TMI Blog2006 (3) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ( the Act ). 2. The petitioner-company was ordered to be wound up by this court vide order dated 16-12-1999. The official liquidator attached to this court was appointed as its liquidator. In compliance thereof, the official liquidator took possession of the factory premises of the company in liquidation situated at village Bhankpur, Tehsil Gannaur, District Sonepat on 7-1-2000. 3. Respondent No. 1, Industrial Finance Corporation of India Ltd., filed an original application before the Debts Recovery Tribunal constituted under the Act for recovery of Rs. 30,32,19,553 along with pendante lite and future interest against AVI Packaging (India) Ltd. The company in liquidation was impleaded as defendant No. 6, as guarantor. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Tribunal, Jaipur, on 16-2-2000, and it was transferred to the Debts Recovery Tribunal, Chandigarh, on the establishment of the Tribunal at Chandigarh. The original application was decided in favour of the said respondent on 29-4-2003. It is pointed out that the factum of winding-up was not known to the said respondent. Neither the official liquidator nor the management of the company apprised the said respondent about the factum of winding-up. It is further mentioned that a local Commissioner was appointed by the Debts Recovery Tribunal, Chandigarh, to inspect the site in June, 2004. Even in the report so submitted by the local Commissioner, it has not been pointed out that the company was under liquidation. It is pointed out that an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act, 1956 ( Companies Act ). 7. Learned counsel for the petitioner has relied upon a recent judgment of the Hon ble Supreme Court in Rajasthan Financial Corpn. v. Official Liquidator [2005] l28 Comp. Cas. 387 1 , to contend that where the company is in the process of winding-up, sections 529 and 529A of the Companies Act get attracted and that there is a preferential payment provided for workmen s dues and debts due to the secured creditors. Since the official liquidator represents the entire body of creditors and also holds a right on behalf of the workers to have a distribution pari passu with the secured creditors and the duty for further distribution of the proceeds on the basis of the preferences contained in section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Companies Act, 1956, and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely, section 34. A similar situation arose in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. [1993] 78 Comp. Cas. 803 (SC); [1993] 2 SCC 144, where there was inconsistency between two special laws, the State Financial Corporations Act, 1951 and the Sick Industrial Companies (Special Provisions) Act, 1985. The latter contained section 32 which gave overriding effect to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the former. This position holds good during the pendency of the winding-up petition against the debtor company and also after a winding-up order is passed. No leave of the company court is necessary for initiating or continuing the proceedings under the RDB Act, 1993." (p. 83) 9. In Rajasthan Financial Corporation s case ( supra ) while considering the judgment rendered by the Supreme Court in Allahabad Bank s case ( supra ) it was found that the said judgment is not applicable in respect of the claim of the financial corporation under the State Financial Corporations Act since section 529A of the Companies Act was introduced by Act No. 35 of 1985 and the overriding provisions therein will prevail over the State Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 529A of the Companies Act. Since the said provision of the Companies Act is subsequent legislation, it was held that the latter statute will prevail over the earlier Act. 11. However, the official liquidator has a right to determine the dues of the workmen as provided under section 529A of the Companies Act. Therefore, as and when the official liquidator determines the dues, if any, payable to the workmen, it shall have a right to seek apportionment of the sale proceeds of the assets of the company from respondent No. 1. 12. Thus, it is held that the financial institution possesses right to sell the property in terms of the provisions of the Act, thus, the issuance of the sale certificate on 9-2-2005, after its confirmation by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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