TaxTMI 
TaxTMI 
2013 (2) TMI 596
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.... directors of the company are co-obligants in the loan transaction and properties belonging to them were also mortgaged for securing financial assistance. Consequent to default committed by the fourth respondent in repayment, respondents Nos. 1 and 2 initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act") and the assets of the fourth respondent-company, including the factory and industrial land, were put to auction as per exhibit P1 notification. 2. The contention of the petitioners is that, if the factory is closed down pursuant to the sale proposed, the petitioners will be rendered jobless and their families will be put to starvati....
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....ndents Nos. 1 and 2 are now proceeding against those secured assets by resorting to provisions under the SARFAESI Act. The petitioners are now raising claims based on amounts allegedly due to them from the fourth respondent. Admittedly, the alleged dues are not adjudicated or quantified by any competent authority empowered under the relevant labour legislations. Even assuming that there is any amount due to the petitioners from the fourth respondent, which stands adjudicated and quantified, the question arises as to whether the petitioners are entitled to restrain the proceedings initiated under the SARFAESI Act or to claim priority in distribution with respect to amounts realised in proceedings under the SARFAESI Act or under the Recovery ....
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....of companies which are ordered to be wound up. The said provision prescribes priority with respect to workmen's dues. 5. In the case at hand, neither the fourth respondent-company has been wound up nor any proceedings has been initiated for winding up of the said company. Therefore it is evident that none of the provisos to section 13(9) is applicable in this case. Learned counsel for the petitioners had placed reliance on the decision of the apex court in National Textile Workers' Union v. P. R. Ramakrishnan [1983] 53 Comp Cas 184 and also on the decision in Allahabad Bank v. Canara Bank [2000] 101 Comp Cas 64 (SC). The former decision deals with rights of workers to have a say in the matter of winding up of the company. The latter one de....
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....dant in a proceedings under the RDBFI Act, against which no order of winding up has been issued, is only like any other defendant, and if in such case any question arises before the Tribunal with respect to priority in distribution of any amount realised, the Tribunal need to decide such questions bearing in mind only the principles underlying in section 73 of the Code of Civil Procedure, 1908. It is observed that section 22 of the RDBFI Act confers wider powers on the Tribunals to decide such questions of priorities, subject only to principles of natural justice. Therefore, it is evident that in a case where there is no proceedings pending before the company court or in case where the company is not under liquidation, any claimant or the w....