LexTHE OFFICIAL LIQUIDATOR, U.P. AND UTTARAKHAND versus ALLAHABAD BANK AND ORS.
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[2013) 4 S.C.R. 207 THE OFFICIAL LIQUIDATOR, U.P. AND UTIARAKHAND v. ALLAHABAD BANK AND ORS. (Civil Appeal No. 2511 of 2013) MARCH 12, 2013. [H.L. DATIU AND DIPAK MISRA, JJ.] A B Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - s.30 - Auction/sale by Recovery Officer t.mder 1993 Act - In a winding-up proceedings, C appointment of Official Liquidator by Company Court - Officia! Liquidator's challenge to the auction/sale before Company Court - Jurisdiction of Company Court to entertain the challenge - Held: 1993 Act is a complete code in itself and the tribunal (ORT) has exclusive jurisdiction for the purpose o of sale of the properties for realization of the dues to the Banks and financiql institutions - But at the time of auction/sale, it is required to associate the Official Liquidator - 1993 Act clearly provides- that any person aggrieved by the act of Recovery Officer can prefer an appeal - The Official E Liquidator whose association is mandatorily required can be regarded as person aggrieved by the action taken by Recovery Officer - In view of the fact that 1993 is a special legislation, appeal thereunder is the only remedy, and Company Court has no jurisdiction in such matter - Doctrine F of Election is also not applicable in this case - Thus Official Liquidator can take recourse only to the mode of appeal under 1993 Act and cannot approach the Company Court - Companies Act, 1956 - Jurisdiction - Doctrine - Doctrine of Election. High Court - Jurisdiction of - Under Companies Act - Nature of- Held: Jurisdiction of High Court under Companies Act is ordinary in nature and not extraordinary or inherent. 207 G H 208 SUPREME COURT REPORTS [2013] 4 S.C.R. A The question for consideration in the present appeal was whether the Company Judge under the Companies Act, 1956 has jurisdiction at the instance of the Official Liquidator to set aside the auction or sale held by the Recovery Officer under the Recovery of Debts ·due to B Banks and Financial Institutions Act, 1993 or whether the Official Liquidator was required to follow the route as engrafted under the 1993 Act by filing an appeal assailing the auction and the resultant confirmation of sale. c Disposing of the appeal, the Court HELD: 1. The Recovery of Debts due to Banks and Financial Institutions Act, 1993 is a comprehensive Code dealing with all the facets pertaining to adjudication, appeal and realization of the dues payable to the banks D and financial institutions and the tribunal (ORT) has the exclusive jurisdiction for the purpose of sale of the properties for realization of the dues of the banks and financial institutions. [Paras 11 and 19] [218-A-B; 223-F] E Damji Valji Shah v. L/C of India AIR 1966 SC 135: 1965 SCR 665 - relied on. \ Andhra Bank v. Official Liquidator and Anr. (2005) 5 SCC 75: 2005(2) SCR 776; Jitendra Nath Singh v. Official Liquidator and Ors. (2013) 1 SCC 462; International Coach F Builders Ltd. v. Kamataka State Financial Corpn. (2003) 10 SCC 482: 2003 (2) SCR 631; A.P. State Financial Corpn. v. Official Liquidator (2000) 7 SCC 291: 2000 (2) Suppl. SCR 288 - referred to. G 2. While exercising jurisdiction under the Companies Act, the High Court exercises ordinary jurisdiction and not any extraordinary or inherent jurisdiction and that is why, the legislature has appropriately postulated that the jurisdiction of the High Court under Articles 226 and 227 H of the Constitution would not be affected. Thus, the ORT OFFICIAL LIQUIDATOR, U.P. AND UTTARAKHAND v. 209 ALLAHABAD BANK AND ORS. has exclusive jurisdiction to sell the properties in a A proceeding instituted by the banks or financial institutions, but at the time of auction and sale, it is required to associate the Official Liquidator. Once the Official Liquidator is associated, he has a role to see that there is no irregularity in conducting the auction and B appropriate price is obtained by holding an auction in a fair, transparent and non-arbitrary manner in consonance with the Rules framed under the 1993 Act. [Paras 22 - 24] [225-B-F] Jyoti Bhushan .Gupta and Ors. v. The Banaras Bank Ltd. C AIR 1962 SC 403: 1962 Suppl. SCR 73; Pravin Gada and Anr. v. CentralBank of India and Ors. (2013) 2 SCC 101 -· relied on. 3. An appeal lies to the ORT challenging the action D of the Recovery Officer. In the ins~ant case, the Official Liquidator was not satisfied with the mann
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