TMI Blog2001 (4) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisional liquidator has taken custody of the assets of the company after preparing an inventory in the presence of the secured creditors. While so, the State Bank of Hyderabad and other banking companies who also claim to be secured creditors moved an application--O.A. No. 286 of 2000--before the Debt Recovery Tribunal wherein an application to appoint an Advocate-Commissioner to take possession of the assets of the company has also been made whereupon Mr. S. Ravikanth, Advocate has been appointed as Commissioner. Thereupon the Advocate-Commissioner requested the Official Liquidator through a letter to be present before him on the specified day. However, the Official Liquidator could not be present before him for want of communication of the aforementioned letter whereupon the Advocate-Commissioner filed a memo before the Debt Recovery Tribunal and pursuant thereto the Debt Recovery Tribunal passed the following order : In view of the above provision of law this Tribunal can appoint a Commissioner for making an inventory of the properties of the defendant or for the sale thereof where it appears to it to be just and convenient. In the present case, the Commissioner was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany Court, in such a case whether it would be legal or proper having regard to the scheme of both the Companies Act and the Act for the Tribunal constituted under the later enactment to deal with the property that is under the control of the Company Court which happens to be the High Court, without obtaining the leave of the Company Court, is a matter, in my view, which is not dealt with and decided by Their Lordships in the above cited case in Allahabad Bank (supra). Having regard to the far reaching consequences such the one with which this Court is confronted in the present case, and having regard to the hierarchy of the judicial system in this country, where the 2nd respondent-Tribunal is undoubtedly a subordinate Tribunal contemplated under Article 227 of the Constitution, the said aspect is required to be decided authoritatively by a Bench of appropriate strength, more particularly when by virtue of the declaration under Section 10 of the Companies Act, the Court having jurisdiction under the Companies Act is the High Court but not an individual Judge of the High Court. It is a different matter that for the reasons of administrative convenience and by virtue of the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operties of the defendant; 8. Other modes of recovery have been provided for in Section 28, Sub-section (5) whereof reads thus : The recovery officer may recover any amount of debt due from the defendant by distraint and sale of his movable property in the manner laid down in the Third Schedule to the Income Tax Act, 1961 (43 of 1961). 9. Sections 19(2), 19(18)(e) and 19(19) of the Act read thus : Where a Bank or a Financial Institution, which has to recover its debt from any person, has filed an application to the Tribunal under Sub-section (1) and against the same person another Bank or Financial Institution also has a claim to recover its debt, then, the later Bank or Financial Institution may join the applicant Bank or Financial Institution at any stage of the proceedings, before the final order is passed, by making an application to that Tribunal. Where it appears to the Tribunal to be just and convenient, the Tribunal may, by order- (e) appoint a Commissioner for preparation of an inventory of the properties of the defendant or for the sale thereof. Where a certificate of recovery is issued against a company registered under the Companies Act, 1956, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on winding up order.--(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with against the company, except by leave of the Court and subject to such terms as the Court may impose. (2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of- (a) any suit or proceeding by or against the company; (b) any claim made by or against the company (including claims by or against any of its branches in India); (c) any application made under Section 391 by or in respect of the company; (d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company; whether such suit or proceeding has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession thereof, and the Chief Presidency Magistrate or the District Magistrate may thereupon after such notice as he may think fit to give to any party, take possession of such property, effects, actionable claims, books of account or other documents and deliver possession thereof to the liquidator or the provisional liquidator. (1B) For the purpose of securing compliance with the provisions of Sub-section (1A), the Chief Presidency Magistrate or the District Magistrate may take or cause to be taken such steps and use or cause to be used such force as may in his opinion be necessary. (2) All the property and effects of the company shall be deemed to be in the custody of the Court as from the date of order for the winding up of the company. 13. Section 457 of the Companies Act provides for the power of the liquidator. 14. The controversy, which arises for consideration of this Court, is as to whether having regard to the provisions contained in the said Act vis-a-vis the Companies Act, the Advocate-Commissioner appointed by the Tribunal could take possession of certain properties belonging to the debtor company without the leave of the Company Court. 15. The apparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) Whether in respect of proceedings under the RDB Act at the stage of adjudication for the money due to the Banks or Financial Institutions and at the stage of execution for recovery of monies under the RDB Act, the Tribunal and the Recovery Officers are conferred exclusive jurisdiction in their respective spheres? (2) Whether for initiation of various proceedings by the Banks and Financial Institutions under the RDB Act, leave of the Company Court is necessary under Section 537 before a winding up order is passed against the Company or before provisional liquidator is appointed under Section 446(1) and whether the Company Court can pass orders of stay of proceedings before the Tribunal, in exercise of powers under Section 442? (3) Whether after a winding up order is passed under Section 446(1) of the Company Act or a provisional liquidator is appointed, whether the Company Court can stay proceedings under the RDB Act, transfer them to itself and also decide questions of liability, execution and priority under Sections 446(2) and (3) read with Sections 529, 529A and 530, etc., of the Companies Act or whether these questions are all within the exclusive jurisdiction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Companies Act, 1956 and the latter Act has to yield to the Provisions 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, Points 2 and 3 are decided accordingly in favour of the appellant and against the respondents. (Underlining is ours) However, in our opinion, the aforementioned decision is not an authority for the proposition with which this Court is concerned in this case. 19. In Dias on Jurisprudence, Fifth Edition at page 143, it is stated- Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. Rationale and dicta tend to shade into each other. The former have law-quality and are binding on lower Courts; dicta, too, have law-quality but are not binding at all. Vis-a-vis a higher Court even the ratio decidendi of a lower Court decision has only persuasive force like that of a dictum. It has been pointed out that some dicta are so authoritative that the distinction between r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law but they serve to suggest solutions to problems not yet decided by Courts. Indeed dicta of the House of Lords or of Judges who were masters of their fields, like Lord Blackburn, may often in practice enjoy greater prestige than the rationale of lesser Judges. 21. In C.I.T. v. Sun Engineering Works (P) Limited, [1992]198ITR297(SC) , Dr. A.S. Anand, J (as the learned Judge then was) stated the law in the following terms : It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court..... 22. In Java Sen v. Sujit Kr. Sarkar ILR 2000 A N 145, it was held- It is now well known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well known that even a slight distinction in fact or an additional fact may make a lot of difference in decision making process (See Quinn v. Lealhain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Tribunal has exclusive jurisdiction in relation to adjudication and execution but it is another thing to say that such jurisdiction has to be exercised in a particular manner. 28. The Tribunal although has a plenary jurisdiction, its right of execution, in our opinion, must be done having regard to the provisions laid down therein. We must also take into consideration the fact that the Tribunal is subject to the supervisory jurisdiction of this Court. The jurisdiction of the Tribunal for adjudication and the right of execution vis-a-vis the jurisdiction of the Company Court has been determined in Allahabad Bank's case but not the mode of recovery thereof. 29. When a liquidator or a provisional liquidator as the case may be is directed to take into his custody or under the control the property, effects and actionable claims, the company is or appears to be entitled to by reason of the provisions contained in Section 456 of the Companies Act, there cannot be any doubt whatsoever that leave of the Court must be obtained. By reason of the aforementioned provision a legal fiction is created. In East End Dwellings Co., Ltd. v. Finsbury Borough Council 1951(2) All ER 587, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doctrine of amity or comity of reasons demands that no order contrary thereto or inconsistent therewith should be passed. In Lewis Injunction the law has been laid down. In Law of Injunctions by Lewis Spelling, the law has been stated in the following terms-Conflict and loss of jurisdiction, Where a Court having general jurisdiction and having acquired jurisdiction of the subject matter has issued an injunction, a Court of concurrent jurisdiction will usually refuse to interfere by issuance of a second injunction. There is no established rule of exclusion which would deprive a Court of jurisdiction to issue an injunction because of the issuance of an injunction between the same parties appertaining to the same subject matter, but there is what may properly be termed a judicial comity on the subject. And even where it is a case of one Court having refused to grant an injunction, while such refusal does not exclude another coordinate Court of Judge from jurisdiction, yet the granting of the injunction by a second Judge may lead to complications and retaliatory action. The jurisdiction to afford the relief is not lost by the fact that during the pendency of the suit the act which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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