Locus standi limits collateral challenge to secured creditor settlement where Debt Recovery Tribunal proceedings control the assets.

An ex-director lacked locus standi to seek recall of an order that permitted a secured creditor to settle its claim and deal with leasehold rights. The Company Court had already directed the Official Liquidator to hold the properties subject to the Debt Recovery Tribunal's orders, and the assets were to be dealt with in the recovery proceedings. Because the Tribunal's permission had not been stayed, the Company Court would not sit in appeal over that permission or entertain a collateral challenge in the recall proceeding. The proper remedy, if any, lay against the Tribunal's order, and the recall application was therefore rejected.

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Issues: Whether an ex-director had locus standi to seek recall of the order permitting the secured creditor to settle its claim and release the leasehold rights, and whether the earlier order deserved recall in view of the pending recovery proceedings before the Debt Recovery Tribunal.

Analysis: The Company Court had earlier directed that the Official Liquidator would hold the properties subject to the orders of the Debt Recovery Tribunal, and had recognized that properties secured in favour of banks and financial institutions would be dealt with in the recovery proceedings. The company had only leasehold rights, the premises were not required for winding up, and the Official Liquidator was not deriving any income from them. The order impugned in recall was passed in furtherance of the Tribunal's permission permitting the secured creditor to settle with third parties, and that order had not been stayed. The ex-director's challenge to the Tribunal's permission could not be entertained in this proceeding, and the applicant's remedy, if any, lay against the Tribunal's order. The Court also found that the applicant was not entitled to be heard to oppose the secured creditor's application in these circumstances.

Conclusion: The applicant had no locus standi to seek recall, and the order permitting the secured creditor to act on the settlement was not liable to be recalled.

Ratio Decidendi: Where recovery proceedings concerning secured assets are pending before the Debt Recovery Tribunal, and the Company Court has already directed the Official Liquidator to act subject to the Tribunal's directions, the Company Court cannot sit in appeal over the Tribunal's permission or interfere at the instance of an ex-director lacking a direct locus in the recall proceeding.

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