DEEPAK COCHHAR Vs. INDUSIND BANK LTD

JUDGEMENT

(1.) The present notice of motion no. 251 of 2004 has been taken out by the judgment debtor inter alia seeking relief that Insolvency Notice No. N/72 of 2004 dated 21.4.2004 taken out by the judgment creditor be set aside. Some of the material facts of the present case, briefly stated, are as under :-

(2.) Pursuant to an application made by the judgment creditor which is a bank to the Debt Recovery Tribunal being O.A. No. 811/2000, the Debt Recovery Tribunal has passed an order and judgment dated 8.1.2003 inter alia holding that the judgment debtor is liable to make payment to the judgment creditor of a sum of Rs. 3,30,11,926 along with further interest at the rate of 15% per annum. On 3.3.2003 a recovery certificate was issued by the Debt Recovery Tribunal on the basis of the order and judgment dated 8.1.2003. The judgment creditor has on the basis of the said order and judgment of the Debt Recovery Tribunal and consequent recovery certificate issued to them made an application to this Court under Section 9 of the Presidency-Towns Insolvency Act, 1909 (hereinafter referred to as "the Insolvency Act") on the ground that by virtue of non-payment of the amount awarded by the Debt Recovery Tribunal by an order and judgment dated 8.1.2003 the debtor has committed an act of insolvency. The said application has been made in accordance with the provisions of sub-section (2) of Section 9 of the Insolvency Act. Pursuant to the said application, the Insolvency Registrar has issued an insolvency notice on 8.10.2004. On 9.10.2004 the said notice is duly served on the judgment debtor. On 13.12.2004 the present application has been initiated by the judgment debtor for setting aside the insolvency notice.

(3.) In support of the application for setting aside the insolvency notice it has been contended that issuance of the notice is bad in law in as much as the Court has no power to issue insolvency notice under section 9(2) of the Insolvency Act on the basis of the recovery certificate issued by the Debt Recovery Tribunal. It has been also contended in the affidavit in support of the motion that the jurisdiction of the Debt Recovery Tribunal is exclusive. The execution of the recovery certificate can be made only under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the "RDDB Act"). It has been also contended that there is no provision under the Insolvency Act to issue an insolvency notice on the basis of a recovery certificate issued under the provisions of the RDDB Act. It has also been contended that what is issued by the Debt Recovery Tribunal is only a recovery certificate and the same can not amount to order or decree as contemplated under the provisions of section 9(2) of the Insolvency Act.