Recovery powers cannot reach company assets in liquidation without hearing the official liquidator before any sale proceeds.

Recovery powers under the 1993 Act extend only to the debtor's property, and assets of a company in liquidation cannot be attached or sold in execution of another person's debt. The company is a separate juristic entity, and on winding up its property vests in the official liquidator for administration under insolvency law. Because the company was not the judgment debtor or certificate debtor, the court held that the Recovery Officer could not proceed against its assets without notice to the official liquidator. Sale was restrained until the liquidator was impleaded and heard, after which the recovery forum could proceed in accordance with law.

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Issues: (i) Whether the Recovery Officer could proceed to attach or sell property belonging to a company in liquidation when the company was not the judgment debtor or certificate debtor in the recovery proceedings; (ii) Whether the company court could protect such property by requiring impleadment of the official liquidator and restraining sale without hearing him.

Issue (i): Whether the Recovery Officer could proceed to attach or sell property belonging to a company in liquidation when the company was not the judgment debtor or certificate debtor in the recovery proceedings.

Analysis: The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 confers exclusive jurisdiction on the Tribunal and the Recovery Officer in relation to recovery from the defendant or judgment debtor, and its overriding provision displaces inconsistent law to that extent. However, that jurisdiction is confined to the property of the debtor against whom the certificate is issued. A company is a separate juristic person distinct from its shareholders, and shareholders do not own the company's assets. Property held in the company's name belongs to the company, and on winding up it vests in the official liquidator for administration in accordance with the law relating to winding up.

Conclusion: The Recovery Officer could not lawfully attach or sell the assets of the company in liquidation, since it was neither the debtor nor the certificate debtor.

Issue (ii): Whether the company court could protect such property by requiring impleadment of the official liquidator and restraining sale without hearing him.

Analysis: Even though the recovery forum has exclusive authority over the debtor's assets, it has no authority to deal with the property of a company in liquidation that is not before it as a debtor. Since the official liquidator represents the company in liquidation and had not been heard, the court held that limited protective jurisdiction could be exercised to prevent unauthorized sale of the company's property. The recovery proceedings could continue only after the official liquidator was impleaded and given a reasonable opportunity to object and place the company's case.

Conclusion: The official liquidator had to be impleaded and heard, and no sale of the company's assets could proceed until the Recovery Officer determined the status of the property.

Final Conclusion: The petition succeeded to the extent of protecting the company in liquidation from sale of its assets in recovery proceedings to which it was not a party, while leaving the recovery forum free to proceed only in accordance with law after hearing the official liquidator.

Ratio Decidendi: The Recovery Officer's exclusive recovery powers extend only to the debtor's property, and company assets belonging to a distinct corporate entity in liquidation cannot be sold in execution of another person's debt without notice to and hearing of the official liquidator.

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