TaxTMI 
TaxTMI 
2014 (1) TMI 1962
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....DB Act") and the Company Court (High Court) exercising jurisdiction under the Companies Act, 1956. In other words, it is RDB Act,1993 Vs. Companies Act,1956. 3. O.S.A.NO.389 of 2013 has been filed by respondents 1 & 2 in Comp.Appl.No.160 of 2013 in C.P.No.23 of 2003 wherein, the Company Court had transferred Appeal Nos. 1 & 2 of 2013 from Debt Recovery Tribunal [DRT] No. III, Chennai to the Company Court. 4. O.S.A.NO.390 of 2013 has been filed by applicants in Transfer C.A.No.1108 of 2013 in C.P.No.23 of 2003, to set aside the order dated 24.01.2013 passed in I.A.No.40 of 2012 in R.P.No.57 of 2008 in D.R.C. No.53 of 2008 in O.A.No.269 of 2007 by the Recovery Officer, DRT No. III, Chennai and stay the auction sale scheduled on 30.1.2013, which was dismissed by the Company Court by its common order dated 5.11.2013. 5. O.S.A.No.391 of 2013 has been filed by the applicants in Transfer C.A.No.1109 of 2013 in C.P.No.23 of 2003, to set aside the order dated 24.11.2013 passed in I.A.No.41 of 2012 in R.P.No.57 of 2008 in DRC No.53 of 2008 in O.A.No.269 of 2007 by the Recovery Officer, DRT No. III, Chennai and stay the auction sale scheduled on 30.1.2013, which was dismissed by the ....
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....15 of 2008 in C.P.No.23 of 2003 for directing the Official Liquidator to execute the sale deed in their favour in pursuance of the sale agreements dated 23.2.2005 and 22.1.2007. In C.A.No.216 of 2008, they have sought for injunction to protect their possession of the said property. On 20.12.2010, the Company Court taking note of the fact that already the State Bank of India has taken steps to sell the property by initiating proceedings before D.R.T-III, Chennai and the Official Liquidator also has no objection for this, dismissed C.A.Nos.215 & 216 of 2008, however observing that the applicants necessarily have to go before D.R.T.-III, Chennai and file appropriate applications. (vi) In 2008, in O.A.Nos. 297, 269 and 277 of 2007, D.R.T.-III, Chennai issued Recovery Certificates D.R.C.Nos.40/2008, 53/2008 and 63/2008 respectively as against the directors of M/s. Kaushik Switch Gears (P) Ltd. to recover the bank dues. In D.R.C.No.53 of 2008, the Tribunal directed sale of the properties including the 3 grounds of property situate in Mogappair, which was agreed to be sold to the appellants by the said directors. (vii) On 11.2.2011, the Recovery Officer, D.R.T-III, Chenn....
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....putes can be dealt with conveniently before this Court and the Bank, which has been unable to bring the property to sale before the Debts Recovery Tribunal, will stand a better chance by having the appeals transferred to this court. 9 Hence, this application is allowed and the appeals in A.Nos.1 and 2 of 2013 pending on the file of the Presiding Officer, Debts Recovery Tribunal-3, Chennai shall stand transferred to this Court. Office is directed to send a copy of this order to the Debts Recovery Tribunal-3, Chennai for the transfer. List all the applications for hearing on 27.6.2013. The prayer made by the learned Official Liquidator for a direction to the respondents 1 and 2 to pay occupation charges is kept aside to be decided along with other applications." (xi) In the Company Court, the appellants have filed Transfer C.A.Nos.1108 and 1109 of 2013 to set aside the orders passed by the Recovery Officer, D.R.T-III, Chennai, on 24.1.2013 in I.A.Nos.40 & 41 of 2013 in R.P.No.57 of 2008 in D.R.C.No.53 of 2008 in O.A.No.269 of 2007 on 24.1.2013 and sought for stay of the auction fixed on 30.1.2013. (xii) On 5.11.2013, the Company Court took up C.A.No.160 of ....
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....482] and K.AROKIYARAJ Vs. THE CHIEF JUDICIAL MAGISTRATE, SRIVILLIPUTHUR AND ANOTHER (MANU/TN/1796/ 2013) [Full Bench]. 11. On the other hand, Mr. S. R. Sundar, learned counsel appearing for the Official Liquidator submitted that after filing the winding up petition before the Company Court, the appellants have entered into sale agreements, dated 23.2.2005 and 21.1.2007 with the directors of the Company, which is a fraudulent preference. It is hit under section 531 of the Companies Act, 1956. The appellants have created many hurdles preventing the bank from recovering its dues from the company in liquidation. The appellants have also placed many bottlenecks on the various steps taken by the Official Liquidator to carry out the orders of the Company Court passed in C.P.No.23 of 2003. The only motive of the appellants is to drag on the proceedings. In such circumstances, direction has been sought for from the Company Court under section 460(4) of the Companies Act, 1956 to transfer Appeal Nos.1 and 2 of 2013 from D.R.T-III, Chennai to the Company Court so as to have a comprehensive disposal of all the matters in C.P.No.23 of 2013 and also a declaration that the sale agreement in fa....
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....rders of the Recovery Officer passed in I.A.Nos.40 and 41 of 2013 in R.P.No.57 of 2008 in D.R.C. No.53 of 2008 in O.A.No.269 of 2007 have been dismissed by the Company Court by its common [impugned] order dated 5.11.2013. 17. On the arguments advanced by both sides, question arises, whether the Company Court on the petition filed under the provisions of the Companies Act, 1956 can transfer the proceedings under RDB Act from D.R.T.-III, Chennai to the Company Court, whether the Company Court has such jurisdiction, in other words, it is, Companies Act, 1956 vs. RDB Act, 1993? 18. Exactly such a tangle was posed before the Hon'ble Apex Court in ALLAHABAD BANK vs. CANARA BANK AND ANOTHER [2000(4) SCC 406]. 19. In the said case, Allahabad Bank obtained money decree against its debtor, namely, M/s. M.S. Shoes (East) Co. Ltd. from the Debts Recovery Tribunal, Delhi under the RDB Act. A claim of Canara Bank as secured creditor as against the said company was also pending before the said Tribunal. Winding up petition was filed before the Delhi High Court to wound up the said company under section 442 and 537 of the Companies Act. Allahabad Bank initiated sale proceedings before....
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.... Tribunal in regard to adjudication is exclusive. The RDB Act requires the Tribunal alone to decide applications for recovery of debts due to Banks or Financial Institutions. Once the Tribunal passes an order that the debt is due, the Tribunal has to issue a certificate under Section 19(22) (formerly under Section 19(7)) to the Recovery Officer for recovery of the debt specified in the certificate. The question arises as to the meaning of the word 'recovery' in Section 17 of the Act. It appears to us that basically the Tribunal is to adjudicate the liability of the defendant and then it has to issue a certificate under Section 19(22). Under Section 18, the jurisdiction of any other court or authority which would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon the liability is exclusively vested in the Tribunal. (This exclusion does not however apply to the jurisdiction of the Supreme Court or of a High Court exercising power under Articles 226, 227 of the Constitution). This is the effect of Sections 17 and 18 of the Act. 23. Even in regard to 'execution', the jurisdiction of the Recovery Officer....
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....xecution proceedings" must be taken up only by the Special Tribunal under the Act. In our opinion, in view of the special procedure for recovery prescribed in Chapter V of the Act, and Section 34, execution of the certificate is also within the exclusive jurisdiction of the Recovery Officer. 25. Thus, the adjudication of liability and the recovery of the amount by execution of the certificate are respectively within the exclusive jurisdiction of the Tribunal and the Recovery Officer and no other Court or authority much less the Civil Court or the Company Court can go into the said questions relating to the liability and the recovery except as provided in the Act. Point 1 is decided accordingly. 31. It may also be noticed that in the L.I.C. Act of 1956, there was no provision like Section 34 of the RDB Act giving overriding effect to the provisions of the L.I.C. Act. Still this Court upheld the exclusive jurisdiction of the LIC Tribunal observing as follows: the provisions of the special Act i.e. the L.I.C. Act will override the provisions of the general Act, the Companies Act which is an Act relating to Companies in general. We are of the view that the ap....
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....provisions of Section 529A of the Companies Act, 1956 and to pay the surplus, if any, to the Company." (emphasis supplied) Section 19(19) is clearly inconsistent with Section 446 and other provisions of the Companies Act. Only Section 529A is attracted to proceedings before the Tribunal. Thus, on questions of adjudication, execution and working out priorities, the special provisions made in the RDB Act have to be applied. Special law v. general law: 38. At the same time, some High Courts have rightly held that the Companies Act is a general Act and does not prevail under the RDB Act. They have relied upon Union of India v. India Fisheries (P) Ltd. 40. Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely, Section 34. A similar situation arose in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of India where there was inconsistency between....