Gauhati High Court
Indian Overseas Bank And Anr vs The Official Liquidator And 2 Ors on 19 March, 2020
Author: Sanjay Kumar Medhi
Bench: Manojit Bhuyan, Sanjay Kumar Medhi
Page No.# 1/5
GAHC010246062019
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C) 8060/2019
1:INDIAN OVERSEAS BANK AND ANR.
A BODY CORPORATE CONSTITUTED UNDER THE BANKING COMPANIES
(ACQUISITION AND THE TRANSFER OF UNDERTAKINGS ) ACT 1970,
HAVING ITS PRINCIPAL REGISTERED AND HEAD OFFICE AT 763, ANNA
SALAI, CHENNAI- 600002 AND HAVING A REGIONAL OFFICE AT JUPITARA
PALACE, A.B.C. BUS STOP, G.S. ROAD, GUWAHATI- 781005.
2: THE BRANCH HEAD
INDIAN OVERSEAS BANK
DISPUR BRANCH
54 UTTAM BHAWAN
UDAYACHAL PATH
CHRISTIAN BASTI
GUWAHATI- 781005
VERSUS
1:THE OFFICIAL LIQUIDATOR AND 2 ORS.
5TH FLOOR, PRITHVI PLANET, G.S. ROAD, LACHIT NAGAR, GUWAHATI-
781003.
2:DOUBLE DEE CONSTRUCTION PVT. LTD.
(COMPANY OF LIQUIDATION) THROUGH THE OFFICIAL LIQUIDATOR
5TH FLOOR
PRITHVI PLANET
G.S. ROAD
LACHIT NAGAR
GUWAHATI- 781003.
3:THE RECOVERY OFFICER-II
DEBTS RECOVERY TRIBUNAL
GUWAHATI AT SUWARNA BHAWAN
NEW TOWN PATH
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G.S. ROAD
ULUBARI
GUWAHATI- 781007
Advocate for the Petitioner : MR. A GANGULY
Advocate for the Respondent : MR. K GOSWAMI
BEFORE
HONOURABLE MR. JUSTICE MANOJIT BHUYAN
HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI
ORDER
19.03.2020 (Sanjay Kumar Medhi, J) Heard Shri A. Ganguly, learned counsel for the petitioners. Also heard Ms. A. Neog, learned counsel for respondent Nos.1 and 2.
2. The petitioner bank is before this Court assailing the order dated 12.03.2018 passed by the Recovery Officer in OA 20/2011. The petitioner bank having advanced certain loan to the respondent No.2, had initiated recovery proceedings under RDDBFI Act by filing the application in OA 20/2011 before the Debts Recovery Tribunal, Guwahati seeking issue of recovery certificate. The said proceedings culminated in the judgment dated 12.08.2015 whereby the Debts Recovery Tribunal allowed the application and issued the recovery certificate for a sum of Rs.21,81,74,284.05 (Rupees Twenty One Crore Eighty One Lakhs Seventy Four Thousand Two Hundred Eighty Four Five Paisa) with interest etc.
3. Based on such recovery certificate issued by the Debts Recovery Tribunal, the petitioner bank initiated the proceeding before the Recovery Officer. At this point, a creditor of respondent No.2 had filed a winding up petitions under the provisions of the Companies Act in Company Petition No.8/2010. The said proceeding has resulted in the Company Court passing the winding up order. It is in that light the official liquidator is put in charge of the Page No.# 3/5 assets and the affairs of the respondent No.2 Company.
4. In that view of the matter, in order to protect the interest of the workmen and also the other creditors of the respondent No.2 Company, the Official Liquidator raised certain objections in the recovery proceedings in before the Recovery Officer. In the interregnum the petitioner company having invoked the provisions of SARFAESI Act had brought the secured assets which belonged to the respondent No.2 Company to sale by conducting an e-auction through the notice dated 15.12.2017. Pursuant thereto, the sale has been completed and the petitioner bank had realized the sum of Rs.2,00,50,000/-. It is in that light, the Recovery Officer having taken note that the property has been brought to sale by the petitioner bank and also having taken note of the claim put forth by the Official Liquidator has directed the petitioner bank to keep the entire sale proceeds received by them from sale of the mortgaged property in a no-lien interest bearing FDR for a period of six months with provision of subsequent renewal in six months till further order and file the number of FDR account so credited with the Recovery Officer. The petitioner, therefore, being aggrieved by such direction issued by the Recovery Officer, is before this Court in this petition.
5. The fact that the respondent No.2 Company is in liquidation due to the order passed in the Company Petition No.8/2010 is not in dispute. If that be the position, the provision as contained in Section 529-A of the Companies Act would come into play and the distribution of the amount recovered in the liquidation proceedings will have to be made in the order of preference as provided under the said provision. If that be so, the dues to the workmen and the dues payable to any other secured creditors, if indicated in the records, will have to be taken note by the Company Court and an appropriate order is required to be passed. If that be the position, the entire amount which has been realized by the petitioner and has been appropriated to the loan account cannot be appropriated to the detriment of the other preferential creditors as indicated in Section 529-A of the Act. In that view of the matter, when the position of law on that aspect is clear and at this juncture since the petitioner has already appropriated the amount, the contention with regard to the petitioner having right to sell the property under the provision of the SARFAESI Act need not be Page No.# 4/5 adverted at this juncture. Even if such right to sell the property is accepted, when the exercise of the preferential right under Section 529-A of the Companies Act is to be brought into effect, the same would take precedence. In that view, all that is to be ensured is that at the point when the Company Court takes note of the claim in terms of Section 529- A and an order for disbursement of the amount is made to that extent, the petitioner herein would comply with the order to be issued by the Company Court to deposit such amount before the Company Court. In that regard we have taken note of the averment as contained in paragraph 17 of the writ petition which reads as herein under:
"17. That the Petitioner Bank hereby undertakes to pay the amount finally determined as workmen's dues by the OL, including any shortfall, out of the sale proceeds amounting to Rs.2,00,50,000/-, in case the Petitioner Bank is allowed to retain the same and adjust the amount towards the outstanding dues as per the Recovery Certificate."
6. If these aspects are kept in view and if the interest of the preferential creditors of the Company in the liquidation proceedings is protected, the direction issued by the Recovery Officer in OA 20/2011 through the order dated 12.03.2018 would not be sustainable at this point.
7. Accordingly, the order dated 12.03.2018 passed by the Recovery Officer in OA 20/2011 is set aside. However, it is made clear that though the petitioner has appropriated the amount realized through the auction sale conducted through the notice dated 15.12.2017, they shall deposit such amount that may be directed by the Company Court in the orders to be passed in the application to be filed in the liquidation proceeding bearing Company Petition No.8/2010 at the appropriate stage.
8. To facilitate the entire exercise, it is directed that the FDR which are in the name of Recovery Officer of the DRT be immediately released to the Bank and consequently the Bank would take all steps including issuance of notice under Section 326 of the new Act Page No.# 5/5 corresponding to Section 529 (A) of the Companies Act, 1956. As agreed to by the learned Counsel for the Bank, the Bank would bear all expenses which would be incurred in the above process. Since this matter is pending since long the notices be issued within a period of one month from today.
9. With a direction to that effect to the petitioner herein, the petition stands disposed of.
JUDGE JUDGE
Comparing Assistant