Preservation of fixed deposit funds pending Supreme Court ruling on recovery powers over a wound-up company's assets

A company in liquidation sought protection of fixed deposit receipts pending the outcome of a connected Supreme Court question on whether the Debt Recovery Tribunal could direct sale of assets of a wound-up company under the recovery statute. Because the relief sought was directly linked to that pending issue, the court considered preservation of the deposited amount appropriate until further orders. The respondent-bank was restrained from utilising the fixed deposit amount in the meantime, so the funds remained safeguarded pending final determination in the connected matter.

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Issues: Whether the respondent-bank could be restrained from utilising the amount kept in fixed deposit receipts pending the decision in the connected matter before the Supreme Court.

Analysis: The application arose in the context of a company in liquidation and a pending Supreme Court decision on whether the Debt Recovery Tribunal could direct sale of the assets of a wound-up company under the governing recovery statute. Since the issue was directly connected with that pending question, the Court considered it appropriate to preserve the amount until further orders.

Conclusion: The respondent-bank was restrained from utilising the fixed deposit amount till further orders, in favour of the applicant.

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