TMI Blog2005 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... of the finding recorded in the order, it was open to the State Bank-respondent to proceed to sell the secured asset of 18 acres and 20 gunthas of land as advertised by it after complying with and furnishing undertaking to the Official Liquidator as required by Section 529 and 529A of the Companies Act. It was further made dear that, respondent-State Bank of India is not entitled to sell the movables mentioned by it in the advertisement or otherwise under Securitisation Act as the same is in the custody of Official Liquidator. To that extent partly allowed Company Application No. 83/2004 and Company Application No. 9/2004. In view of this finding, the Court held that, it was not necessary to pass any orders in Company Application No. 57/2001 filed by the State Bank of India seeking leave to remain outside the winding up proceeding and the said application was also rejected. Hence, the present appeal as filed by the Company through the Official Liquidator. 2. A few facts may now be set out as under :- By order dated 28.11.2000 B.I.F.R. recommended winding up of the Company. Petition for winding up was presented on 8.6.2001, and it was admitted on 24.8.2001. On 17.9.2001 State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent thereafter issued advertisement on 12.10.2004 for the sale of property. Before that notice under Section 13(2) was issued by the Respondent on 8.1.2004 under the Securitisation Act. Notice under Section 13(4) was issued on 22.4.2004. Another advertisement issued on 11.11.2004 was stayed by an order in Company Application No. 91./2004. On 13.12.2004 appellant filed Company Application No. 97/2004 for recall the order dated 17.10.2003 which was granted ex-parte and by which permission was granted to the respondent to proceed under the Securitisation Act. By an order dated 4.5.2005 in the application No. 97/2004, 83/2004 and 91.2004 the Company Court was pleased to allow the respondent to sell the property. Appellant preferred Review Application No. 55/2005 on 9.6.2005 and the same was rejected on 13.6.2005. 3. One of the contentions as urged on behalf of appellant is that the property which was put up for sale a substantial part of it has not been mortgaged in favour of the respondent and as such the same could not have been sold under the provisions of Securitisation Act. At this stage it may be pointed out that, it is the case of the Respondent-Bank that equitable mortgage o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll prevail till the Company is ordered to be wound up. After the winding up order it is not open to a secured creditor to proceed under the provisions of the Securitisation act. ii) The properties that can be sold under the Securitisation Act are only secured properties. In other words, if me charge is registered under Section 125 of the Indian Companies Act. In the instant case, there is no charge registered in respect of the second mortgage. In so for as the purported mortgage created on 21.8.1991 at the highest it is an agreement to mortgage, and at any rate not being registered is void as against the liquidator and as such it was not open to the respondent to sell the property under the provisions of the Securitisation Act. 5. In so far as the first issue is concerned, we may gainfully refer to the judgment of the Apex Court in the case of Allahabad Bank v. Canara Bank and Anr., A.I.R. 2000 SC 1535, where a similar issue came up for consideration. The issue was the provisions of the Companies Act and the R.D.B. Act The point which arose was, if there be two legislations, both Central Acts, which would prevail. The provisions of the two Acts were then considered, and vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usive jurisdiction even after winding up order is passed. The only question is whether the position is the same under the provisions of the Securitisation Act. We may consider some provisions of the Securitisation Act Section 34 reads as under :- No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions act, 1993 (51 of 1993) . Section 35 reads as under :- The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law . Similarly, Section 37 of the Securitisation Act needs to be reproduced and reads as under :- The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel drew our attention to the observations of the Apex Court in State Bank of Hyderabad v. Pennar Paterson Ltd. and Anr., 2003, Vol. 114, Company Cases, 66, where the Apex Court has observed that Allahabad Bank may have to be re-examined in so far as jurisdiction of the Company Court and Tribunal under R.D.B. Act The Apex Court, however, chose not to answer the issue and considering the law as it stands it is immaterial at what stage the official liquidator is appointed. If that be the position, we have no doubt in our mind that, considering the provisions of the Securitisation Act, and the provisions of the Companies Act, the provisions of the Securitisation Act will prevail and no leave of the Company Court is required either before winding up or after winding up for selling the secured assets. The respondent, therefore, even if had preferred an application for leave or moved under the provisions of the Securitisation Act, that really was not required. No leave was also required under the provisions of the R.D.B. Act. It was open to the respondent to initiate proceedings before the Tribunal tinder the Debts Recovery Act or for realisation of the security under the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unregistered charge, the section would not apply. It is not necessary to refer to the other propositions set out in the judgment In the instant case the respondent-Bank has produced before us the documents which have been filed before the Debts Recovery Tribunal including the letter of September, 18, 1991, forwarded to the Registrar of Company to register company's charge on me assets of the company This was in respect of 18 acres 20 gunthas which is the subject matter of the present dispute. It is, therefore, clear that, the necessary forms with all particulars had been forwarded by the Company to the Registrar for registration. The act of registration itself is a formal requirement. The order of the Tribunal would also indicate that, the contention of the respondent that the credit limits are secured by equitable mortgage created on 4.5.1990 for 11 acres and 11 gunthas and the subsequent equitable mortgage created on 21.8.1991 for the additional 7 acres 9 gunthas was accepted and the learned Tribunal proceeded on basis that the entire land had been mortgaged. The Tribunal therefore, proceeded on the footing that, there was a valid charge created in favour of the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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