TMI Blog2015 (3) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in the case of Allahabad Bank vs. Canara Bank (Supra), laying down that in case of a conflict between the Companies Act, 1956 and the RDB Act, 1993 the provisions of the latter special Act shall override the previous general Act, has no manner of application in this case.], laying down that in case of a conflict between the Companies Act, 1956 and the RDB Act, 1993 the provisions of the latter special Act shall override the previous general Act, has no manner of application in this case. We are also supported in our view by a judgment of the Supreme Court in the case of Haryana Telecom Ltd. [1999 (7) TMI 545 - SUPREME COURT OF INDIA]. The Supreme Court held that arbitrator having no such power could not have entertained the petition and, therefore, the application made to the High Court for referring the matter to arbitration was misconceived. In our considered view, the principle laid down in the said judgment of the Supreme Court with regard to the exclusive power of company court to wind up a company squarely applies to the instant case before us. The Debt Recovery Tribunal not having been invested with the power to wind up a company, it would not be poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle Judge of this Court held, although the secured creditor was entitled to maintain an application for winding up of its debtor Company under the Companies Act, 1956 the Court had a discretion not to admit the winding up application, if the security of the secured creditor was efficacious and adequate. The second ground of challenge urged by Mr. Banerjee touches the jurisdiction of the Company Court to deal with a winding up application filed by a bank or non-banking financial institution having a remedy to take recourse before the Debt Recovery Tribunal for realization of debts. According to Mr. Banerjee, in view of express provision contained in Section 17 of the Recovery of Debts due to Bank and Financial Institution Act, 1993 (hereinafter referred to as the RDB Act) it is the Debt Recovery Tribunal that has exclusive jurisdiction to entertain, try and adjudicate all claims of any bank or financial institution against its borrower, including the borrower Company bank and as such the Company Court does not have the jurisdiction to entertain any winding up application of any bank or financial institution. In support of such contention, Mr. Banerjee placed reliance on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Industries Ltd reported in [2012] 175 Comp Cas 71 (Cal). Mr. Banerjee argued, since in the instant case the respondent/petitioning creditor held the security provided by the company, the learned Single Judge committed an error in admitting the winding up application. However, as already noted, Mr. Banerjee could not dispute the finding of the learned Single Judge that a sum of ₹ 7,00,29,142/- was due and payable by the appellant company to the respondent/petitioning creditor on account of principal or that the securities held by the respondent were not efficacious. In any event, from the said order dated September 1, 2014 passed by the Supreme Court, we find that the said order dated February 13, 2013 passed by the Division Bench of this Court in the case reported in [2013] 177 Comp. Cas 15 (Cal) holding that all secured creditors can file winding up application against its debtor company and obtain order of admission of such application, has not been interfered with and as such we have no scope to hold anything contrary to the said earlier Division Bench decision. Thus, the counsel for the respondent/creditor was not called upon to make any submission on this issue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt company is selling its immovable properties. Thus, according to Mrs. Venugopal, the appellant company is about to become commercially insolvent. Copies of the said documents were also made over to the appellants. Mr. Banerjee, in his usual fairness, did not dispute the said documents. In support of her contention, Mrs. Venugopal relied on a decision of the Division Bench of Punjab and Haryana High Court in the case of Aar kay Concast Ltd. Vs. Reliance Capital Ltd. reported in [2011] 164 Comp. Cas 409 (P H), where it was held that there is no bar of the proceeding for winding up being initiated, merely on account of pendency of proceeding against the company before Debts Recovery Tribunal. In order to appreciate the second contention of the appellant company, about lack of jurisdiction of the company court to entertain any winding up application by a bank or non banking financial corporation against a debtor company due to enactment of the RDB Act, we first consider the object of the said RDB Act which is as follows: An Act to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context, Section 18 of the RDB Act 1993 bars the jurisdiction of all courts and authorities to exercise jurisdiction for recovery of debts of the banks and financial institutions. It is the well settled principle of law that proceedings for winding up under Sections 433 and 434 of the Companies Act, 1956 is not a proceeding for recovery of debts of the creditors or the Company sought to be wound up. It is a proceeding to wind up a company which has lost its commercial solvency or substratum. A decision of a Court is an authority for what it decides and not that everything said therein constitutes a precedent. The Courts are obliged to employ an intelligent technique in the use of precedents bearing in mind that a decision of the Court takes it colour from the questions involved in the case in which it was rendered. In this regard we are fortified by the decisions of the Supreme Court in the case CIT vs. Sun Engg. Works (P) Ltd. reported in (1992) 4 SCC 363 (para 39) and State of Punjab Vs. Baddev Sing reported in (1999) 6 SCC 172 (para 43) In the said decision of Allahabad Bank Vs. Canara Bank , the Supreme Court was dealing with a case where the company court, before whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter to arbitration. The learned Single Judge of the High Court rejected the said contention of the company; so did the Division Bench of the High Court. When the matter went before the Supreme Court, in paragraph 5 of the said decision, the Supreme Court pointed out: The claim in a petition filed under for winding up is not for money. The petition filed under the Companies Act would be to the effect, in a matter like this, that the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under the Companies Act and is conferred on the court. The Supreme Court held that arbitrator having no such power could not have entertained the petition and, therefore, the application made to the High Court for referring the matter to arbitration was misconceived. In our considered view, the principle laid down in the said judgment of the Supreme Court with regard to the exclusive power of company court to wind up a company squarely applies to the instant case before us. The Debt Recovery Tribunal not having been invested with the power to wind up a company, it would not be possible to urge befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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