9911796707
TMI Blog2008 (3) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... t pointing out the excess amount paid, if any, to the Central Bank of India and GSFC. The relevant facts for consideration of the issue involved in the present report are that by an order dated September 1,1992, passed by this court in Company Petition No. 85 of 1991, the company, namely, M/s. Gujarat Ministeel Ltd., was ordered to be wound up and the official liquidator attached to this court was appointed as its liquidator with all usual powers under the provisions of the Companies Act, 1956. The official liquidator has thereafter taken charge of the assets and properties of the company. The sale of the assets and properties of the company was confirmed in favour of M/s. Cincinnati Microns Ltd., for a purchaser consideration of Rs. 5.25 crores by this court vide order dated August 11,1997, in O.L.R. No. 82 of 1997. The official liquidator has appointed one M/s. Pankaj R. Shah, chartered accountant for the purpose of verification of claims submitted by the secured creditors of the company, namely, the Central Bank of India, GSFC and GIIC and the said chartered accountant vide his report dated January 16, 2000, submitted verification report which is as under : Sl No. . Name of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o stated in his report that by an order dated July 29, 2003, passed in Company Application No. 87 of 1999, the official liquidator was directed to take steps to recover the excess payment made to respondent No. 1, i.e., the Central Bank of India and GSFC. The official liquidator has observed in his report that the total amount of Rs. 2,87,81,223 was payable to the secured creditors as per the report of the chartered accountant. As against this, the amount paid to the secured creditors was to the tune of Rs. 3,30,10,860. Thus, an excess amount paid to the secured creditors of the company by the official liquidator under various orders and directions of this court are recoverable from them and the amount recoverable is as under: SI. No. Name of organisation Amount found Recoverable (Rs.) 1. Central Bank of India 1,21,94,023 2. GSFC 31,04,574 3. GIIC 8,28,324 Total 1,61,26,921 The official liquidator has further stated in his report that GSFC has submitted a sum of Rs. 24,25,368 to him. So far as the Central Bank is concerned, the said bank has filed civil suit before the City Civil Court, Ahmedabad, for recovery of its dues which was later on transferred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication and permitted the bank to recover its dues against the company in liquidation. It is further stated in the said affidavit that the recovery officer of the Debts Recovery Tribunal initiated recovery proceedings being R. P. No. 268 against the company in liquidation and other answerable parties. In the above premises, the recovery officer of the Debts Recovery Tribunal passed an order dated March 12, 2001 and directed the official liquidator to release forthwith an amount of Rs. 60 lakhs to the certificate holder bank on ad hoc basis subject to final settlement out of the sale proceeds lying in the custody and the said order has been complied with by the official liquidator. It is further stated in the reply affidavit that the bank has received aggregate sum of Rs. 3,31,32/274 from the official liquidator towards recovery and repayment of its decretal dues. After adjusting the recovery of this amount received from the official liquidator and after giving its due credit on respective dates of receipt, the bank has still to recover an amount of Rs. 30,93,11/757.04 from the company in liquidation. The bank is a secured creditor and has opted and remained outside winding up al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Debts Recovery Tribunal, since suit was for the composite loan amount, outstanding figure mentioned is of Rs. 1,80,50,991 and the order of the Tribunal is ex-parte order and though, the official liquidator had appeared, it has been mentioned that the defendant has not appeared. Even if the Debts Recovery Tribunal's order as it stands is accepted then also it is not in dispute that the amount paid is of Rs. 3,31,02,715. The court, therefore, has prima facie come to the conclusion that the amount has been paid in excess and hence the court has passed an interim order directing the bank to return the amount of Rs. 2,30,00,000 with interest at the rate of 10 per cent, per annum to the official liquidator within one month from the date of the said order. The above order of the learned single judge was challenged in appeal 17 before the Division Bench of this court in O. J. Appeal No. 246 of 2007 with Civil Application No. 412 of 2007. While admitting the appeal and passing an order in civil application on November 19, 2007, the Division Bench has granted ad interim stay with the clarification that there is no stay against the proceeding for verification/adjudication of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability of the defendant and then it has to issue a certificate under section 19(22). Under section 18, the jurisdiction of any other court or authority which would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon the liability is exclusively vested in the Tribunal. The court further observed that even in regard to "execution", the jurisdiction of the recovery officer is exclusive. It is not the intendment of the Act that while the basic liability of the defendant-company is to be decided by the Tribunal under section 17, the banks/financial institutions should go to the civil court or the company court or some other authority outside the Act for the actual realisation of the amount. The certificate granted under section 19(22) has to be executed only by the Recovery Officer. No dual jurisdictions at different stages are contemplated. Further, section 34 of the Act clearly stated that RDB Act overrides the other laws to the extent of "inconsistency''. Obviously, the prescription of an exclusive Tribunal both for adjudication and execution is a procedure clearly inconsistent with realisation of these debts in any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though there is a surplus, the secured creditors covered under section 529A would not be entitled to interest in excess of 4 per cent. Here in the present case, since respondent No. 1 bank has obtained the decree in its favour with interest at the rate higher than 4 per cent, it would be entitled to realise the said interest from the surplus amount. He has, therefore, submitted that the official liquidator is bound to honour the decree of the civil court obtained by the bank and pay the interest as ordered in the decree. Contributories and other shareholders would be entitled to the rest of the amount after the decree was so satisfied. As against this, Mr. J.S. Yadav, learned advocate appearing for the official liquidator has submitted that as per the undertaking given by respondent No. 1 bank before this court, the excess amount paid should have been returned to the official liquidator. He has further submitted that respondent No. 1 bank is not entitled to receive the decreetal amount and in any case it cannot claim any interest after the date of winding up order. Even as per rule 179 of the Companies (Court) Rules, respondent No. 1 bank is entitled to interest at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 529 and 529A of the Companies Act in the matter of distribution among the creditors. The right to sell under the State Financial Corporations Act or under the Recovery of Debts Act by a creditor coming within those Acts and standing outside the winding up, is different from the distribution of the proceeds of the sale of the security. The distribution in a case where the debtor is a company in the process of being wound up can only be in terms of section 529A read with section 529 of the Companies Act. After all, the 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 530 of the Companies Act under the directions of the company court. In other words, the distribution of the sale proceeds under the direction 24 of the company court is his responsibility. To ensure the proper working out of the scheme of distribution, it is necessary to associate the official liquidator with the process of sale so that he can ensure, in the light of the directions of the company court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper forum for challenging the decree is the Debts Recovery Appellate Tribunal and unless and until that decree is reversed by the Appellate Tribunal this court cannot take the view that the decree was passed without any adjudication and once the claim has been adjudicated and there is surplus fund, respondent No. 1 bank is entitled to get the decreetal amount with interest from the surplus amount. Once the adjudication is done by the Debts Recovery Tribunal, there is no question of another adjudication by this court. The decree passed by the Debts Recovery Tribunal is not under challenge before this court and hence, it is not proper for this court to go beyond that decree and pass any order contrary to it during its subsistence. The court, therefore, at this stage does not issue any direction to respondent No. 1 bank to refund the excess amount. It is, however, open for the official liquidator to approach the Debts Recovery Appellate Tribunal challenging the decree in question and if the decree is set aside, it is open for the official liquidator to file further report before the court seeking appropriate direction for refund of the excess amount paid to respondent No. 1 bank. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
