STATE BANK OF INDIA Vs. OFFICIAL LIQUIDATOR OF ..

JUDGEMENT

(1.) The applicant is before this Court seeking a clarification with regard to the applicability of the provision contained in Section 446 of the Companies Act and in that light, to consider as to whether this Court would grant leave to the applicant to proceed to recover the amount due to the applicant from the respondent-Company.

(2.) The applicant being a consortium of banks having provided financial assistance to the respondent-company, had initiated the proceedings in O.A.No.766/2013 under the Recovery Of Debts due to the Banks and Financial Institution Act, 1993 before the Debt Recovery Tribunal at Bengaluru. The Debt Recovery Tribunal, through its Judgment dated 19.01.2017, has formed a prima facie opinion that the provisions contained in Section 446 of the Companies Act would not be an impediment to consider the matter and has ultimately, decided the proceedings in favour of the applicants-Banks. However, an observation has been made that if need be, appropriate leave be obtained from this Court. It is in that light, the applicant having obtained the recovery certificate through the Judgment dated 19.01.2017, are before this Court seeking leave to proceed further in the matter to initiate the recovery proceedings.

(3.) Having heard the learned counsel for the applicants and the official liquidator, it is clear that in so far as the recovery proceedings to be initiated by the applicants against the respondent-Company, the official liquidator has no objection to the same. Further, what is to be kept in view is that in view of the liquidation proceedings to be undertaken by the official liquidator in respect of the respondent-Company, the recoveries as made from the assets of the respondent-Company would also be an aspect to be kept in view so as to ultimately consider the preferential claims, if any, as provided under the Companies Act . Therefore, though leave is granted to the applicants to proceed further in the matter pursuant to the recovery certificate issued in O.A.No.766/2013 dated 19.01.2017, the applicants shall keep the official liquidator informed of the steps taken in the recovery proceedings and if the properties belonging to the respondent-Company are brought to sale in the said proceedings, the nature and extent of the recoveries made and before appropriation of the said amount, the same shall be brought to the notice of the official liquidator so that at that stage, the consideration if need be with regard to the preferential claim if any be brought before this Court by the official liquidator.