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TMI Blog2006 (3) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect thereof. In short, the sale was held to be fair, open and for adequate amount. 2. The review application was filed on 14.10.2004. The petitioner herein was the Managing Director of the Company which went on liquidation on account of the outstanding due worth Rs. 2,74,925/- on 24.9.2002. The petition was admitted on 12th August, 2002 and ultimately, a final order of winding up was passed on 24th September, 2002. 3. The case of petitioner is that he came to know about the winding up order only in the month of December, 2002 whereupon he filed an application for stay of the order passed which application was also dismissed on 16th December, 2002 by the learned Company Judge. The Official Liquidator took the possession of the assets of the Company and the assets were ordered to be evaluated by the learned Company Judge. The Punjab National Bank, respondent No. 3 herein, was the secured creditor. It enforced the sale of the assets of the company and by order dated 13th June, 2003, the learned Company Judge granted leave to the secured creditor, the Punjab National Bank, to obtain buyers for the tea estate on as is where is basis. The assets valued at Rs. 2,92,19,000/-. Ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the said company in liquidation. The further case of the petitioner is that after the proceedings were instituted by the Punjab National Bank before the Debt Recovery Tribunal, this Court had no further jurisdiction to proceed with the sale of the assets and properties of the company in liquidation. The further cause for review as pleaded by the petitioner is that the Division Bench did not consider the question concerning the jurisdiction of the learned Company Judge to pass the orders dated 31.10.2003 and 14.11.2003, that is of sale of the Company as also the acceptance of the part consideration of Rs. 31,00,000/- In that, the contention is that this Division Bench did not consider the decision in Allahabad Bank v. Canara Bank and Ors. [2000] 2 SCR 1102 Thus, the contention is that since the Supreme Court decision not having been considered by the Division Bench while disposing of the appeals, that amounts to an error apparent on the face of the record. 6. In support of his contention, the learned Counsel for the petitioner very heavily relies on the aforementioned decision and further suggests that there was no jurisdiction in the Company Judge to order for the sale and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the Supreme Court (1997) 8 SCC 715 (Parsion Devi and Ors. v. Sumitri Devi and Ors.) that a judgment may be open to review, inter alia, if there is a mistake or error apparent on the face of the record. An error which is not self-evident and has to be detected by a process of reasoning, can hardly be said to be an error apparent on the face of the record justifying the Court to exercise its power of review.... The Court further held that in exercise of the jurisdiction under Order 47 Rule 1 CPC it is not permissible for an erroneous decision to be reheard and corrected. There is a clear distinction between an erroneous decision and an error apparent on the face of the record. While the first can be corrected by the higher forum, the latter only can be corrected by exercise of the review jurisdiction. A review petition has a limited purpose and cannot be allowed to be an appeal in disguise. In this judgment, the Supreme Court has relied on Thungabhadra Industries Ltd. v. Govt. of A.P. [1964] 5 SCR 174 and more particularly, the observations made therein to the following effect: What, however, we are not concerned with is whether the statement in the order of September, 1959 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judgment by the earlier Division Bench dismissing the appeals against the confirmation of sale, was an error apparent on the face of the record. In order to buttress his contention that the non-consideration of the earlier Supreme Court judgment by itself becomes an error apparent on the face of the record, the learned Counsel drew our attention to AIR 1972 Mysore 44 (The Selection Committee for Admission to the Medical and Dental College, Bangalore v. M.P. Nagaraj) and (The Nalagarh Dehati Co-operative Transport Society Ltd., Nalagarh v. Beli Ram etc.) as also to AIR 1081 Raj 36 (State of Rajasthan v. Mehta Chetan Das Kishandass). It is true that in all the three cases mentioned above, the learned Judges have expressed that the failure to consider a contrary Supreme Court judgment would amount to an error apparent on the face of the record. In fact, in support of this proposition, the Mysore High Court in their judgment has relied on the decision in Thungabhadra Industries Ltd.'s case (supra) and has proceeded to hold that since under Article 141 of the Constitution of India, the law declared by the Court is binding on all the Courts where there is a decision of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment was never cited before the Division Bench. It could have been so cited only to raise the question of jurisdiction or rather the lack of it in the Company Court while dealing with the appeal against the confirmation of the sale of the company. We must at the outset point out that the jurisdiction objection was never raised before either the Single Judge or even before the Division Bench. We have closely examined the appeal memos. This appeal was against the orders dated 31st October, 2003 and 14th November, 2003 to which we have already made reference in the earlier part of the judgment. We have also seen those orders. However, this question of the jurisdiction was not raised while all other objections have been elaborately raised. All these objections were on the merits. In his application for review, the petitioner herein in paragraph 17 of the application suggests that during the course of the hearing of the aforementioned appeals, it transpired for the first time that the Punjab National Bank had instituted proceedings before the Debt Recovery Tribunal under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Now, therefore, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t revolves around the reasonableness of the price for which the company was sold and the manner in which the sale was conducted. The argument that because of the filing of the claim before the Debt Recovery Tribunal the Company Court had lost the jurisdiction would clearly be an additional point for getting the sale set aside, which was not raised at all. It is for this reason we say that there was no contrary judgment of the Supreme Court available which was ignored by the Bench while writing the judgment in question. We can understand a diametrically opposite view having been taken by the Division Bench against the available judgment of the Supreme Court but such is not the case here. Therefore, on this ground it is difficult to conclude that there was any error apparent on the face of the record in not noticing the judgment in Allahabad Bank's case (supra). We again reiterate and fall back on the judgment of the Supreme Court in Dokka Samuel (supra) and the clear observations made therein. 16. Now, we go to consider the third aspect as to whether the Allahabad Bank's judgment directly suggests the ouster of the jurisdiction of the Company Court or is it required to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execution pending before the recovery officer. 18. The Court had formulated six questions in paragraph 13 of the said judgment, out of which sub-paragraphs 1, 2 and 3 of paragraph 13 are relevant for our purposes. Those are as follows: (1) Whether in respect of proceedings under the RDB Act at the stage of adjudication for the money due to the banks or financial institutions and at the sage of execution for recovery of monies under the RDB Act, the Tribunal and the recovery officers are conferred exclusive jurisdiction in their respective spheres? (2) Whether for initiation of various proceedings by the banks and financial institutions under the RDB Act, leave of the Company Court is necessary under Section 537 before a winding-up order is passed against the company or before provisional liquidator is appointed under Section 446(1) and whether the Company Court can pass orders of stay of proceedings before the Tribunal, in exercise of powers under Section 442? (3) Whether after a winding-up order is passed under Section 446(1) of the Companies Act or a provisional liquidator is appointed, whether the Company Court can stay proceedings under the RDB Act, transfer them to itself and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in respect of the tea estate on 'as is where is' basis. Therefore, it is obvious that before filing a claim against the company the secured creditor, Punjab National Bank itself had enforced its claim before the Company Court. Ultimately, the Bank which had secured the purchaser for the company became successful in ultimately getting the company sold which sale was accepted by the learned Single Judge by an order dated 31st October, 2003. Therefore, obviously the secured creditor did not have any objection regarding the jurisdiction of the Company Court to proceed with the sale. This position is in sharp contradistinction with the facts in Allahabad Bank's case where there were rival claims in between Allahabad Bank which had obtained the decree from DRT and Canara Bank which was a secured creditor of the wound up company. Under this factual scenario, the Supreme Court held that the Company Court could not have stayed and interfered with the proceedings pending before the DRT and/or the proceedings pending before the recovery officer. 21. The contention raised by the learned Counsel is that the mere filing of the claim by the Punjab National Bank before the Debt Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, in exercise of powers under Section 442. Even if the answer to this question is in negative, this does not apply to the facts of the present case where practically everything was over before the claim was filed by Punjab National Bank before the Debt Recovery Tribunal. Even as regards the question No. 3, all that the Supreme Court had held that after a winding up order is passed under Section 446(1) of the Companies Act or a provisional liquidator is appointed, the Company Court can not stay proceedings under the RDB Act, transfer them to itself and decide the question of liability, execution and priority. 24. What the learned Counsel says is that in this case the Court could not have sold the company because it would amount to an execution proceeding. We do not think so. What the Supreme Court has prevented is that when the execution proceeding is pending before the recovery officer. Company Courts cannot step in either to stay the proceeding or transfer the proceeding to itself. Such is not the case here. In the present case, there was no adjudication also on the claim raised by Punjab National Bank before the Debt Recovery Tribunal. The execution contemplated by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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