Exclusive DRT jurisdiction governs creditor priorities and workmen's claims in recovery proceedings, with funds preserved pending adjudication.

Under the DRT Act, the Debt Recovery Tribunal and Recovery Officer have exclusive jurisdiction over adjudication and execution issues arising from a recovery certificate, including determination of priorities between secured creditors and workmen. A company court cannot order direct disbursement of workmen's dues on an asserted admission without Tribunal adjudication. To protect the claim pool pending decision, the retained amount was to be kept in fixed deposit, with the Tribunal to invite and scrutinise claims, quantify dues, and distribute funds in accordance with the pari passu statutory priority scheme, including workmen's claims.

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Issues: (i) Whether the Debt Recovery Tribunal had exclusive jurisdiction to adjudicate and determine the workmen's claims and the priorities among the secured creditors and the workmen in execution of the recovery certificate. (ii) Whether directions were required to preserve the amount already retained and to lay down an interim procedure for adjudication and payment of the workers' dues.

Issue (i): Whether the Debt Recovery Tribunal had exclusive jurisdiction to adjudicate and determine the workmen's claims and the priorities among the secured creditors and the workmen in execution of the recovery certificate.

Analysis: The decision followed the principle that, in matters arising from recovery proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Tribunal and the Recovery Officer have exclusive jurisdiction at the stages of adjudication and execution. The Court treated the question of priorities among banks, secured creditors, and workmen as falling to be decided under the statutory scheme, with the company court not interfering in that process. The workmen's claims therefore had to be adjudicated by the Tribunal before payment, and the company court could not order direct disbursement merely on an asserted admission by the company or its former management.

Conclusion: The issue was answered in favour of the respondent bank's contention on jurisdiction, and the workmen were directed to seek adjudication before the Debt Recovery Tribunal.

Issue (ii): Whether directions were required to preserve the amount already retained and to lay down an interim procedure for adjudication and payment of the workers' dues.

Analysis: Having held that the Tribunal must decide the claims, the Court issued protective and procedural directions so that the retained amount would remain intact pending adjudication. It directed the Tribunal to hold the amount in fixed deposit, adjudicate the workmen's claims, and make payment out of the retained sum, with liberty to call for any shortfall from the amount already withdrawn by the bank. The Court also prescribed interim guidelines for inviting claims, collecting supporting records, scrutinising claims, quantifying dues, and applying a pari passu distribution framework for workmen and other entitled creditors.

Conclusion: The directions were granted in favour of the petitioners to secure adjudication and preserve funds for payment of their dues.

Final Conclusion: The petition was disposed of with directions ensuring that the workmen's claims would be adjudicated by the Debt Recovery Tribunal and that the available funds would be safeguarded for appropriate distribution in accordance with the statutory priority scheme.

Ratio Decidendi: In recovery proceedings under the DRT Act, the Tribunal has exclusive jurisdiction to adjudicate claims and determine priorities among creditors, including workmen's claims under the pari passu statutory scheme, and the company court cannot itself order payment without such adjudication.

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