IFCI LTD. Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) A common question of law as to the jurisdiction of a Company Court in respect of execution of a recovery certificate issued by the Debt Recovery Tribunal under Sec. 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter "the Act of 1993 ") arises in all the applications/cross-objections/counter applications filed on similar underlying facts. Hence all the applications are being disposed of by this common order.

(2.) M/s. Thar Cement Ltd. was wound up by the order of this Court passed on 21.11.2008 in Company Petition No. 23/2006. Prior thereto the Official Liquidator was appointed as provisional liquidator vide order dated 05.02.2007 in pursuance whereto he took possession of the moveable and immovable assets of the company aforesaid in winding up. It appears that IFCI Ltd., the secured creditor of the company, seeking to recover its unpaid secured loan advanced to the company had earlier approached the Debt Recovery Tribunal, Mumbai (hereinafter "DRTM ") prior to the company's liquidation, filing an application under Sec. 19 of the Act of 1993. A recovery certificate thereupon came to be issued in its favour on 08.07.2004. The said recovery certificate was transferred for execution to the DRT at Jaipur ( "DRTJ ") as the properties of the judgment debtor company are situate in Rajasthan.

(3.) As the properties were in possession of the Company Court through the Official Liquidator under the Company Court's order dated 05.02.2007, Application No. 38/2012 came to be filed before the Company Court at the instance of the secured creditor-IFCI Ltd. under Rule 9 of the Company (Courts) Rules, 1959 (hereinafter "the Rules of 1959 ") seeking permission to stay outside winding up and sell the judgment debtor company's mortgaged properties in terms of the recovery certificate dated 08.07.2004 issued by DRTM. The Official Liquidator did not oppose the application for permission to IFCI Ltd. to stay outside winding up proceedings and sell the properties mortgaged with it provided the applicant-IFCI Ltd. fulfilled various conditions. Of primary relevance, to the adjudication of the application under consideration, were conditions set up by the Official Liquidator that the sale by the secured creditor-IFCI Ltd. in pursuance to the permission of the Company Court be subject to the confirmation and supervision of the court; that the sale proceeds received from the sale of the mortgaged property be deposited with the Official Liquidator; and further that the secured creditor-IFCI Ltd. then file its claim along with others, before the Official Liquidator for adjudication/disbursement in accordance with law. On consideration of the matter, the Company Court vide its order dated 29.11.2012 while granting permission sought directed that the auction sale would be confirmed after seeking its permission and that the sale proceeds be deposited with the Official Liquidator. Disbursement was then to be done by the Official Liquidator in accordance with Sections 529 & 529-A of the Companies Act, 1956 (hereinafter "the Act of 1956 ") ".