TaxTMI 
TaxTMI 
2000 (12) TMI 839
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.... (supra) was not applicable to the facts of the cases under appeals, as there did not exist a genuine dispute between the parties which could be referred to the High-Powered Committee. 4. The facts giving rise to the filing of the present appeals, as extracted from the appeal arising out of SLP(C) No. 14660, are as under. 5. The appellants filed Company Petition Nos. 11/111/95-CLB and 12/111/95-CLB under section 111(4), (5) and (7) of the Companies Act, 1956, ('the Act') before the Company Law Board, Northern Region Bench, New Delhi, stating therein that they were trustees of Canbank Mutual Fund ('CBMF'), a trust constituted under the Indian Trusts Act, 1882. The main object of the trust is to conduct business of mutual fund by permitting savings of small and individual investors through various schemes, inviting subscriptions from the prospective investors and channellising the funds into the capital market for attractive returns. From September 1993 CBMF was being managed by an asset managing company, the appellant No. 6. Appellant No. 1 is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1971. The bank as 'settlor' by....
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....e official liquidator requesting him to issue a no-objection certificate as demanded by the corporation. On 18-10-1993 the CBMF was informed that as 'no-objection certificate' had not been furnished, the original bond certificates were being returned for further necessary action by the CBMF. On 2-11-1993, appellant No. 6, the Canbank Investment Management Services Ltd. addressed a letter to the official liquidator of the Bank of Karad suggesting that CBMF would move the court for a direction to the CBI for production of relevant documents of Bank of Karad, under liquidation, and the official liquidator could obtain copies of those documents on the basis of which he could issue a no-objection certificate. Inaction attributable to the official liquidator was intimated vide letters dated 18-11-1993 and 15-7-1994. It was contended before the CLB that the official liquidator was not justified in not issuing the no-objection certificate. It was submitted that the corporation was bound and liable in law to transfer the aforesaid bonds in the name of Canara Bank, trustee of CBMF and pay the redemption proceeds in respect thereof since the transaction was not transgression of section 531. T....
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....directed to pay the redemption amount to Canara Bank.' 8. On considering the material placed before it, the CLB found that the corporation had specifically recognised the holdings in the name of the Mutual Fund. Canara Bank had, therefore, approached the Board in the representative capacity of the trust and not in its individual capacity. The corporation could not deny such fact as it had admitted having registered transfers in the name of the Trust earlier. Under section 6 of the Ban- king Regulations Act, 1949, the Bank as a part of its banking function could also take up the Trusteeship function. A trustee could not mix up the trust's funds with its own funds. Dealing with the facts of the case, the CLB held Canara Bank v. NTPC Ltd. [1996] 23 CLA 92 : '. . . We are convinced that Canbank Mutual Fund is the real owner of both 13 per cent and 14 per cent bonds and that Canara Bank is holding the bonds only in the capacity of a trustee. In fact this is not seriously contested by NTPC as well. Since the relationship of trustee and beneficiary is proved, in accordance with the Trust Act we could have directed the NTPC to register the bonds in the name of "Canara Bank Trustee - ....
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....utes, regardless of the type, should be resolved amicably by mutual consultation or through the good offices of empowered agencies of the Government or through arbitration and recourse to litigation should be eliminated." 12. In the light of the report of the Cabinet Secretary this court directed as under : "We direct that the Government of India shall set up a committee consisting of representatives from the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India, Ministry and public sector undertakings of the Government of India and public sector undertakings in between themselves, to ensure that no litigation comes to court or to a Tribunal without the matter having been first examined by the committee and its clearance for litigation. Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior Officers only should be nominated so that the committee would function with status, control and discipline. It shall be the obligation of every court and every Tribunal where such a dispute is raise....