Allahabad High Court
Uco Bank,A Body Incorporate vs The Official Liquidator U.P. & Another on 9 August, 2010
Bench: Ferdino Inacio Rebello, Amreshwar Pratap Sahi
Chief Justice's Court Case :- SPECIAL APPEAL No. - 78 of 2000 Petitioner :- Uco Bank,A Body Incorporate Respondent :- The Official Liquidator U.P. & Another Petitioner Counsel :- Manoj Misra,Dilip Gupta Respondent Counsel :- Navin Sinha,Anoop Trivedi,R.P. Agarwal,Ravi Kant,Vipin Sinha Hon'ble Ferdino Inacio Rebello,Chief Justice Hon'ble Amreshwar Pratap Sahi,J.
Heard learned counsel for the parties.
The Board for Industrial & Financial Reconstruction (BIFR) by order dated 14.2.1990 had recommended the winding up of the Company M/s Cawnpore Chemical Works Pvt Ltd. An appeal preferred against the said order before the AAIFR was dismissed on 8.2.1991. AAIFR on 2.5.1991 directed that company be wound up and the official liquidator was appointed for the said purpose.
The Company filed a writ petition No. 9441 of 1991 challenging the said order of AAIFR dated 2.5.1991 which was stayed by an interim order dated 3.9.1991.
The company judge in view of the order passed in Writ Petition No. 9441 stayed the proceedings on 2.11.1994. The company thereafter filed an application on 4.1.1995 before the company court to sell the properties which permission was granted vide order dated 30.5.1997. The land was sold and by order of that a sum of Rs. 1.26 crores was realised, which the company court directed to be deposited before the Official Liquidator.
During the pendency of this proceeding the company and the bank entered into a compromise whereby the entire deposit with the Official Liquidator was to be paid to the Bank and in addition to that a sum of Rs. 9 lacs was to be paid.
The submission on behalf of the appellant bank is that they entered into a compromise which was based on a misrepresentation that the amount deposited with the Official Liquidator was lying in an account not earning any interest. In these circumstances, they entered into a negotiation for settling their entire claim for the sums due. Whereas in fact an additional amount of Rs. 25.3 lacs was earned as interest on the amount deposited with the Official Liquidator.
In the mean time writ petition No. 9441 of 1991 came to be allowed on 26.4.2002 whereby order of AAIFR was set aside. While setting aside the order, this Court in Paragraph 16 of the judgment reported in 2002 (3) AWC 2012 issued direction No. 1 to the Official Liquidator to retain a sum of Rs. 23,32,424 claimed by UCO bank towards interest pending decision of this appeal. The amount was to be kept in fixed deposit in a interest bearing account for six months at a time to abide by decision of the special appeal and any consequential directions in respect thereof.
The aforesaid direction was issued as the appellant, in the mean time, in proceedings before the company court had filed the application for release of the amount of interest lying with the Official Liquidator in his favour which was rejected giving rise to the present appeal.
The question for consideration before us is whether the order of the learned Single Judge is liable to be interfered with or not. Firstly the compromise was not filed with the company court. The order of AAIFR itself was set aside. Secondly the company court in such matters really would have no jurisdiction. Thirdly the contention raised with regard to a fraud or misrepresentation by the company to the bank, cannot be the subject matter of recalling any order, as there was no order of sanction to the settlement or compromise by the company court.
In the light of that we are clearly of the opinion that no fault can be found with the order impugned. It shall however be open to the appellant to pursue his remedy before the appropriate forum or the civil court where such a claim of interest can be decided and we therefore direct the Official Liquidator not to release the aforesaid disputed amounts of interest for a period of four months from today in favour of the company.
The appeal is disposed of accordingly.
(A.P. Sahi,J.) (F.I. Rebello,CJ.) Order Date :- 9.8.2010 Sahu