9911796707
TMI Blog2016 (7) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act of 1993 against the order dated 11.12.2015, passed by the Recovery Officer, DRTJ. In the facts of the case, the delay in filing the appeals for the period during which the objectors have been before this Court i.e. from the date of filing of applications for impleadment and counter application till the date of this order would stand excluded a la Section 14 of the Limitation Act. The appeals be filed within a period of two weeks from today. In the event of appeals being so filed and held to be within limitation or limitation being otherwise condoned under Section 5 of the Limitation Act, 1963, the Appellate Authority is directed to dispose them of within a period of three months of their presentation. The claim of the applicants-M/s. SPC Infrastructure Ltd. and Delhi Tax-Mac Traders to possession of the properties purchased at the auction of 19.01.2015 would abide the decision in the appeals. All applications stand disposed of accordingly. - S.B. COMPANY APPLICATION NO.19, 20/2016, S.B. MISC. COMPANY APPLICATION NO.38/2012, S.B. COMPANY PETITION NO.23/2006 - - - Dated:- 22-4-2016 - MR. ALOK SHARMA, J. For The Appellant : Mr. Shashank Agarwal and Mr. R.N. Vijay, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s set up by the Official Liquidator that the sale by the secured creditor-IFCI Ltd. in pursuance to the permission of the Company Court be subject to the confirmation and supervision of the court; that the sale proceeds received from the sale of the mortgaged property be deposited with the Official Liquidator; and further that the secured creditor-IFCI Ltd. then file its claim alongwith others, before the Official Liquidator for adjudication / disbursement in accordance with law. On consideration of the matter, the Company Court vide its order dated 29.11.2012 while granting permission sought directed that the auction sale would be confirmed after seeking its permission and that the sale proceeds be deposited with the Official Liquidator. Disbursement was then to be done by the Official Liquidator in accordance with Sections 529 529-A of the Companies Act, 1956 (hereinafter the Act of 1956 ) . It is not in dispute that pursuant to the aforesaid order dated 29.11.2012, the Recovery Officer, DRTJ vide order dated 27.10.2014 ordered auction in pursuance of the recovery certificate dated 08.07.2004 issued by DRTM. Consequently the mortgaged (immovable) and hypothecated (movable) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation of the bid and objections thereto. Vide order dated 04.12.2015, this Court directed that the application for confirmation of auction sale dated 19.01.2015 and the objections thereto be addressed at the next sitting of the Recovery Officer, DRTJ as several months had already elapsed from the dated of public auction and the deposit of entire amount by the highest bidder. Vide order dated 11.12.2015, the Recovery Officer DRTJ has rejected the objections to the highest bid at the auction of 19.01.2015 filed by multiple persons/entities. The application/s of the highest bidder/s for confirmation of the bid/s allowed and their bids confirmed. Pursuant to the confirmation dated 11.12.2015 it is on record that the sale certificate qua the properties sold has been issued in favour of the highest bidder/s and also registered. That however was not the end of the matter as even though the sale certificate/s in respect of the properties auctioned on 19.01.2015 pursuant to the order dated 29.11.2012 were issued and registered, the possession of the properties (both movable and immovable of the company in liquidation) still lies with the Official Liquidator. And the Recovery Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Department. The officers of the Commercial Taxes Department present at the auction sale of 19.01.2015 had orally objected to the adequacy of the bid of ₹ 2.91 crore in respect of Lot No.2 comprising of Land Building of the judgment debtor company-M/s. Thar Cement Ltd. (in liquidation), but were overruled by the representative of the secured creditor. And then the highest bid of M/s. SPC Infrastructure Ltd. wrongly accepted. Cartelisation of the bid qua Lot No.2 is alleged. It has been submitted in the alternative that under Section 47 of the Rajasthan Value Added Tax Act, 2003 (hereinafter VAT Act), the Commercial Taxes Department has first charge over the properties of the defaulting company / dealer to the exclusion of all other claimants-including the secured creditor. Similarly provisions obtained under Section 50 of the Rajasthan Sales Tax Act, 1994 (hereinafter RST Act ) to the same effect. This is the view also taken by the Apex Court in the case of Central Bank of India Vs. State of Kerala [2009 (4) SCC 94] . It has been submitted that in these circumstances, a copy of communication dated 03.03.2006 by the Official Liquidator to whom a claim for disbursement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (10% enhancement) it has been finally submitted that the public auction conducted by DRTJ was neither proper, nor legal as the valuation report was prepared by Rajasthan Consultancy Organization Ltd. in August, 2014 was erroneous and biased for the reason that the certificate holder-IFCI Ltd. has a stake and shares in the said Organization. Mr. Ashok Mehta, Sr. Advocate appearing with Mr. Vibhor Kapoor, for the certificate holder-IFCI Ltd. under DRT's recovery certificate dated 08.07.2004 and Mr. Shashank Agarwal appearing for successful bidder-M/s. SPC Infrastructure Pvt. Ltd have submitted that there is no contravention of the order dated 29.11.2012 passed by this Court in Company Application No.38/2012 in the confirmation of the highest bid by the Recovery Officer on 11.12.2015. Mr. Ashok Mehta pointed out that the operative portion of the order dated 29.11.2012 clearly provided that the auction sale shall be confirmed with the permission of this court. The said permission was granted by this Court vide its orders dated 18.09.2015 and 04.12.2015 whereby the Recovery Officer, DRTJ was required to decide the objection against the auction sale as also the application/s f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bid) inasmuch as the question as to the jurisdiction of the Company Court in interfering with the recovery proceedings by Banks and Financial Institutions against the defaulting creditors on a recovery certificates issued under the Act of 1993 was neither formulated nor addressed. Further no reasons founded in law, for the Company Court exercising the jurisdiction in respect of such proceedings set out. It has been submitted that hence no ratio decidendi, which alone is binding on the Court, can thus be culled out from M.V. Janardhan Reddy (Supra) to hold that the Company Court has the jurisdiction to appropriate the power of confirmation of the sale conducted by the Recovery Officer in pursuance to the recovery certificate issued by a Debt Recovery Tribunal pursuant to allowing an application under Section 19 of the Act of 1993. Mr. Ashok Mehta has further submitted that even otherwise M.V. Janardhan Reddy (Supra) did not take into consideration the prior judgment of the Apex Court in the case of Allahabad Bank Vs. Canara Bank Anr. [(2000) 4 SCC 406] wherein it was held that without an iota of doubt, the DRT had exclusive and absolute sole jurisdiction in respect of adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to `execution', the jurisdiction of the Recovery Officer is exclusive. Now a procedure has been laid down in the Act for recovery of the debt as per the certificate issued by the Tribunal and this procedure is contained in Chapter V of the Act and is covered by Sections 25 to 30. It is not the intendment of the Act that while the basic liability of the defendant is to be decided by the Tribunal under Section 17, the Banks/Financial institutions should go to the Civil Court or the Company court or some other authority outside the Act for the actual realisation of the amount. The certificate granted under Section 19(22) has, in our opinion, to be executed only by the Recovery Officer. No dual jurisdictions at different stages are contemplated. Further, section 34 of the Act gives overriding effect to the provisions of the RDB Act. That section reads as follows: Section 34 (1): Act to have over-riding effect- (1) Save as provided under sub-section (2), the provisions of this Act shall effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wound up by an order of the Company court passed under section 446(1) on 9.1.1959. The claim was filed by the LIC against the Company and its Directors before the Tribunal in 1962. The respondents before the Tribunal contended that the claim could not have been filed in the Tribunal without the leave of the company court under section 446(1). This Court rejected the said contention and held that though the purpose of section 446 was to enable the company court to transfer proceedings to itself and to dispose of the suit or proceedings so transferred, unless the Company Court had jurisdiction to decide the questions which were raised before the LIC tribunal, there was no purpose of requiring leave of the Company Court or permitting transfer. It was held by this Court: In view of section 41 of the LIC Act, the Company Court has no jurisdiction to entertain and adjudicate upon any matter which the Tribunal is empowered to decide or determine under that Act. It is not disputed that the Tribunal has jurisdiction under the Act to entertain and decide matters raised in the petition filed by the corporation under section 15 of the LIC Act. It must follow that the consequential provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower under Article 226 227 of the Constitution of India. Reiterating its enunciation of law in the case of Canara Bank (Supra), it was held by the Apex Court that Section 34 of the Act of 1993 overrides the powers of the Company Court under Sections 442, 446 537 of the Act of 1956 and no directive could be issued by the Company Court in respect of proceedings before DRT. The Official Liquidator as representative of the workers' interest in the winding up proceedings would only have a right to be associated with the sale of the mortgaged assets of the Company in liquidation by the secured creditors to ensure that the assets were disposed of in a fair and transparent manner. Yet aggrievement, if any, of the Official Liquidator with regard to the methodology of the disposal of the mortgaged assets of the debtor by the secured creditors pursuant to a recovery certificate could not entail a challenge thereto before the Company Court. In view of the Act of 1993 being a complete code in itself, the Official Liquidator could, if aggrieved, only move the DRT by way of an appeal against the exercise any of powers under Sections 25-30 of the Act of 1993 by the Recovery Officer. Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. It is difficult to conceive that there are two remedies. It is well settled in law that if there is only one remedy, the doctrine of election does not apply and we are disposed to think that the Official Liquidator has only one remedy, i.e., to challenge the order passed by the Recovery Officer before the DRT. Be it noted, an order passed under Section 30 of the RDB Act by the DRT is appealable. Thus, we are inclined to conclude and hold that the Official Liquidator can only take recourse to the mode of appeal and further appeal under the RDB Act and not approach the Company Court to set aside the auction or confirmation of sale when a sale has been confirmed by the Recovery Officer under the RDB Act. Mr. Ashok Mehta also submitted that the Apex Court in the case of Official Liquidator, Uttar Pradesh Uttarakhand (Supra) referring to its earlier judgment in M.V. Janardhan Reddy (Supra) distinguished it and held that it was a case turning on its own facts where the issue under challenge was limited to the authority of Recovery Officer, DRT to confirm the highest bid in the face of the order of the Company Court to the contrary. The Apex Court clearly recorded that in M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly argued by Mr. Ashok Mehta, appearing for secured creditor that the confirmation of the auction dated 19.01.2015 by the Recovery Officer under order dated 11.12.2015 cannot be faulted for being without jurisdiction and/or contrary to the order dated 29.11.2012 passed by this court. The argument of Mr. Gaurav Sharma on this count is founded upon a misreading of the order dated 29.11.2012 and overlooks the subsequent orders passed by this Court on 18.09.2015 and 04.12.2015 directing the Recovery Officer to decide the application for confirmation by the highest bidder as also objections to the auction of 19.01.2015. Besides, it is inconceivable that under its order dated 29.11.2012 this Court could have intended or directed that in proceedings in the course of execution of recovery certificate issued by DRTM following adjudication of an application under Section 19 of the Act of 1993 in respect of a dispute covered under Section 17 of the Act of 1993, the Company Court could inter-meddle. Such a direction would be plainly contrary to the clear and categorical statement of law by the Apex court in the case of Canara Bank (Supra) wherein it was unequivocally elucidated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court M/s. Bhawani Stone Crushers Pvt. Ltd. as also the Commercial Taxes Department to their remedy of appeal under Section 30 of the Act of 1993 against the order dated 11.12.2015, passed by the Recovery Officer, DRTJ. In the facts of the case, the delay in filing the appeals for the period during which the objectors have been before this Court i.e. from the date of filing of applications for impleadment and counter application till the date of this order would stand excluded a la Section 14 of the Limitation Act. The appeals be filed within a period of two weeks from today. In the event of appeals being so filed and held to be within limitation or limitation being otherwise condoned under Section 5 of the Limitation Act, 1963, the Appellate Authority is directed to dispose them of within a period of three months of their presentation. The claim of the applicants-M/s. SPC Infrastructure Ltd. and Delhi Tax-Mac Traders to possession of the properties purchased at the auction of 19.01.2015 would abide the decision in the appeals. All applications stand disposed of accordingly. Taking into consideration that the applicants-M/s. Bhawani Stone Crushers Pvt. Ltd. and Akhilesh ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
