Exclusive recovery jurisdiction upheld: confirmed auction sale and purchaser's right to possession cannot be defeated by pending challenges.

The Debts Recovery Tribunal has exclusive jurisdiction over adjudication and execution of bank debts, and the company court cannot entertain applications to set aside a confirmed recovery sale or transfer those proceedings to itself. Where the company is in liquidation, sale of assets under the recovery statute may proceed if the official liquidator is notified and heard, and no leave of the company court is required. Once the auction sale is validly conducted, the bid amount is paid, and the sale is confirmed, pending challenges before the tribunal do not by themselves stay the purchaser's rights. The auction purchaser was therefore entitled to possession, and the official liquidator was directed to hand over the property.

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Issues: (i) Whether the company court could entertain applications by the official liquidator and an ex-director to set aside a recovery sale conducted by the Debts Recovery Tribunal and to transfer the recovery proceedings to the company court; (ii) Whether the auction purchaser was entitled to possession of the property after confirmation of sale notwithstanding pending challenges before the Debts Recovery Tribunal.

Issue (i): Whether the company court could entertain applications by the official liquidator and an ex-director to set aside a recovery sale conducted by the Debts Recovery Tribunal and to transfer the recovery proceedings to the company court.

Analysis: The decision treats the Debts Recovery Tribunal as having exclusive jurisdiction in matters of adjudication and execution of debts due to banks and financial institutions. Where a company is in liquidation, the tribunal may proceed with sale of the assets, provided notice is given to the official liquidator and he is heard. The company court's powers under the Companies Act do not displace the special regime of the recovery legislation in such matters, and leave of the company court is not required for proceedings under that special law. The applications seeking transfer and annulment of the confirmed sale were therefore not maintainable before the company court.

Conclusion: The challenge to the recovery sale and the prayer for transfer of the recovery proceedings were rejected and were not maintainable before the company court.

Issue (ii): Whether the auction purchaser was entitled to possession of the property after confirmation of sale notwithstanding pending challenges before the Debts Recovery Tribunal.

Analysis: The sale had already been conducted, the auction purchaser had paid the bid amount within time, and the sale had been confirmed. The existence of pending appeals by itself did not operate as a stay in the absence of any specific stay order. Once the sale stood confirmed, the purchaser's entitlement could not be defeated merely because appellate proceedings were pending. On that basis, possession could be directed to be handed over by the official liquidator.

Conclusion: The auction purchaser was held entitled to possession, and the official liquidator was directed to hand over the subject property.

Final Conclusion: The special recovery forum's process was upheld, the collateral challenges by the official liquidator and ex-director failed, and the auction purchaser succeeded in obtaining possession of the property.

Ratio Decidendi: In proceedings governed by the recovery statute, the Debts Recovery Tribunal has exclusive jurisdiction over sale and execution of the debtor's assets, and once a sale is validly confirmed without a stay, the auction purchaser's right to possession cannot be defeated by pending collateral challenges in the company court.

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