PRISMA HOME APPLIANCES P. LTD. Vs. INDIAN BANK

JUDGEMENT

(1.) THIS is an application filed by the official liquidator on behalf of the company under liquidation seeking to declare that the action of the respondent -recovery officer of the creditor -bank in effecting the sale of the assets of the company under liquidation without any notice and without obtaining permission of the company court, as the company in question was ordered to be wound up by an order dated July 13, 1999, made in Company Petition No. 81 of 1996, as void and contrary to the statutory provisions as well as the decision of the Supreme Court in Rajasthan Financial Corporation v. : AIR2006SC755 .

(2.) IT is the case of the official liquidator that the company is ordered to be wound up as early as on July 13, 1999. As a result of the order of winding up, the assets of the company under liquidation would vest in the company court and the official liquidator. But, however, the respondent -bank filed O.A. No. 1447 of 1999 before the Debts Recovery Tribunal and obtained a decree, and later obtained a certificate of debt and proceeded to recover the said debt by resorting to the sale of the assets of the company, but before effecting the sale, neither the creditor -bank nor the sale officer has given any notice to the official liquidator. It is also the case of the official liquidator that even as per the provisions, the sale officer has to conduct the sale in accordance with the procedure provided under Schedule II of the Income Tax Act, 1961. As per Rule 31 of the said Schedule, where the property to be attached is in the custody of a court, or public officer, the attachment shall be made by a notice to such court or officer, requesting that such property or any interest or dividend becoming payable thereon, may be held subject to the further orders of the Tax Recovery Officer by whom the notice is issued.

(3.) A counter is filed on behalf of the respondent -bank stating that the bank filed O.A. No. 1447 of 1999 and obtained a decree as well as recovery certificate for a sum of Rs. 4,04,23,607 on January 19, 2003. Thereafter, the bank effected the sale of the assets. It was stated that the proceedings under the provisions of the Debts Recovery Tribunal are not subject to the proceedings of any court, except the jurisdiction of the Supreme Court and the High Court exercising jurisdiction under Articles 226 and 227 of the Constitution of India. It is also the case of the respondent -bank that the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, overrides the provisions of any other Act by virtue of Section 34 of the said Act. Therefore, this Court has no jurisdiction to interfere with the sale that was affected. The respondent also relied upon a judgment of the Supreme Court in Allahabad Bank v. : [2000]2SCR1102 wherein it was held that the execution of the certificate of recovery is within the jurisdiction of the Debts Recovery Tribunal and the recovery officer. Therefore, the application is devoid of merit.