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Issues: Whether a bank or financial institution that has already instituted recovery proceedings before the Debt Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 can maintain a winding up petition under sections 433, 434 and 439 of the Companies Act, 1956 on the ground that the company is commercially insolvent and unable to pay its debts.
Analysis: The remedies under the two enactments operate in different fields. Proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 are concerned with adjudication of liability and recovery of debts due to banks and financial institutions through the Tribunal and Recovery Officer. A winding up petition under the Companies Act, 1956 is not a mere money recovery action but seeks a declaration that the company is commercially insolvent and should be wound up. The Tribunal under the recovery statute has no jurisdiction to order winding up, while the Company Court does not exercise the debt recovery jurisdiction vested in the Tribunal. Since the two remedies are distinct and mutually exclusive, there is no inconsistency between them and section 34 of the recovery statute does not bar a winding up petition merely because a recovery application is pending.
Conclusion: A prior recovery proceeding before the Debt Recovery Tribunal does not bar a bank or financial institution from presenting or pursuing a winding up petition under the Companies Act, 1956.
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