SARVADAMAN M DOSHI Vs. RECOVERY OFFICER

JUDGEMENT

(1.) THE Petitioners challenge in these proceedings the orders passed by the Recovery Officer confirming the sale of plant and machinery in execution of a recovery certificate and orders passed by the Debts Recovery Tribunal and by the Appellate Tribunal in appeal. A direction has inter alia been sought from this Court, calling upon the Bank and the purchaser to pay a sum of Rs.20 crores by way of damages.

(2.) THE Bank of India (the Fifth Respondent) instituted proceedings for the recovery of its dues against a Company by the name of Mansukh Industries Ltd. The Company was ordered to be wound up by an order dated 20th December 1999 and the Official Liquidator took possession of the properties on 18th January 2001. The Liquidator was impleaded to the proceedings before the Debts Recovery Tribunal. On 9th May 2001, the application filed by the Bank was allowed in the sum of Rs. 13,31,71,362.00 together with interest at the rate of 18% per annum from the date of the institution of the suit until realisation. The Tribunal held that the Bank was entitled to execute the decree by the sale of movable and immovable assets. According to the Bank, it held a valid charge, which was registered with the Registrar of Companies in 1994.

(3.) IN view of the provisions of law that hold the field, the remedy which is available to the Petitioners is to institute a suit for challenging the sale of the plant and machinery. The Petitioners will have to be relegated to the said remedy. Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 stipulates that the provisions of the Second and Third Schedules to the Income Tax Act, 1961 and the Income Tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and Rules referred to the amount of debt due under the Act instead of to the Income Tax. The Rules contained in the Second Schedule to the Income Tax Act, 1961 inter alia provide for the institution of a suit under Rule 11(6) for the establishment of a right which the objector claims to the property in dispute where a claim or an objection has been preferred to the Tax Recovery Officer and an order has been passed against the objector. Rule 45 provides for the institution of a suit for the recovery of compensation or of specific property in the event of an irregularity in publishing or conducting a sale where a substantial injury has been caused. Rule 45 provides as follows: