granted interest at the rate of 4 per cent, under rule 179 of the Rules. But, where there is a surplus amount after satisfying the decree of secured creditors, including secured creditors who stood outside the winding up as well as those who are covered under section 529A read with rule 179, the secured creditors who obtained a decree with interest at a rate higher than 4 per cent, would be entitled to realise the said interest from the surplus amount. In such an event, even though there is a surplus, the secured creditors covered under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istribution of the proceeds of the sale of the assets held at the instance of the financial institutions coming under the Recovery of Debts Act or of the financial corporations coming under the State Financial Corporations Act, can only be with the association of the official liquidator and under the supervision of the company court. The right of a financial institution or of the recovery Tribunal or that of a financial corporation or the court which has been approached under section 31 of the State Financial Corporations Act, to sell the assets may not be taken away, but the same stands restricted by the requirement of the official liquidator being in association with it, giving the company court the right to ensure that the distribution of the assets in terms of section 529A of the Companies Act takes place. The court further held that there is no inconsistency between the decisions in Allahabad Bank v. Canara Bank [2000] 101 Comp. Cas. 64; [2000] 4 SCC 406 and in International Coach Builders Ltd. v. Karnataka State Financial Corporation [2003] 114 Comp. Cas. 614 (SC), in respect of the applicability of sections 529 and 529A of the Companies Act in the matter of distribution amon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. The secured creditors and workers have been paid. The official liquidator is not in a position to state that any amount is to be paid to any other secured creditor or the workman. Even if the amount is to be recovered from respondent No. 1 bank, that is to be paid as per the provisions contained in section 530 of the Companies Act, 1956. The decision of the apex court in Allahabad Bank v. Canara Bank [20001 101 Comp. Cas. 64 ; [2000] 4 SCC 406 as well as Kerala High Court in federal Bank Ltd. v. Official Liquidator [2003] 113 Comp. Cas. 410, clearly states that under rule 179 of the Companies (Court) Rules, 1959, the decree holder can get the decreetal amount with interest at the rate of 4 per cent, per annum and even then if any surplus is left the interest awarded by the Debts Recovery Tribunal should be paid to such decree holder. Since the Debts Recovery Tribunal has passed the decree it is presumed that the decree was passed after proper adjudication. So long as the decree remains in existence this court cannot take the view that it is an ex-parte decree or it is passed without any adjudication. Proper forum for challenging the decree is the Debts Recovery Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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