JUDGMENT K.M. THAKER, J. 1. BY this application under Section 391(6) of the Companies Act. 1956 (hereinafter referred to as 'the 1956 Act'), the applicant Company has prayed for below-mentioned relief:- (A) That pending the outcome of the meeting of the secured creditors of the Applicant Company, ordered to be convened on 4th February 2009 at 11.30 AM at Mumbai and pending the hearing and final disposal of the proceedings for sanction of the said scheme of compromise, SICOM Limited, one of the secured creditors of the Applicant Company be restrained from taking any legal proceedings against the Applicant Company, including, acting in any manner whatsoever u/S. 29 of the State Financial Corporations Act, 1951 including its notice dated 18th July 2008.... Re:- FACTS 2. THE relevant facts leading to this application are as follows:- 2.1. THE applicant is a Limited Company (hereinafter referred to as the Company) incorporated and registered as such under the 1956 Act. THE Company is engaged, inter alia, in the business of manufacturing and sale of high quality denim fabrics. 2.2. THE Company appears to have availed diverse types of loans from different Banks/Financial Institutions [FIsfor short] which include Axis Bank, EXIM Bank and SICOM Ltd. THE said Banks/Financial Institutions are banking Company or Financial Institution or Financial Corporation under Recovery of Debts Due to Banks and Financial Institution Act, 1993 [hereinafter referred to as 'RDB Act'] and/or under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereinafter referred to as SARFAESI Act or 2002 Act] and/or under State Financial Corporations Act, 1951 [hereinafter referred to as SFC Act or 1951 Act]. For sake of convenience, the Banks or the Financial Institutions or Corporation are hereinafter referred to as Banks or FIs. 2.3 THE Company, for .the purpose of availing the facility of loans, created charge over various movable/ immovable assets by way of mortgage and/or hypothecation in favour of FIs. It is claimed that earlier mentioned 3 FIs have pari passu charge over the assets of the Company. After some time the Company faltered in repayment of dues to the said FIs. 2.4 It emerges from the record that one of the FIs, viz. SICOM issued a demand notice dated 18.7.2008 calling upon the Company to pay Rs. It is claimed that earlier mentioned 3 FIs have pari passu charge over the assets of the Company. After some time the Company faltered in repayment of dues to the said FIs. 2.4 It emerges from the record that one of the FIs, viz. SICOM issued a demand notice dated 18.7.2008 calling upon the Company to pay Rs. 1,61,74,750/- on or before 25.7.2008 failing which it would be compelled to take actions as may be available in law, including action u/S. 29 of SFC Act. 2.5 About 5 months after the notice, the Company moved an application being Company Application No. 648/2008 under Section 391(1) of 1956 Act. It is declared in the pleadings that the said application was filed on or around 24.12.2008 with following prayer(s):- (A) that a meeting of the secured creditors be convened at Mumbai (where all the secured creditors of the Applicant Company are situated) or at the registered office of Company or at such other place as this Hon'ble Court directs, for the purpose of considering and if thought fit, approving, with or without modification, a scheme of compromise proposed to be made between the Applicant Company and its secured creditors as stated in the Scheme. (B) that directions may be given as to the method of convening, holding and conducting the said meeting and as to the notices and advertisements to be issued in that behalf. 2.6 It emerges that in the background of defaults in making repayments and maintaining the payment of schedule, the Company had contrived a scheme of restructuring debts [hereinafter referred to as the Scheme] and on that ground it preferred the aforesaid application with a prayer for direction to convene the meeting of secured creditors 2.7 An order dated 26.12.2008 was passed in the said Application No. 648 of 2008 directing to convene and hold a meeting of Secured Creditors on 4.2.2009 for considering the proposed arrangement/Scheme. 2.8 After the said order dated 26.12.2008, the Company, on or around 31.12.2008 took out present application, with Judges summons, filed u/S. 391(6) which came to be registered as Company Application No. 1 of 2009. 2.9 THE present application has been preferred mainly on the apprehension that though the meeting (as per the order dated 26.12.2008) was to be held on 4.2.2009, SICOM was likely to take action in pursuance of its notice dated 18.7.2008 against the mortgaged or hypothecated assets. 2.9 THE present application has been preferred mainly on the apprehension that though the meeting (as per the order dated 26.12.2008) was to be held on 4.2.2009, SICOM was likely to take action in pursuance of its notice dated 18.7.2008 against the mortgaged or hypothecated assets. THE Court issued notice and made it returnable on 19.1.2009 with the following ad-interim order passed on 2.1.2009; Present application is filed under Section 391(6) of the Companies Act, 1956 read with Rule 71 of the Companies (Courts) Rules, 1959 seeking injunction and/or stay against Sicom Limited.... This Court (Coram: Hon'ble Mr. Justice K.A. Puj ) has by order dated 26.12.2008 passed in Company Application No.648 of 2008 ordered the meeting to be convened of three Secured Creditors (including Sicom Limited) of the applicant.... It is accordingly ordered that let notice be issued to said Sicom Limited (at the address to be provided by applicant) returnable on 19.01.2009 and pending the hearing and final disposal of this application and the proceedings for sanction of the said scheme of compromise, Sicom Limited, one of the secured creditors of the applicant, is restrained from taking possession of any property or assets of the applicant Company in exercise of authority under Section 29 of the SFC Act on condition that the applicant shall not create any interest or encumbrance or charge, in any manner, over the assets and property until finalization of Scheme under Section 391 of the Act and status quo of all assets and property shall be maintained. 2.10 THE Company claims that on 4.2.2009 the meeting was held as per the order dated 26.12.2008 and in the said meeting the scheme proposing reconstruction of debts was approved, with certain modifications (as compared to draft scheme), by the statutory majority, with the sole dissenting voice of SICOM Ltd. (hereinafter referred to as 'SICOM' or 'objector') who raised objection against the Scheme and declared that the scheme was not acceptable to it and that it would oppose the scheme., if and when presented for sanction. 2.11 In the meanwhile, the application came up for further hearing on the returnable date, however, the opponent No. 1 SICOM did not attend the hearing on 19.1.2009 hence, it was adjourned to 23.1.2009. 2.12 In the interregnum, on 16.1.2009, SICOM issued another Notice to the applicant recalling the entire principal amount together with interest. 2.11 In the meanwhile, the application came up for further hearing on the returnable date, however, the opponent No. 1 SICOM did not attend the hearing on 19.1.2009 hence, it was adjourned to 23.1.2009. 2.12 In the interregnum, on 16.1.2009, SICOM issued another Notice to the applicant recalling the entire principal amount together with interest. 2.13 On 23.1.2009, the said objector opposed the application by putting on record its affidavit-in-reply submitting inter alia that the application under Sec. 391(6) was not maintainable and that it was not in favour of the Scheme. 2.14 Before the next date for hearing i.e. 30.1.2009 the objector issued another notice dated 29.1.2009 stating, inter alia, therein:- 1..... 2..... 3.....Under the circumstances, we have decided to take over possession of the assets mortgaged-hypothecated by you to our favour and to sell the same for recovery of our dues as mentioned in our recall notice dated 16th January, 2009.... 4..... 2.15 During the proceeding and hearing of this application, the Court has been informed that on 29.1.2009 the objector has filed application u/S. 19 r/w. S. 17 of the RDB Act and has put the proceedings in motion before the Tribunal [hereinafter referred to as DRT] at Mumbai. 2.16 THE applicant has claimed that during the meeting on 4.2.2009 the statutory majority accepted/approved the scheme. After the acceptance of the Scheme by the statutory majority, as prescribed u/S. 391 of 1956 Act, the Company has presented a Company petition No.34 of 2009 in Company Application No.648 of 2008 and it has, thereby, submitted the scheme for sanction by the Court which is pending, after admission. 2.17 In the backdrop of the aforesaid facts, the objector is opposing this application under Section 391(6) and the applicant is praying for the reliefs, pending the consideration of the scheme by the Court. 2.18 Before adverting to the rival contentions, it is necessary to record certain other facts-details which have been urged during the hearing; (a) THE position of outstanding/ dues qua all the 3 Secured Creditors (as on the cut-off date i.e. 31.7.2008 (as per the scheme) and as on the date of meeting (i.e., as on 4.2.2009) is thus:- Amounts owed to Secured Creditors (b) THE total value of the credit, on percentage basis, of SICOM Ltd is 23.78% of EXIM Bank is 20.44% and of AXIS BANK is 55.78%. (c) At present the Company is a going concern. Mr. M. J. Thakore, learned Senior Counsel with Mr. A. S. Vakil has appeared for the Company and Mr. S. Soparkar, learned Senior Counsel with Mr. S. A. Mehta has appeared for SICOM Ltd. Mr. M. H. Joshi, learned Senior Counsel with Mr. S. M. Singhi has appeared for EXIM Bank and Mr. A. L. Shah, Advocate, has appeared for AXIS Bank. 3. MR. Thakore, learned Counsel submitted that while the Scheme proposed by the Company is under consideration, it is necessary that any prejudice may not be caused which may frustrate the scheme and that if the proceedings before the Tribunal are allowed to continue, serious prejudice will be caused to the applicant and the Scheme would be rendered only academic or it will be totally frustrated. He also submitted that the provisions under Sections 391 to 394 of 1956 Act confer a right in favour of the Company and the creditors to consider and accept a Scheme, inter alia, for restructuring its debt and such a scheme would be binding on all the Creditors/Members/ Official Liquidator as the case may be, if after its acceptance by the statutory majority creditors or members, the Court also sanctions it and that therefore it is but essential that any action by solitary or minority objector may not be allowed to nullify the Scheme. MR. Thakore, urged that the objector may, therefore, be restrained from proceeding further with the application under Section 19 of RDB Act pending before the DRT and/or with the action pursuant to the notice under SFC Act. 4.1 Opposing the said submissions and the prayer of the applicant, MR. Soparkar, learned Counsel for the objector submitted that SICOM has a statutory right under Section 29 of SFC Act to take steps to recover its dues and/or it also has a right to prefer application under Section 19 of RDB Act, therefore, its action under Section 29 of SFC Act and/or the proceedings before the DRT under RDB Act cannot and need not be stayed. 4.2 MR. 4.2 MR. Soparkar, learned senior Counsel further submitted that the RDB Act and/or the SFC Act override the 1956 Act, hence once an action under SFC Act is initiated and/or the proceedings under RDB Act are instituted, then an application under Sections 391 of 1956 Act would not be maintainable and the Company Court will not have jurisdiction to entertain such application and that therefore as a corollary the application under sub- Section (6) of Section 391 of 1956 Act also would not be maintainable. 4.3 He also submitted that the Company Court does not have power u/ S. 39-1(6) to injunct the FIs from taking action u/S. 29 of SFC Act and/or to restrain the DRT from adjudicating the application u/S. 19 of RDB Act. He submitted that assuming that application under Section 391 is maintainable despite the pendency of S. 19 application before the DRT and/or despite the proposed action u/S. 29 of SFC Act and that the Company Court has power to stay either the proposed action or the proceedings then in that event also such discretionary power should be exercised judiciously and only after very close scrutiny of the facts of each case. In his submission, facts of present case do not warrant exercise of such power and the Court is not bound to mechanically stay the proceedings of application under Section 19 of RDB Act or the action under Section 29 of SFC Act. He also submitted that Sections 17 to 19 of RDB Act and 29 of SFC Act would prevail over Section 391(6) and the statutory right under said provisions cannot be nullified by application u/S. 391 (l)and 391(6) of 1956 Act. He also submitted that the role and jurisdiction of the Company Court under Section 391 of 1956 Act is only peripheral and supervisory and that therefore the Court cannot decide about justifiability or otherwise of Objector's action. 4.4 MR. Soparkar also advanced alternative submission and urged that if the Court holds that the application is maintainable and also decides to stay the proceedings or the proposed action, then appropriate conditions may be prescribed, i.e. unconditional stay may not be granted. He relied on the below mentioned judgments in the case between; 1. UP Finance Corporation v. GEM CAP (India) Pvt. Ltd. and Others reported in 1993 (2) SCC 299 ; 2. He relied on the below mentioned judgments in the case between; 1. UP Finance Corporation v. GEM CAP (India) Pvt. Ltd. and Others reported in 1993 (2) SCC 299 ; 2. U.P. Financial Corporation and Ors v. Naini Oxygen and Acetylene Gas Ltd. reported in (1995) 2 SCC 754 3. The State Financial Corporation and Another v. Jagdamba Oil Mills and Anr. reported in AIR 2002 SC 834 4. Hindustan Lever and Another v. State of Maharashtra and Another reported in 2004 (9) SCC 438 ; 5. M/s. Bakemans Industries Pvt. Ltd. v. M/s. New Cawnpore Flour Mills and Ors. reported in 2008 (6) ALL M.R. 463 6. Tata Motors Ltd. v. Pharmaceutical Products of India Ltd. and Another reported in 2008 (7) SCC 619 ; 7. In respondent: IMP Powers Ltd. reported in 2008 (142) CC 481. 8. Judgment of the Hon'ble Apex Court in Civil Appeal No.7128 of 2008 between Union of India and Ors. v. SICOM Ltd. and Anr. 9. An order in Company Application No.35 of 2005 passed by High Court of Judicature at Bombay in the matter between Meta Strips Limited v. Economic Development Corporation. 4.5 Per contra, MR. Thakore, learned senior Counsel for the applicant in rejoinder submitted that the family of Section 391 to Section 394 of 1956 Act operate in a field different from the field of operation of S. 19 of RDB Act and Section 29 of SFC Act and the scope of 1956 Act is entirely different, hence there is no scope of conflict or any occasion for one statute prevailing over the other. In reply to a query, it was submitted that it will not be feasible for the applicant to offer any further security. He, however, submitted that in view of the provisions under Section 391 to 394 of 1956 Act, one of the secured creditors should not be allowed, at the cost of other secured creditors, to steal a march over other secured creditors more particularly when Objector does not have exclusive charge over the assets. He, however, submitted that in view of the provisions under Section 391 to 394 of 1956 Act, one of the secured creditors should not be allowed, at the cost of other secured creditors, to steal a march over other secured creditors more particularly when Objector does not have exclusive charge over the assets. 4.6 MR Thakore submitted that application under Section 391 is maintainable despite the action under SFC Act and/or the pendency of application before DRT, and consequently the application u/S. 391(6) for interim relief would also be maintainable and the Company Court can stay the action under SFC Act and/ or the proceedings launched by objector before the Tribunal under RDB Act and that the provision under Section 391(6) of 1956 Act cannot be viewed independently since it is an enabling provision in aid of S. 391(1) of 1956 Act. 4.7 Lastly, he submitted that the Objector has tried to over reach the process made available under Section 391 to 394 of 1956 Act by legislature. So as to support his submissions, he relied upon the judgments in the following cases; 1. Municipal Council, Palai v, T.J. Joseph reported in AIR 1963 SC 1561 . 2. Municipal Corporation of Delhi v. Shiv Shanker reported in 1971(1) SCC 442 . 3. Harish Kapoor and Ors. v. Zafarbhai Mohmadbhai Chhatpar reported in (1989) 65 CC 163. 4. Maharastra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. and Anr. reported in (1993) 2 SCC 144 . 5. Gujarat Kamdar Sahakari Mandal and Ors. v. Ramkrishna Mills Ltd. reported in 1998 (92) comp cases 692; 6. Allahabad Bank v. Canara Bank 2000 (4) SCC 406 ; 7. Arvind Mills Ltd., In re. reported in [2002] 110 CC 539. 8. Arvind Mills Ltd., In re. reported in [2002] 111 CC 118. 9. Deepika Leasing and Finance Ltd. v. Deepika Chit Fund (P) Ltd. reported in (2005) 3 Comp L.J. 51. 10. Shree Rama Multitech Ltd. In re: reported in [2006] 131 CC 209. 11. Core Health Care Ltd. In re. [2007] 79 SCL 47. 12. ARCIL v. Ashok Organik and Ors. reported in (2008) 3 Comp.LJ. 61. 13. Chembra Orchard Produce Ltd. and Ors. v. Regional Director of Company Affairs and Anr. reported in (2009) 1 Comp LJ 1 (SC). 14. ICIC1 Ltd. v. State of Gujarat in SCA No.6324 of 2000 (decided on 8th December, 2000). 15. [2007] 79 SCL 47. 12. ARCIL v. Ashok Organik and Ors. reported in (2008) 3 Comp.LJ. 61. 13. Chembra Orchard Produce Ltd. and Ors. v. Regional Director of Company Affairs and Anr. reported in (2009) 1 Comp LJ 1 (SC). 14. ICIC1 Ltd. v. State of Gujarat in SCA No.6324 of 2000 (decided on 8th December, 2000). 15. he also placed reliance on various orders passed by this Court in various applications under Section 391(1) wherein, this Court has, ad interim relief granted stay of the proceedings by bank or financial institution. 16. He also referred to the judgments/orders passed by the High Court of Kerala in (a) Misc. Application No.47 of 2000, (b) in the matter of B.P.L. Ltd. being Company Petition No. 13 of 2005, (c) Misc. Application No.84 of 2004 preferred by B.P.L. Ltd., (d) in Company Appeal No.9 of 2005 against order in Misc. Civil Application No.84 of 2004, (e) in Company Appeal No.1 of 2006 against the order in Company Petition No. 13 of 2005, and (f) in Company Appeal No.2 of 2006 against the judgment in Misc. Civil Application No.84 of 2004. 4.8 MR. Joshi, learned senior Counsel while adopting the submissions of MR. Thakore, submitted that the Tribunal only adjudicates what is claimed to be due and the RDB Act in general or Section 19 of RDB Act in particular does not grant any right but it merely provides a mode of recovery and by virtue of RDB Act no contractual or statutory rights are granted. He also submitted that what SICOM claims, in effect, is exclusion from the provision of law and immutability of its contractual rights. He relied on the decisions reported in (i) Sayed Aqueel Arif v. University of Pune and Others reported in 2003 (12) SCC 724, (ii) Jay Engineering Works Ltd. v. Industry Facilitation Council reported in 2006 (8) SCC Page 677, and (iii) Harish Court. Raskapoor and Others v. Jaferbhai Mohmedbhai Chhatpar reported in 1989 (65) CC 163. 4.9 MR. AL Shah for AXIS Bank submitted that after the scheme is sanctioned by the Court, a novatio occurs and a new debt is substituted for earlier one. He also adopted submissions made on behalf of the applicant-Company and submitted that the provisions under Section 391 should not be allowed to be frustrated. 4.9 MR. AL Shah for AXIS Bank submitted that after the scheme is sanctioned by the Court, a novatio occurs and a new debt is substituted for earlier one. He also adopted submissions made on behalf of the applicant-Company and submitted that the provisions under Section 391 should not be allowed to be frustrated. He also submitted that provision under Section 391 and Section 19 of RDB.Act or Section 29 of SFC Act can exist together. 4. BEFORE proceeding further it needs to be mentioned that in light of the elaborate submissions and rival contentions by both sides regarding RDB Act and Section 19 proceedings it was enquired by the Court about the absence of any specific reference or prayer about RDB Act or application u/ S. 19, and in reply reliance was placed on the part of prayer which runs thus .... Company be restrained from taking any legal proceedingsagainst the applicant Company including .... so as to urge that the prayer for said relief stands covered in any legal proceedings. Further, no objection on this ground is raised by SICOM and actually its Counsel has made elaborate submissions with reference to scope of Section 391(6) vis-a-vis Sections 17 to 19 and 34 of RDB Act. Hence, it is deemed necessary to deal with both i.e. SFC Act and RDB Act. It also deserves to be mentioned that the limited nature and scope of this application u/S.391(6) of 1956 Act does not call for, at this stage, scrutiny of the merits of the proposed scheme. It would be, thus, not necessary to refer to the referred judgments dealing with the scope of application under Section 391(1). Re: MAINTAINABILITY 5. THIS application under Section 391(6) has been opposed by the objector SICOM mainly on the ground that it has not accepted the scheme and it stands outside the proceedings under Sections 391 and 394, consequently its statutory right to proceed to recover its dues cannot be nullified by presenting a scheme proposing to restructure the debt. 7.1 The objector has drawn support mainly from the provision under Sections 17 and 19 and 34 of the RDB Act and Sections 29 and 46-B of SFC Act, and has contended that Section 34 of RDB Act and Section 46-B of SFC Act give over-riding effect to the provisions of RDB Act and the SFC Act. 7.1 The objector has drawn support mainly from the provision under Sections 17 and 19 and 34 of the RDB Act and Sections 29 and 46-B of SFC Act, and has contended that Section 34 of RDB Act and Section 46-B of SFC Act give over-riding effect to the provisions of RDB Act and the SFC Act. Reliance is also placed on the judgment of the Hon'ble Supreme Court in the case between Allahabad Bank and Canara Bank and another, reported in (2000) 4 SCC 406 and also on the judgment of the High Court of Bombay in the matter of Re: IMP Powers Ltd. 7.2 The contention regarding maintainability of application under Sections 391 and 394 may be cleared first. Actually, after having been confronted with the judgment of this Court (Coram: Hon'ble Mr. Justice R.S.Garg), Mr. Soparkar. Senior Counsel did not carry this contention further. THIS Court has, in the judgment in the case of Re. Core Health Care Limited [(2007) 79 SCL 47], after considering the judgment of Hon'ble Apex Court in the case of Allahabad Bank, already held that : - One of the objections raised by the objectors is that the objectors have filed their case before the Debt Recovery Tribunal, therefore, this Court would have no jurisdiction to consider the Scheme and by grant of the Scheme as the objectors are to be non-suited by the Debt Recovery Tribunal, present proceedings are illegal. The petitioners have placed their reliance upon the judgment of the Supreme Court in the matter of Allahabad Bank v. Canara Bank and another, [ AIR 2000 SC 1535 ]. So far as the right of the objector to proceed with the case before the Debt Recovery Tribunal is concerned, it would certainly stand if the Scheme proceedings are not approved by the High Court. Core certainly would have a right to take out proceedings for compromise. If the proceedings ultimately fail and the Scheme is not approved by the High Court, then right to proceed with the proceedings before the Debt Recovery Tribunal would stand, but it cannot be said by any stretch of imagination that Scheme proceedings cannot be approved by the High Court in view of pendency of the proceedings before the Debt Recovery Tribunal. Judgment in the matter of Allahabad Bank [supra] was in altogether different context, there, the Supreme Court was not considering approval, sanction or rejection of the Scheme. It cannot be denied that in a pending litigation, a borrower can come forward for settlement and it would always be open to the lender to accept the terms of the settlement. If such authority is available to a borrower, then he can always come forward with a Scheme for compromise which is being offered to the creditors individually so also jointly. However, I would agree with the petitioner that if an individual lender can settle, then, there is no reason to hold that the lenders collectively cannot enter into the Scheme of compromise.(Emphasis supplied) 7.3 Further, similar view has also been taken by the High Court of Kerala in the matter of M/s. BPL Ltd. (MCA No.84/2004 d/o 14.03.2005). 7.4 It has, thus, been held that the application under Sections 391 read with Section 394 would be maintainable despite the presentation and pendency of an application under Section 19 of the RDB Act. The judgment in the case of Core Health (Supra) is binding on me, hence, I shall, for the purpose of considering this application, proceed on the premise that the application under Section 391/ 394 is maintainable although the application under Section 19 of the RDB Act is pending. 7.5 The question which next arises is about maintainability and scope of application under Section 391(6) of 1956 Act. The application u/S. 391(6) is meant for incidental and ancillary relief during the consideration of the application under Section 391(1) r/w Section 394. On reading of the said Sections, it emerges that the Company or any creditor or shareholder/member of the Company or the Official Liquidator (in case of Company under winding up) can present, by way of application under Section 391, diverse type of compromise or arrangement i.e. a scheme for sanction by the Court. Thus, in view of the wide scope of the provisions under Section 391, its arena is not restricted only to the Scheme for restructuring debt. Further, Section 391(6) confers incidental power on the Company Court to pass appropriate interim order after application u/S. 391(1) is presented. Thus, in view of the wide scope of the provisions under Section 391, its arena is not restricted only to the Scheme for restructuring debt. Further, Section 391(6) confers incidental power on the Company Court to pass appropriate interim order after application u/S. 391(1) is presented. Hence, it cannot be denied that after an application under Section 391 of 1956 Act is submitted and in pursuance of such application, a Scheme is presented for sanction by the Court, an application under Section 391(6) would be, if circumstances so require, maintainable. 7.6 However, the matter concerning the scope of such application would be a separate issue and it stands on different footing because the question which arises is whether the said provision can halt the action of Financial Corporation u/S. 29 of SFC Act or the proceedings u/S. 19 of RDB Act. 6. BEFORE adverting to the said issue. it is pertinent to note that under Section 391(6) the relief of stay against the commencement and continuation of suit and proceedings is not available automatically or mechanically upon mere presentation of an application but it is left to the discretion of the Court and the Court has to decide each case judiciously and on its own facts and merits. Re: The 1956 Act and the RDB Act For the sake of convenience, the rival contentions regarding the RDB Act may be considered first. 9.1 It has been urged on behalf of the applicant that sub-Section (6) of Section 391 of the 1956 Act is in aid of Section 391(1), hence, during pendency of an application under Section 391/ 394, the stay of proceedings under Section 19 read with Section 17 before the DRT should be granted. In this context it is necessary to note at this stage that in view of the scope of Section 391(1), application(s) seeking sanction in respect of diverse type of Schemes e.g. for amalgamation/merger or for restructuring capital or by way of any other compromise or arrangement, can be made and the Scheme for reconstruction of debt would be only one out of the diverse type of Schemes which can be submitted under Section 391(1). 9.2 Section 391(6) empowers the Company Court to stay, in appropriate case(s), the commencement or continuation of any suit or proceedings against the Company, on such terms that the Court may think fit, until the Scheme is considered and the application is finally disposed of. In this backdrop the earlier mentioned issue, whether the power u/S. 391(6) would touch the proceedings before DRT and whether the same can be stayed by Company Court, would arise. 9.3 The intention and policy of the legislature with regard to Section 391(6) of the 1956 Act is to enable the Company Court to consider the scheme(s), and thereby the desire of the statutory majority, and to independently decide what is in the best interest of the Company and to empower the Company Court to stay, when it may be necessary and justified, the commencement and continuation of such suits and proceedings on such terms and conditions as may be necessary and appropriate, until the application is disposed of. 9.4 However, the Legislature, seems to have also found it necessary and appropriate to address the concern for the recovery of the dues of the FIs and consequently the legislature found it necessary to carve out an exception from the aforesaid position so as to take care of the situation involving Scheme concerning the dues of the FIs which may affect its recovery. Hence, upon considering and noticing the ineffectiveness and inadequacy of existing modes, avenues and procedure for recovery of the dues of FIs, the Legislature enacted the RDB Act and also provided the shield of Section 34 therein and made the statute more comprehensive in 2000 by amending it and including, by virtue of Section 19(19), the obligation to disburse the sale proceeds in accordance with the provisions of Section 529A of the 1956 Act. 9.5 The RDB Act provides, by virtue of Sections 17 to 19, a special Forum viz. DRT, with exclusive jurisdiction and mechanism, for the Banks/FIs to recover the debts expeditiously and without any hindrance or obstacles. This is reflected in the Statement of objects and reasons wherein, it is stated :- Banks and Financial Institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. DRT, with exclusive jurisdiction and mechanism, for the Banks/FIs to recover the debts expeditiously and without any hindrance or obstacles. This is reflected in the Statement of objects and reasons wherein, it is stated :- Banks and Financial Institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. The existing procedure for recovery of debts due to the Banks and Financial Institutions has blocked a significant portion of their funds in unproductive assets, the value of which deteriorated with the passage of time. .... An urgent need was, therefore, felt to work out a suitable mechanism through which the dues to the banks and financial institutions could be realised without delay. 9.6 Thus, as a consequence of the provisions under Sections 391(1) and 391(6) of 1956 Act on1 one hand and Sections 17 to 19 of RDB Act on the other hand two parallel proceedings in two judicial for a may come face-to- face when a bank or FI may initiate any recovery proceedings against a debtor Company while a scheme (more particularly in case of Scheme for debt restructuring) is submitted under Section 391/394 and is under consideration before the Company Court or when FI's application before the DRT is pending against a debtor Company and such Company submits a scheme (particularly scheme for restructuring debt) under Sections 391/ 394 for the consideration by the Court and also prefers an application under Section 391(6) of 1956 Act. 9.7 At such times competing situation and/or overlapping or conflict between the two proceedings under the two statutes arises, i.e. the question as to which one can have precedence over the other, arises. It would be so for the reason that the creditor FI would want its application before the DRT decided expeditiously and as per the Scheme and time frame provided under Section 19, whereas the debtor Company would urge that in exercise of the power under Section 391(6) the Company Court may stay the commencement of suit or proceedings while the application and thereby the Scheme, under Section 391 read with Section 394 can be examined by the Company Court. 9.8 The Legislature has, so as to make its intention clear and to emphasise the aforesaid object of the RDB Act, made provision by incorporating Section 34 in RDB Act which, ordinarily, would take care of such situation. 9.8 The Legislature has, so as to make its intention clear and to emphasise the aforesaid object of the RDB Act, made provision by incorporating Section 34 in RDB Act which, ordinarily, would take care of such situation. By this non-obstante clause, the provisions of RDB Act, including Sections 17 to 19 have been granted overriding effect. The said provision reads thus:- 34. Act to have over-riding effect._ (1) Save as provided under sub-Section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. (2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984) [, the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986). 9.9 The extent of the primacy that the legislature intended to confer on the RDB Act and particularly on Sections 17 to 20, 25 and 28 thereof is evident and becomes clear also from the conjoint reading of the provisions under Sections 18 and 17 which, by cumulative effect, mandate that the DRT shall have plenary and exclusive jurisdiction. The said Sections read thus:- Section 18. Bar of Jurisdiction. - On and from the appointed day, no Court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority(except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17. Section 17. Jurisdiction, powers and authority of Tribunal. - (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the Banks and Financial Institutions for recovery of debts due to such Banks and Financial Institutions. (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act. (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act. 9.10 Thus, as per the Section 18 no Court or authority will, after enactment of RDB Act, have any power or any authority and any Court or authority will not be entitled to exercise any authority or power in the matters pertaining to and incidental and/or ancillary to the recovery of debts of FIs when any application under Section 19 r/w Section 17 is being considered by the DRT. Further, Section 19 prescribes, in detail, exhaustive procedure for deciding the application. The procedure required to be followed for this purpose has been exhaustively laid down in Sections 17 to 20 and Sections 25 to 28 which, conjointly and collectively constitute a complete code in itself. Therefore, a conjoint reading of Sections 17, 18 and 19 read with Sections 25 to 28 of RDB Act paints clear picture of the policy and intention of legislature which is highlighted by Section 34 of the RDB Act. 9.11 In light of the provisions under Section 34 read with Sections 18 and 17, the objector SICOM would submit that the RDB Act will have overriding effect over 1956 Act while the applicant counters claiming that the RDB Act can have overriding effect only in the event of inconsistency which could arise if the statues operate in the same field. It is claimed that the questions which ought to be addressed to determine whether there is any inconsistency between the statutes, as held by the Hon'ble Apex Court in the case between Kishor Khemchand Goyal v. State of Gujarat and Others in (2003) 12 SCC 274 , are : (a) whether there is a direct conflict between two provisions, (b) whether the Legislature intended to lay down any exhaustive mode in respect of the subject matter replacing the earlier law, and (c) whether the two laws occupy the same field. Reference is also made to the judgment of the Hon'ble Apex Court in the case between Municipal Council v. T. J. Joseph (supra) and the judgment in the case between Municipal Corporation of Delhi v. Shivshankar (supra). Reference is also made to the judgment of the Hon'ble Apex Court in the case between Municipal Council v. T. J. Joseph (supra) and the judgment in the case between Municipal Corporation of Delhi v. Shivshankar (supra). 9.12 It is, thus, appropriate at this stage to take into consideration the diverse situations with regard to the overriding effect of one statute over another and/or the effect of non- obstante clause in one of the two statutes or in both statutes, which have been examined by the Apex Court and other High Court. 9.13(a) In the judgment in the case between Jay Engineering Works Ltd. and Industry Facilitation Council and Anr. [ (2006) 8 SCC 677 ] the Hon'ble Apex Court considered the situation between Sick Industrial Company's Special Provisions Act, 1985 (SICA for short) and the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1993. After comparing the provisions under the said two statutes, the Apex Court held that:- 24. Both the Acts operate in different fields. If the 1985 Act is attracted, the question of its giving way to the 1993 Act would not arise. 28. Both the Acts contain non- obstante clauses. Ordinary rule of construction is that where there are two non-obstante clauses, the latter shall prevail. But it is equally well settled that ultimate conclusion thereupon would depend upon the limited context of the statute. 31. The endeavour of the Court would, however, always be to adopt a rule of harmonious construction. (emphasis supplied). 9.13(b) In the said judgment, the Apex Court also referred to para 41 and 49 from the judgment in the case between NGEF Ltd. v. Chandra Developers (P) Ltd. [ (2005) 8 SCC 219 ], wherein it is held that:- 41. It is difficult to accept the submission of the learned Counsel appearing on behalf of the respondents that both the Company Court and BIFR exercise concurrent jurisdiction. If such a construction is upheld, there shall be chaos and confusion. A Company declared to be sick in terms of the provisions of SICA, continuous to be sick unless it is directed to be wound up. Till the Company remains a sick Company having regard to the provisions of sub-Section (4) of Section 20, BIFR alone shall have jurisdiction as regards sale of its assets till and order of winding up is passed by a Company Court. 49. Till the Company remains a sick Company having regard to the provisions of sub-Section (4) of Section 20, BIFR alone shall have jurisdiction as regards sale of its assets till and order of winding up is passed by a Company Court. 49. Section 32 of SICA contains a non obstante clause stating that, provisions thereof shall prevail notwithstanding anything inconsistent with the provisions of the said Act and of any rules or schemes made thereunder contained in any other law for the time being in force. It would bear repetition to state that in the ordinary course although the Company Judge may have the jurisdiction to pass an interim order, in exercise of its inherent jurisdiction or otherwise directing execution of a deed of sale in favour of an applicant by the Company sought to be would up, but keeping in view the express provisions contained in sub-Section (4) of Section 20 of SICA such a power, in our opinion, in the Company Judge is not available. (Emphasis supplied) 9.13(c) In M/s. Bakemans Industries Pvt. Ltd. v. M/s. New Cawnpore Flour Mills and Ors., [2008 (6) ALL Mr. 463] the Apex Court held that:- 39. The 1951 Act indisputably is a special statute. If a Financial Corporation intends to exercise a statutory power under Section 29 of the 1951 Act, the same will prevail over the general powers of the Company Judge under the Companies Act. (Emphasis supplied) 9.13(d) In the judgment in the case between Ashok Organic Industries Ltd. v. ARCIL (supra) the High Court considered maintainability of an application seeking sanction for the scheme of arrangement when reference before BIFR was pending, and observed that:- 15. In any event Section 32 (the non obstante provision) of the SICA 1985 will have the effect of SICA 1985 overriding Sections 391-394 of the companies Act, 1956. 18. Considering the above we have to hold that once the industrial Company makes a reference under Section 15 of the SICA, the Company Court would have no jurisdiction for sanctioning the scheme of arrangement of compromise with its creditors and shareholders and neither will it have jurisdiction to take cognisance of such an application during the pendency of the reference. (Emphasis supplied). (Emphasis supplied). 9.13(e) In the case between Tata Motors Ltd. v. Pharmaceutical Products of India Ltd. and Anr, the Apex Court held that:- 19.....The provisions of a special Act will override the provisions of a general Act. A later of it will override an earlier Act. 1956 Act is a general Act. It consolidates and restates the law relating to companies and certain other associations. It is prior in point of time to SICA. (Emphasis supplied). Whenever any inconsistency is seen in the provisions of the two Acts, SICA would prevail. SICA furthermore is a complete code. It contains a non- obstante clause in Section 32. 20. SICA is a special statute. It is a self contained Code. The jurisdiction of the Company Judge in a case where reference had been made to BIFR would be subject to the provisions of SICA. 22..... It is also not possible to harmonize the provisions of Sections 391 to 394 of the 1956 Act with the provisions of SICA. 9.13(f) The Apex Court considered the effect of non-obstante clause and overriding effect between Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA' for short) and SFC Act in the case between Maharashtra Tubes Ltd. and State Industrial Investment Corporation of Maharashtra Ltd., (supra). The Hon'ble Apex Court considered the scope and effect of S. 29 and/or 31 of SFC Act and S. 22 of SICA in the backdrop of the issue whether in a case where an industrial concern makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to meet its obligations under the terms of any agreement with the Financial Corporation, such as the respondent herein, can the latter take recourse to Sections 29 and/or 31 of the State Financial Corporations Act, 1951 (hereinafter called the 1951 Act') notwithstanding the bar of Section 22 of the SICA. The Apex Court has observed that:- '5.....It is thus clear from the provisions of this law that its primary objective is to provide an impetus to industrialisation by providing through a statutory Corporation financial assistance to industrial concerns and incidental power to take over is given and summary procedures have been laid down by Sections 29 and 31 for the realisation of its dues from defaulting industrial concerns. The power conferred by Section 29 and the remedy provided in Section 31(1) is not the underlying object and purpose of the statute, the real objective of the law is to create an instrumentality through which financial assistance can be extended to deserving entrepreneurs. This is the main purpose, scope and object of this special law. 6. On the other hand, the 1985 Act was enacted, as its preamble manifests, with a view to timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measures through appropriate schemes and their expeditious implementation.... 7. It will be seen from the above discussion that both the 1951 Act and the 1985 Act are special statutes, each having a different objective, the emphasis in the case of the former being on giving of financial assistance to entrepreneurs for setting up industries while in the case of the latter it being to revive or rehabilitate industries which have on account of economic or other related reasons gone sick. No doubt the latter Act also contemplates giving of financial assistance for revival or rehabilitation of a sick industrial undertaking but that is by way of a remedy or as a measure at revival of the sick unit.(Emphasis supplied) After considering the various aspects, and particularly the objectives and the field of operation of the two statutes and the concept of earlier and latter Statute and the non-obstante clause, the Hon'ble Apex Court held; 9. Having reached the conclusion that both the 1951 Act and the 1985 Act are special statutes dealing with different situations ---- the former providing for the grant of financial assistance to industrial concerns with a view to boost up industrialisation and the latter providing for revival and rehabilitation of sick industrial undertakings, if necessary, by grant of financial assistance, we cannot uphold the contention urged on behalf of the respondent that the 1985 Act is a general statute covering a larger number of industrial concerns than the 1951 Act and, therefore, the latter would prevail over the former in the event of conflict. Both the statutes have competing non obstante provisions. Both the statutes have competing non obstante provisions. Section 46-B of the 1951 Act provides that the provision of that statute and of any rule or order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force whereas Section 32(1) of the 1985 Act also provides that the provisions of the said Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law. Section 22(1) also carries a non obstante clause and says that the said provision shall apply notwithstanding anything contained in Companies Act, 1956 or any other law. The 1985 Act being a subsequent enactment, the non obstante clause therein would ordinarily prevail over the non obstante clause found in Section 46-B of the 1951 Act unless it is found that the 1985 Act is a general statute and the 1951 Act is a special one. In that event the maxim generalia specialibus nonderogant would apply. But in the present case on a consideration of the relevant provisions of the two statutes we have come to the conclusion that the 1951 Act deals with pre-sickness situation whereas the 1985 Act deals with the post-sickness situation. It is, therefore, not possible to agree that the 1951 Act is a special statute vis-a-vis the 1985 Act which is a general statute.Both are special statutes dealing with different situations notwithstanding a slight overlap here and there, for example, both of them provide for grant of financial assistance though in different situations. We must, therefore, hold that in cases of sick industrial undertakings the provisions contained in the 1985 Act would ordinarily prevail and govern. (Emphasis supplied) It is pertinent that in this case after noticing that both special statutes dealt with different situations, the Apex Court held that 1985 being subsequent enactment would prevail over non- obstante clause of earlier statute i.e. of 1951 Act. 7. SO far as the RDB Act is concerned, while considering the provisions under Section 446 and Section 537 of 1956 Act vis-a-vis the RDB Act in the case between Andhra Bank and Canara Bank, the Apex Court held that even if the 1956 Act is considered to be a special statute, it is the RDB Act which will prevail in the event of inconsistency. 10.1 Subsequently, the High Court of Bombay in Re: IMP Powers Ltd v. Respondent, in light of the judgment of the Hon'ble Apex Court in Allahabad Bank's case,' has held that:- 8. The submission of learned Counsel for the petitioner is that the powers of the High Court under Sections 391 and 394 are untrammelled by the provisions of the RDB Act because Section 391 does not make a distinction between classes of creditors. Hence, it is urged that under Section 394, the High Court has the power to sanction a compromise or arrangement which has the effect of modifying any contract and once the contract with the secured creditors is so modified, the Debts Recovery Tribunal would necessarily be bound to enforce the terms of the modified arrangement. The submission cannot be accepted for more than one reasons. First and foremost, in the judgment in Allahabad Bank v. Canara Bank [2000] 101 Comp Cas 64 the Supreme Court affirmed the view taken by several High Courts which was to the effect that the Companies Act, 1956 is a general enactment which will give way to the special provisions contained in the RDB Act which is enacted to ensure speedy and expeditious adjudication and realisation of debts due to banks and Financial Institutions. Secondly, in the exercise of powers conferred by Section 17 of the RDB Act, the Debts to adjudication, execution and working out priorities. Thirdly, the process of adjudication into the debt due to Induslnd Bank has already been set in motion by the institution of the proceedings under the RDB Act. The sanctioning of the scheme under Sections 391 to 394 will unquestionably dilute the full and plenary powers conferred under the Tribunal under the RDB Act to adjudicate upon the claim of the bank as presented. Fourthly, the exercise of powers of the Company Court in matters which fall within the ambit of the jurisdiction of the Debts Recovery)' Tribunal, would clearly amount to curtailing the jurisdiction of the Tribunal to adjudicate upon the claim of recovery submitted before the Tribunal, (emphasis supplied) JUDGMENT K.M. THAKER, J. 1. BY this application under Section 391(6) of the Companies Act. BY this application under Section 391(6) of the Companies Act. 1956 (hereinafter referred to as 'the 1956 Act'), the applicant Company has prayed for below-mentioned relief:- (A) That pending the outcome of the meeting of the secured creditors of the Applicant Company, ordered to be convened on 4th February 2009 at 11.30 AM at Mumbai and pending the hearing and final disposal of the proceedings for sanction of the said scheme of compromise, SICOM Limited, one of the secured creditors of the Applicant Company be restrained from taking any legal proceedings against the Applicant Company, including, acting in any manner whatsoever u/S. 29 of the State Financial Corporations Act, 1951 including its notice dated 18th July 2008.... Re:- FACTS 2. THE relevant facts leading to this application are as follows:- 2.1. THE applicant is a Limited Company (hereinafter referred to as the Company) incorporated and registered as such under the 1956 Act. THE Company is engaged, inter alia, in the business of manufacturing and sale of high quality denim fabrics. 2.2. THE Company appears to have availed diverse types of loans from different Banks/Financial Institutions [FIsfor short] which include Axis Bank, EXIM Bank and SICOM Ltd. THE said Banks/Financial Institutions are banking Company or Financial Institution or Financial Corporation under Recovery of Debts Due to Banks and Financial Institution Act, 1993 [hereinafter referred to as 'RDB Act'] and/or under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereinafter referred to as SARFAESI Act or 2002 Act] and/or under State Financial Corporations Act, 1951 [hereinafter referred to as SFC Act or 1951 Act]. For sake of convenience, the Banks or the Financial Institutions or Corporation are hereinafter referred to as Banks or FIs. 2.3 THE Company, for .the purpose of availing the facility of loans, created charge over various movable/ immovable assets by way of mortgage and/or hypothecation in favour of FIs. It is claimed that earlier mentioned 3 FIs have pari passu charge over the assets of the Company. After some time the Company faltered in repayment of dues to the said FIs. 2.4 It emerges from the record that one of the FIs, viz. SICOM issued a demand notice dated 18.7.2008 calling upon the Company to pay Rs. It is claimed that earlier mentioned 3 FIs have pari passu charge over the assets of the Company. After some time the Company faltered in repayment of dues to the said FIs. 2.4 It emerges from the record that one of the FIs, viz. SICOM issued a demand notice dated 18.7.2008 calling upon the Company to pay Rs. 1,61,74,750/- on or before 25.7.2008 failing which it would be compelled to take actions as may be available in law, including action u/S. 29 of SFC Act. 2.5 About 5 months after the notice, the Company moved an application being Company Application No. 648/2008 under Section 391(1) of 1956 Act. It is declared in the pleadings that the said application was filed on or around 24.12.2008 with following prayer(s):- (A) that a meeting of the secured creditors be convened at Mumbai (where all the secured creditors of the Applicant Company are situated) or at the registered office of Company or at such other place as this Hon'ble Court directs, for the purpose of considering and if thought fit, approving, with or without modification, a scheme of compromise proposed to be made between the Applicant Company and its secured creditors as stated in the Scheme. (B) that directions may be given as to the method of convening, holding and conducting the said meeting and as to the notices and advertisements to be issued in that behalf. 2.6 It emerges that in the background of defaults in making repayments and maintaining the payment of schedule, the Company had contrived a scheme of restructuring debts [hereinafter referred to as the Scheme] and on that ground it preferred the aforesaid application with a prayer for direction to convene the meeting of secured creditors 2.7 An order dated 26.12.2008 was passed in the said Application No. 648 of 2008 directing to convene and hold a meeting of Secured Creditors on 4.2.2009 for considering the proposed arrangement/Scheme. 2.8 After the said order dated 26.12.2008, the Company, on or around 31.12.2008 took out present application, with Judges summons, filed u/S. 391(6) which came to be registered as Company Application No. 1 of 2009. 2.9 THE present application has been preferred mainly on the apprehension that though the meeting (as per the order dated 26.12.2008) was to be held on 4.2.2009, SICOM was likely to take action in pursuance of its notice dated 18.7.2008 against the mortgaged or hypothecated assets. 2.9 THE present application has been preferred mainly on the apprehension that though the meeting (as per the order dated 26.12.2008) was to be held on 4.2.2009, SICOM was likely to take action in pursuance of its notice dated 18.7.2008 against the mortgaged or hypothecated assets. THE Court issued notice and made it returnable on 19.1.2009 with the following ad-interim order passed on 2.1.2009; Present application is filed under Section 391(6) of the Companies Act, 1956 read with Rule 71 of the Companies (Courts) Rules, 1959 seeking injunction and/or stay against Sicom Limited.... This Court (Coram: Hon'ble Mr. Justice K.A. Puj ) has by order dated 26.12.2008 passed in Company Application No.648 of 2008 ordered the meeting to be convened of three Secured Creditors (including Sicom Limited) of the applicant.... It is accordingly ordered that let notice be issued to said Sicom Limited (at the address to be provided by applicant) returnable on 19.01.2009 and pending the hearing and final disposal of this application and the proceedings for sanction of the said scheme of compromise, Sicom Limited, one of the secured creditors of the applicant, is restrained from taking possession of any property or assets of the applicant Company in exercise of authority under Section 29 of the SFC Act on condition that the applicant shall not create any interest or encumbrance or charge, in any manner, over the assets and property until finalization of Scheme under Section 391 of the Act and status quo of all assets and property shall be maintained. 2.10 THE Company claims that on 4.2.2009 the meeting was held as per the order dated 26.12.2008 and in the said meeting the scheme proposing reconstruction of debts was approved, with certain modifications (as compared to draft scheme), by the statutory majority, with the sole dissenting voice of SICOM Ltd. (hereinafter referred to as 'SICOM' or 'objector') who raised objection against the Scheme and declared that the scheme was not acceptable to it and that it would oppose the scheme., if and when presented for sanction. 2.11 In the meanwhile, the application came up for further hearing on the returnable date, however, the opponent No. 1 SICOM did not attend the hearing on 19.1.2009 hence, it was adjourned to 23.1.2009. 2.12 In the interregnum, on 16.1.2009, SICOM issued another Notice to the applicant recalling the entire principal amount together with interest. 2.11 In the meanwhile, the application came up for further hearing on the returnable date, however, the opponent No. 1 SICOM did not attend the hearing on 19.1.2009 hence, it was adjourned to 23.1.2009. 2.12 In the interregnum, on 16.1.2009, SICOM issued another Notice to the applicant recalling the entire principal amount together with interest. 2.13 On 23.1.2009, the said objector opposed the application by putting on record its affidavit-in-reply submitting inter alia that the application under Sec. 391(6) was not maintainable and that it was not in favour of the Scheme. 2.14 Before the next date for hearing i.e. 30.1.2009 the objector issued another notice dated 29.1.2009 stating, inter alia, therein:- 1..... 2..... 3.....Under the circumstances, we have decided to take over possession of the assets mortgaged-hypothecated by you to our favour and to sell the same for recovery of our dues as mentioned in our recall notice dated 16th January, 2009.... 4..... 2.15 During the proceeding and hearing of this application, the Court has been informed that on 29.1.2009 the objector has filed application u/S. 19 r/w. S. 17 of the RDB Act and has put the proceedings in motion before the Tribunal [hereinafter referred to as DRT] at Mumbai. 2.16 THE applicant has claimed that during the meeting on 4.2.2009 the statutory majority accepted/approved the scheme. After the acceptance of the Scheme by the statutory majority, as prescribed u/S. 391 of 1956 Act, the Company has presented a Company petition No.34 of 2009 in Company Application No.648 of 2008 and it has, thereby, submitted the scheme for sanction by the Court which is pending, after admission. 2.17 In the backdrop of the aforesaid facts, the objector is opposing this application under Section 391(6) and the applicant is praying for the reliefs, pending the consideration of the scheme by the Court. 2.18 Before adverting to the rival contentions, it is necessary to record certain other facts-details which have been urged during the hearing; (a) THE position of outstanding/ dues qua all the 3 Secured Creditors (as on the cut-off date i.e. 31.7.2008 (as per the scheme) and as on the date of meeting (i.e., as on 4.2.2009) is thus:- Amounts owed to Secured Creditors (b) THE total value of the credit, on percentage basis, of SICOM Ltd is 23.78% of EXIM Bank is 20.44% and of AXIS BANK is 55.78%. (c) At present the Company is a going concern. Mr. M. J. Thakore, learned Senior Counsel with Mr. A. S. Vakil has appeared for the Company and Mr. S. Soparkar, learned Senior Counsel with Mr. S. A. Mehta has appeared for SICOM Ltd. Mr. M. H. Joshi, learned Senior Counsel with Mr. S. M. Singhi has appeared for EXIM Bank and Mr. A. L. Shah, Advocate, has appeared for AXIS Bank. 3. MR. Thakore, learned Counsel submitted that while the Scheme proposed by the Company is under consideration, it is necessary that any prejudice may not be caused which may frustrate the scheme and that if the proceedings before the Tribunal are allowed to continue, serious prejudice will be caused to the applicant and the Scheme would be rendered only academic or it will be totally frustrated. He also submitted that the provisions under Sections 391 to 394 of 1956 Act confer a right in favour of the Company and the creditors to consider and accept a Scheme, inter alia, for restructuring its debt and such a scheme would be binding on all the Creditors/Members/ Official Liquidator as the case may be, if after its acceptance by the statutory majority creditors or members, the Court also sanctions it and that therefore it is but essential that any action by solitary or minority objector may not be allowed to nullify the Scheme. MR. Thakore, urged that the objector may, therefore, be restrained from proceeding further with the application under Section 19 of RDB Act pending before the DRT and/or with the action pursuant to the notice under SFC Act. 4.1 Opposing the said submissions and the prayer of the applicant, MR. Soparkar, learned Counsel for the objector submitted that SICOM has a statutory right under Section 29 of SFC Act to take steps to recover its dues and/or it also has a right to prefer application under Section 19 of RDB Act, therefore, its action under Section 29 of SFC Act and/or the proceedings before the DRT under RDB Act cannot and need not be stayed. 4.2 MR. 4.2 MR. Soparkar, learned senior Counsel further submitted that the RDB Act and/or the SFC Act override the 1956 Act, hence once an action under SFC Act is initiated and/or the proceedings under RDB Act are instituted, then an application under Sections 391 of 1956 Act would not be maintainable and the Company Court will not have jurisdiction to entertain such application and that therefore as a corollary the application under sub- Section (6) of Section 391 of 1956 Act also would not be maintainable. 4.3 He also submitted that the Company Court does not have power u/ S. 39-1(6) to injunct the FIs from taking action u/S. 29 of SFC Act and/or to restrain the DRT from adjudicating the application u/S. 19 of RDB Act. He submitted that assuming that application under Section 391 is maintainable despite the pendency of S. 19 application before the DRT and/or despite the proposed action u/S. 29 of SFC Act and that the Company Court has power to stay either the proposed action or the proceedings then in that event also such discretionary power should be exercised judiciously and only after very close scrutiny of the facts of each case. In his submission, facts of present case do not warrant exercise of such power and the Court is not bound to mechanically stay the proceedings of application under Section 19 of RDB Act or the action under Section 29 of SFC Act. He also submitted that Sections 17 to 19 of RDB Act and 29 of SFC Act would prevail over Section 391(6) and the statutory right under said provisions cannot be nullified by application u/S. 391 (l)and 391(6) of 1956 Act. He also submitted that the role and jurisdiction of the Company Court under Section 391 of 1956 Act is only peripheral and supervisory and that therefore the Court cannot decide about justifiability or otherwise of Objector's action. 4.4 MR. Soparkar also advanced alternative submission and urged that if the Court holds that the application is maintainable and also decides to stay the proceedings or the proposed action, then appropriate conditions may be prescribed, i.e. unconditional stay may not be granted. He relied on the below mentioned judgments in the case between; 1. UP Finance Corporation v. GEM CAP (India) Pvt. Ltd. and Others reported in 1993 (2) SCC 299 ; 2. He relied on the below mentioned judgments in the case between; 1. UP Finance Corporation v. GEM CAP (India) Pvt. Ltd. and Others reported in 1993 (2) SCC 299 ; 2. U.P. Financial Corporation and Ors v. Naini Oxygen and Acetylene Gas Ltd. reported in (1995) 2 SCC 754 3. The State Financial Corporation and Another v. Jagdamba Oil Mills and Anr. reported in AIR 2002 SC 834 4. Hindustan Lever and Another v. State of Maharashtra and Another reported in 2004 (9) SCC 438 ; 5. M/s. Bakemans Industries Pvt. Ltd. v. M/s. New Cawnpore Flour Mills and Ors. reported in 2008 (6) ALL M.R. 463 6. Tata Motors Ltd. v. Pharmaceutical Products of India Ltd. and Another reported in 2008 (7) SCC 619 ; 7. In respondent: IMP Powers Ltd. reported in 2008 (142) CC 481. 8. Judgment of the Hon'ble Apex Court in Civil Appeal No.7128 of 2008 between Union of India and Ors. v. SICOM Ltd. and Anr. 9. An order in Company Application No.35 of 2005 passed by High Court of Judicature at Bombay in the matter between Meta Strips Limited v. Economic Development Corporation. 4.5 Per contra, MR. Thakore, learned senior Counsel for the applicant in rejoinder submitted that the family of Section 391 to Section 394 of 1956 Act operate in a field different from the field of operation of S. 19 of RDB Act and Section 29 of SFC Act and the scope of 1956 Act is entirely different, hence there is no scope of conflict or any occasion for one statute prevailing over the other. In reply to a query, it was submitted that it will not be feasible for the applicant to offer any further security. He, however, submitted that in view of the provisions under Section 391 to 394 of 1956 Act, one of the secured creditors should not be allowed, at the cost of other secured creditors, to steal a march over other secured creditors more particularly when Objector does not have exclusive charge over the assets. He, however, submitted that in view of the provisions under Section 391 to 394 of 1956 Act, one of the secured creditors should not be allowed, at the cost of other secured creditors, to steal a march over other secured creditors more particularly when Objector does not have exclusive charge over the assets. 4.6 MR Thakore submitted that application under Section 391 is maintainable despite the action under SFC Act and/or the pendency of application before DRT, and consequently the application u/S. 391(6) for interim relief would also be maintainable and the Company Court can stay the action under SFC Act and/ or the proceedings launched by objector before the Tribunal under RDB Act and that the provision under Section 391(6) of 1956 Act cannot be viewed independently since it is an enabling provision in aid of S. 391(1) of 1956 Act. 4.7 Lastly, he submitted that the Objector has tried to over reach the process made available under Section 391 to 394 of 1956 Act by legislature. So as to support his submissions, he relied upon the judgments in the following cases; 1. Municipal Council, Palai v, T.J. Joseph reported in AIR 1963 SC 1561 . 2. Municipal Corporation of Delhi v. Shiv Shanker reported in 1971(1) SCC 442 . 3. Harish Kapoor and Ors. v. Zafarbhai Mohmadbhai Chhatpar reported in (1989) 65 CC 163. 4. Maharastra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. and Anr. reported in (1993) 2 SCC 144 . 5. Gujarat Kamdar Sahakari Mandal and Ors. v. Ramkrishna Mills Ltd. reported in 1998 (92) comp cases 692; 6. Allahabad Bank v. Canara Bank 2000 (4) SCC 406 ; 7. Arvind Mills Ltd., In re. reported in [2002] 110 CC 539. 8. Arvind Mills Ltd., In re. reported in [2002] 111 CC 118. 9. Deepika Leasing and Finance Ltd. v. Deepika Chit Fund (P) Ltd. reported in (2005) 3 Comp L.J. 51. 10. Shree Rama Multitech Ltd. In re: reported in [2006] 131 CC 209. 11. Core Health Care Ltd. In re. [2007] 79 SCL 47. 12. ARCIL v. Ashok Organik and Ors. reported in (2008) 3 Comp.LJ. 61. 13. Chembra Orchard Produce Ltd. and Ors. v. Regional Director of Company Affairs and Anr. reported in (2009) 1 Comp LJ 1 (SC). 14. ICIC1 Ltd. v. State of Gujarat in SCA No.6324 of 2000 (decided on 8th December, 2000). 15. [2007] 79 SCL 47. 12. ARCIL v. Ashok Organik and Ors. reported in (2008) 3 Comp.LJ. 61. 13. Chembra Orchard Produce Ltd. and Ors. v. Regional Director of Company Affairs and Anr. reported in (2009) 1 Comp LJ 1 (SC). 14. ICIC1 Ltd. v. State of Gujarat in SCA No.6324 of 2000 (decided on 8th December, 2000). 15. he also placed reliance on various orders passed by this Court in various applications under Section 391(1) wherein, this Court has, ad interim relief granted stay of the proceedings by bank or financial institution. 16. He also referred to the judgments/orders passed by the High Court of Kerala in (a) Misc. Application No.47 of 2000, (b) in the matter of B.P.L. Ltd. being Company Petition No. 13 of 2005, (c) Misc. Application No.84 of 2004 preferred by B.P.L. Ltd., (d) in Company Appeal No.9 of 2005 against order in Misc. Civil Application No.84 of 2004, (e) in Company Appeal No.1 of 2006 against the order in Company Petition No. 13 of 2005, and (f) in Company Appeal No.2 of 2006 against the judgment in Misc. Civil Application No.84 of 2004. 4.8 MR. Joshi, learned senior Counsel while adopting the submissions of MR. Thakore, submitted that the Tribunal only adjudicates what is claimed to be due and the RDB Act in general or Section 19 of RDB Act in particular does not grant any right but it merely provides a mode of recovery and by virtue of RDB Act no contractual or statutory rights are granted. He also submitted that what SICOM claims, in effect, is exclusion from the provision of law and immutability of its contractual rights. He relied on the decisions reported in (i) Sayed Aqueel Arif v. University of Pune and Others reported in 2003 (12) SCC 724, (ii) Jay Engineering Works Ltd. v. Industry Facilitation Council reported in 2006 (8) SCC Page 677, and (iii) Harish Court. Raskapoor and Others v. Jaferbhai Mohmedbhai Chhatpar reported in 1989 (65) CC 163. 4.9 MR. AL Shah for AXIS Bank submitted that after the scheme is sanctioned by the Court, a novatio occurs and a new debt is substituted for earlier one. He also adopted submissions made on behalf of the applicant-Company and submitted that the provisions under Section 391 should not be allowed to be frustrated. 4.9 MR. AL Shah for AXIS Bank submitted that after the scheme is sanctioned by the Court, a novatio occurs and a new debt is substituted for earlier one. He also adopted submissions made on behalf of the applicant-Company and submitted that the provisions under Section 391 should not be allowed to be frustrated. He also submitted that provision under Section 391 and Section 19 of RDB.Act or Section 29 of SFC Act can exist together. 4. BEFORE proceeding further it needs to be mentioned that in light of the elaborate submissions and rival contentions by both sides regarding RDB Act and Section 19 proceedings it was enquired by the Court about the absence of any specific reference or prayer about RDB Act or application u/ S. 19, and in reply reliance was placed on the part of prayer which runs thus .... Company be restrained from taking any legal proceedingsagainst the applicant Company including .... so as to urge that the prayer for said relief stands covered in any legal proceedings. Further, no objection on this ground is raised by SICOM and actually its Counsel has made elaborate submissions with reference to scope of Section 391(6) vis-a-vis Sections 17 to 19 and 34 of RDB Act. Hence, it is deemed necessary to deal with both i.e. SFC Act and RDB Act. It also deserves to be mentioned that the limited nature and scope of this application u/S.391(6) of 1956 Act does not call for, at this stage, scrutiny of the merits of the proposed scheme. It would be, thus, not necessary to refer to the referred judgments dealing with the scope of application under Section 391(1). Re: MAINTAINABILITY 5. THIS application under Section 391(6) has been opposed by the objector SICOM mainly on the ground that it has not accepted the scheme and it stands outside the proceedings under Sections 391 and 394, consequently its statutory right to proceed to recover its dues cannot be nullified by presenting a scheme proposing to restructure the debt. 7.1 The objector has drawn support mainly from the provision under Sections 17 and 19 and 34 of the RDB Act and Sections 29 and 46-B of SFC Act, and has contended that Section 34 of RDB Act and Section 46-B of SFC Act give over-riding effect to the provisions of RDB Act and the SFC Act. 7.1 The objector has drawn support mainly from the provision under Sections 17 and 19 and 34 of the RDB Act and Sections 29 and 46-B of SFC Act, and has contended that Section 34 of RDB Act and Section 46-B of SFC Act give over-riding effect to the provisions of RDB Act and the SFC Act. Reliance is also placed on the judgment of the Hon'ble Supreme Court in the case between Allahabad Bank and Canara Bank and another, reported in (2000) 4 SCC 406 and also on the judgment of the High Court of Bombay in the matter of Re: IMP Powers Ltd. 7.2 The contention regarding maintainability of application under Sections 391 and 394 may be cleared first. Actually, after having been confronted with the judgment of this Court (Coram: Hon'ble Mr. Justice R.S.Garg), Mr. Soparkar. Senior Counsel did not carry this contention further. THIS Court has, in the judgment in the case of Re. Core Health Care Limited [(2007) 79 SCL 47], after considering the judgment of Hon'ble Apex Court in the case of Allahabad Bank, already held that : - One of the objections raised by the objectors is that the objectors have filed their case before the Debt Recovery Tribunal, therefore, this Court would have no jurisdiction to consider the Scheme and by grant of the Scheme as the objectors are to be non-suited by the Debt Recovery Tribunal, present proceedings are illegal. The petitioners have placed their reliance upon the judgment of the Supreme Court in the matter of Allahabad Bank v. Canara Bank and another, [ AIR 2000 SC 1535 ]. So far as the right of the objector to proceed with the case before the Debt Recovery Tribunal is concerned, it would certainly stand if the Scheme proceedings are not approved by the High Court. Core certainly would have a right to take out proceedings for compromise. If the proceedings ultimately fail and the Scheme is not approved by the High Court, then right to proceed with the proceedings before the Debt Recovery Tribunal would stand, but it cannot be said by any stretch of imagination that Scheme proceedings cannot be approved by the High Court in view of pendency of the proceedings before the Debt Recovery Tribunal. Judgment in the matter of Allahabad Bank [supra] was in altogether different context, there, the Supreme Court was not considering approval, sanction or rejection of the Scheme. It cannot be denied that in a pending litigation, a borrower can come forward for settlement and it would always be open to the lender to accept the terms of the settlement. If such authority is available to a borrower, then he can always come forward with a Scheme for compromise which is being offered to the creditors individually so also jointly. However, I would agree with the petitioner that if an individual lender can settle, then, there is no reason to hold that the lenders collectively cannot enter into the Scheme of compromise.(Emphasis supplied) 7.3 Further, similar view has also been taken by the High Court of Kerala in the matter of M/s. BPL Ltd. (MCA No.84/2004 d/o 14.03.2005). 7.4 It has, thus, been held that the application under Sections 391 read with Section 394 would be maintainable despite the presentation and pendency of an application under Section 19 of the RDB Act. The judgment in the case of Core Health (Supra) is binding on me, hence, I shall, for the purpose of considering this application, proceed on the premise that the application under Section 391/ 394 is maintainable although the application under Section 19 of the RDB Act is pending. 7.5 The question which next arises is about maintainability and scope of application under Section 391(6) of 1956 Act. The application u/S. 391(6) is meant for incidental and ancillary relief during the consideration of the application under Section 391(1) r/w Section 394. On reading of the said Sections, it emerges that the Company or any creditor or shareholder/member of the Company or the Official Liquidator (in case of Company under winding up) can present, by way of application under Section 391, diverse type of compromise or arrangement i.e. a scheme for sanction by the Court. Thus, in view of the wide scope of the provisions under Section 391, its arena is not restricted only to the Scheme for restructuring debt. Further, Section 391(6) confers incidental power on the Company Court to pass appropriate interim order after application u/S. 391(1) is presented. Thus, in view of the wide scope of the provisions under Section 391, its arena is not restricted only to the Scheme for restructuring debt. Further, Section 391(6) confers incidental power on the Company Court to pass appropriate interim order after application u/S. 391(1) is presented. Hence, it cannot be denied that after an application under Section 391 of 1956 Act is submitted and in pursuance of such application, a Scheme is presented for sanction by the Court, an application under Section 391(6) would be, if circumstances so require, maintainable. 7.6 However, the matter concerning the scope of such application would be a separate issue and it stands on different footing because the question which arises is whether the said provision can halt the action of Financial Corporation u/S. 29 of SFC Act or the proceedings u/S. 19 of RDB Act. 6. BEFORE adverting to the said issue. it is pertinent to note that under Section 391(6) the relief of stay against the commencement and continuation of suit and proceedings is not available automatically or mechanically upon mere presentation of an application but it is left to the discretion of the Court and the Court has to decide each case judiciously and on its own facts and merits. Re: The 1956 Act and the RDB Act For the sake of convenience, the rival contentions regarding the RDB Act may be considered first. 9.1 It has been urged on behalf of the applicant that sub-Section (6) of Section 391 of the 1956 Act is in aid of Section 391(1), hence, during pendency of an application under Section 391/ 394, the stay of proceedings under Section 19 read with Section 17 before the DRT should be granted. In this context it is necessary to note at this stage that in view of the scope of Section 391(1), application(s) seeking sanction in respect of diverse type of Schemes e.g. for amalgamation/merger or for restructuring capital or by way of any other compromise or arrangement, can be made and the Scheme for reconstruction of debt would be only one out of the diverse type of Schemes which can be submitted under Section 391(1). 9.2 Section 391(6) empowers the Company Court to stay, in appropriate case(s), the commencement or continuation of any suit or proceedings against the Company, on such terms that the Court may think fit, until the Scheme is considered and the application is finally disposed of. In this backdrop the earlier mentioned issue, whether the power u/S. 391(6) would touch the proceedings before DRT and whether the same can be stayed by Company Court, would arise. 9.3 The intention and policy of the legislature with regard to Section 391(6) of the 1956 Act is to enable the Company Court to consider the scheme(s), and thereby the desire of the statutory majority, and to independently decide what is in the best interest of the Company and to empower the Company Court to stay, when it may be necessary and justified, the commencement and continuation of such suits and proceedings on such terms and conditions as may be necessary and appropriate, until the application is disposed of. 9.4 However, the Legislature, seems to have also found it necessary and appropriate to address the concern for the recovery of the dues of the FIs and consequently the legislature found it necessary to carve out an exception from the aforesaid position so as to take care of the situation involving Scheme concerning the dues of the FIs which may affect its recovery. Hence, upon considering and noticing the ineffectiveness and inadequacy of existing modes, avenues and procedure for recovery of the dues of FIs, the Legislature enacted the RDB Act and also provided the shield of Section 34 therein and made the statute more comprehensive in 2000 by amending it and including, by virtue of Section 19(19), the obligation to disburse the sale proceeds in accordance with the provisions of Section 529A of the 1956 Act. 9.5 The RDB Act provides, by virtue of Sections 17 to 19, a special Forum viz. DRT, with exclusive jurisdiction and mechanism, for the Banks/FIs to recover the debts expeditiously and without any hindrance or obstacles. This is reflected in the Statement of objects and reasons wherein, it is stated :- Banks and Financial Institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. DRT, with exclusive jurisdiction and mechanism, for the Banks/FIs to recover the debts expeditiously and without any hindrance or obstacles. This is reflected in the Statement of objects and reasons wherein, it is stated :- Banks and Financial Institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. The existing procedure for recovery of debts due to the Banks and Financial Institutions has blocked a significant portion of their funds in unproductive assets, the value of which deteriorated with the passage of time. .... An urgent need was, therefore, felt to work out a suitable mechanism through which the dues to the banks and financial institutions could be realised without delay. 9.6 Thus, as a consequence of the provisions under Sections 391(1) and 391(6) of 1956 Act on1 one hand and Sections 17 to 19 of RDB Act on the other hand two parallel proceedings in two judicial for a may come face-to- face when a bank or FI may initiate any recovery proceedings against a debtor Company while a scheme (more particularly in case of Scheme for debt restructuring) is submitted under Section 391/394 and is under consideration before the Company Court or when FI's application before the DRT is pending against a debtor Company and such Company submits a scheme (particularly scheme for restructuring debt) under Sections 391/ 394 for the consideration by the Court and also prefers an application under Section 391(6) of 1956 Act. 9.7 At such times competing situation and/or overlapping or conflict between the two proceedings under the two statutes arises, i.e. the question as to which one can have precedence over the other, arises. It would be so for the reason that the creditor FI would want its application before the DRT decided expeditiously and as per the Scheme and time frame provided under Section 19, whereas the debtor Company would urge that in exercise of the power under Section 391(6) the Company Court may stay the commencement of suit or proceedings while the application and thereby the Scheme, under Section 391 read with Section 394 can be examined by the Company Court. 9.8 The Legislature has, so as to make its intention clear and to emphasise the aforesaid object of the RDB Act, made provision by incorporating Section 34 in RDB Act which, ordinarily, would take care of such situation. 9.8 The Legislature has, so as to make its intention clear and to emphasise the aforesaid object of the RDB Act, made provision by incorporating Section 34 in RDB Act which, ordinarily, would take care of such situation. By this non-obstante clause, the provisions of RDB Act, including Sections 17 to 19 have been granted overriding effect. The said provision reads thus:- 34. Act to have over-riding effect._ (1) Save as provided under sub-Section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. (2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984) [, the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986). 9.9 The extent of the primacy that the legislature intended to confer on the RDB Act and particularly on Sections 17 to 20, 25 and 28 thereof is evident and becomes clear also from the conjoint reading of the provisions under Sections 18 and 17 which, by cumulative effect, mandate that the DRT shall have plenary and exclusive jurisdiction. The said Sections read thus:- Section 18. Bar of Jurisdiction. - On and from the appointed day, no Court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority(except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17. Section 17. Jurisdiction, powers and authority of Tribunal. - (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the Banks and Financial Institutions for recovery of debts due to such Banks and Financial Institutions. (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act. (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act. 9.10 Thus, as per the Section 18 no Court or authority will, after enactment of RDB Act, have any power or any authority and any Court or authority will not be entitled to exercise any authority or power in the matters pertaining to and incidental and/or ancillary to the recovery of debts of FIs when any application under Section 19 r/w Section 17 is being considered by the DRT. Further, Section 19 prescribes, in detail, exhaustive procedure for deciding the application. The procedure required to be followed for this purpose has been exhaustively laid down in Sections 17 to 20 and Sections 25 to 28 which, conjointly and collectively constitute a complete code in itself. Therefore, a conjoint reading of Sections 17, 18 and 19 read with Sections 25 to 28 of RDB Act paints clear picture of the policy and intention of legislature which is highlighted by Section 34 of the RDB Act. 9.11 In light of the provisions under Section 34 read with Sections 18 and 17, the objector SICOM would submit that the RDB Act will have overriding effect over 1956 Act while the applicant counters claiming that the RDB Act can have overriding effect only in the event of inconsistency which could arise if the statues operate in the same field. It is claimed that the questions which ought to be addressed to determine whether there is any inconsistency between the statutes, as held by the Hon'ble Apex Court in the case between Kishor Khemchand Goyal v. State of Gujarat and Others in (2003) 12 SCC 274 , are : (a) whether there is a direct conflict between two provisions, (b) whether the Legislature intended to lay down any exhaustive mode in respect of the subject matter replacing the earlier law, and (c) whether the two laws occupy the same field. Reference is also made to the judgment of the Hon'ble Apex Court in the case between Municipal Council v. T. J. Joseph (supra) and the judgment in the case between Municipal Corporation of Delhi v. Shivshankar (supra). Reference is also made to the judgment of the Hon'ble Apex Court in the case between Municipal Council v. T. J. Joseph (supra) and the judgment in the case between Municipal Corporation of Delhi v. Shivshankar (supra). 9.12 It is, thus, appropriate at this stage to take into consideration the diverse situations with regard to the overriding effect of one statute over another and/or the effect of non- obstante clause in one of the two statutes or in both statutes, which have been examined by the Apex Court and other High Court. 9.13(a) In the judgment in the case between Jay Engineering Works Ltd. and Industry Facilitation Council and Anr. [ (2006) 8 SCC 677 ] the Hon'ble Apex Court considered the situation between Sick Industrial Company's Special Provisions Act, 1985 (SICA for short) and the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1993. After comparing the provisions under the said two statutes, the Apex Court held that:- 24. Both the Acts operate in different fields. If the 1985 Act is attracted, the question of its giving way to the 1993 Act would not arise. 28. Both the Acts contain non- obstante clauses. Ordinary rule of construction is that where there are two non-obstante clauses, the latter shall prevail. But it is equally well settled that ultimate conclusion thereupon would depend upon the limited context of the statute. 31. The endeavour of the Court would, however, always be to adopt a rule of harmonious construction. (emphasis supplied). 9.13(b) In the said judgment, the Apex Court also referred to para 41 and 49 from the judgment in the case between NGEF Ltd. v. Chandra Developers (P) Ltd. [ (2005) 8 SCC 219 ], wherein it is held that:- 41. It is difficult to accept the submission of the learned Counsel appearing on behalf of the respondents that both the Company Court and BIFR exercise concurrent jurisdiction. If such a construction is upheld, there shall be chaos and confusion. A Company declared to be sick in terms of the provisions of SICA, continuous to be sick unless it is directed to be wound up. Till the Company remains a sick Company having regard to the provisions of sub-Section (4) of Section 20, BIFR alone shall have jurisdiction as regards sale of its assets till and order of winding up is passed by a Company Court. 49. Till the Company remains a sick Company having regard to the provisions of sub-Section (4) of Section 20, BIFR alone shall have jurisdiction as regards sale of its assets till and order of winding up is passed by a Company Court. 49. Section 32 of SICA contains a non obstante clause stating that, provisions thereof shall prevail notwithstanding anything inconsistent with the provisions of the said Act and of any rules or schemes made thereunder contained in any other law for the time being in force. It would bear repetition to state that in the ordinary course although the Company Judge may have the jurisdiction to pass an interim order, in exercise of its inherent jurisdiction or otherwise directing execution of a deed of sale in favour of an applicant by the Company sought to be would up, but keeping in view the express provisions contained in sub-Section (4) of Section 20 of SICA such a power, in our opinion, in the Company Judge is not available. (Emphasis supplied) 9.13(c) In M/s. Bakemans Industries Pvt. Ltd. v. M/s. New Cawnpore Flour Mills and Ors., [2008 (6) ALL Mr. 463] the Apex Court held that:- 39. The 1951 Act indisputably is a special statute. If a Financial Corporation intends to exercise a statutory power under Section 29 of the 1951 Act, the same will prevail over the general powers of the Company Judge under the Companies Act. (Emphasis supplied) 9.13(d) In the judgment in the case between Ashok Organic Industries Ltd. v. ARCIL (supra) the High Court considered maintainability of an application seeking sanction for the scheme of arrangement when reference before BIFR was pending, and observed that:- 15. In any event Section 32 (the non obstante provision) of the SICA 1985 will have the effect of SICA 1985 overriding Sections 391-394 of the companies Act, 1956. 18. Considering the above we have to hold that once the industrial Company makes a reference under Section 15 of the SICA, the Company Court would have no jurisdiction for sanctioning the scheme of arrangement of compromise with its creditors and shareholders and neither will it have jurisdiction to take cognisance of such an application during the pendency of the reference. (Emphasis supplied). (Emphasis supplied). 9.13(e) In the case between Tata Motors Ltd. v. Pharmaceutical Products of India Ltd. and Anr, the Apex Court held that:- 19.....The provisions of a special Act will override the provisions of a general Act. A later of it will override an earlier Act. 1956 Act is a general Act. It consolidates and restates the law relating to companies and certain other associations. It is prior in point of time to SICA. (Emphasis supplied). Whenever any inconsistency is seen in the provisions of the two Acts, SICA would prevail. SICA furthermore is a complete code. It contains a non- obstante clause in Section 32. 20. SICA is a special statute. It is a self contained Code. The jurisdiction of the Company Judge in a case where reference had been made to BIFR would be subject to the provisions of SICA. 22..... It is also not possible to harmonize the provisions of Sections 391 to 394 of the 1956 Act with the provisions of SICA. 9.13(f) The Apex Court considered the effect of non-obstante clause and overriding effect between Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA' for short) and SFC Act in the case between Maharashtra Tubes Ltd. and State Industrial Investment Corporation of Maharashtra Ltd., (supra). The Hon'ble Apex Court considered the scope and effect of S. 29 and/or 31 of SFC Act and S. 22 of SICA in the backdrop of the issue whether in a case where an industrial concern makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to meet its obligations under the terms of any agreement with the Financial Corporation, such as the respondent herein, can the latter take recourse to Sections 29 and/or 31 of the State Financial Corporations Act, 1951 (hereinafter called the 1951 Act') notwithstanding the bar of Section 22 of the SICA. The Apex Court has observed that:- '5.....It is thus clear from the provisions of this law that its primary objective is to provide an impetus to industrialisation by providing through a statutory Corporation financial assistance to industrial concerns and incidental power to take over is given and summary procedures have been laid down by Sections 29 and 31 for the realisation of its dues from defaulting industrial concerns. The power conferred by Section 29 and the remedy provided in Section 31(1) is not the underlying object and purpose of the statute, the real objective of the law is to create an instrumentality through which financial assistance can be extended to deserving entrepreneurs. This is the main purpose, scope and object of this special law. 6. On the other hand, the 1985 Act was enacted, as its preamble manifests, with a view to timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measures through appropriate schemes and their expeditious implementation.... 7. It will be seen from the above discussion that both the 1951 Act and the 1985 Act are special statutes, each having a different objective, the emphasis in the case of the former being on giving of financial assistance to entrepreneurs for setting up industries while in the case of the latter it being to revive or rehabilitate industries which have on account of economic or other related reasons gone sick. No doubt the latter Act also contemplates giving of financial assistance for revival or rehabilitation of a sick industrial undertaking but that is by way of a remedy or as a measure at revival of the sick unit.(Emphasis supplied) After considering the various aspects, and particularly the objectives and the field of operation of the two statutes and the concept of earlier and latter Statute and the non-obstante clause, the Hon'ble Apex Court held; 9. Having reached the conclusion that both the 1951 Act and the 1985 Act are special statutes dealing with different situations ---- the former providing for the grant of financial assistance to industrial concerns with a view to boost up industrialisation and the latter providing for revival and rehabilitation of sick industrial undertakings, if necessary, by grant of financial assistance, we cannot uphold the contention urged on behalf of the respondent that the 1985 Act is a general statute covering a larger number of industrial concerns than the 1951 Act and, therefore, the latter would prevail over the former in the event of conflict. Both the statutes have competing non obstante provisions. Both the statutes have competing non obstante provisions. Section 46-B of the 1951 Act provides that the provision of that statute and of any rule or order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force whereas Section 32(1) of the 1985 Act also provides that the provisions of the said Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law. Section 22(1) also carries a non obstante clause and says that the said provision shall apply notwithstanding anything contained in Companies Act, 1956 or any other law. The 1985 Act being a subsequent enactment, the non obstante clause therein would ordinarily prevail over the non obstante clause found in Section 46-B of the 1951 Act unless it is found that the 1985 Act is a general statute and the 1951 Act is a special one. In that event the maxim generalia specialibus nonderogant would apply. But in the present case on a consideration of the relevant provisions of the two statutes we have come to the conclusion that the 1951 Act deals with pre-sickness situation whereas the 1985 Act deals with the post-sickness situation. It is, therefore, not possible to agree that the 1951 Act is a special statute vis-a-vis the 1985 Act which is a general statute.Both are special statutes dealing with different situations notwithstanding a slight overlap here and there, for example, both of them provide for grant of financial assistance though in different situations. We must, therefore, hold that in cases of sick industrial undertakings the provisions contained in the 1985 Act would ordinarily prevail and govern. (Emphasis supplied) It is pertinent that in this case after noticing that both special statutes dealt with different situations, the Apex Court held that 1985 being subsequent enactment would prevail over non- obstante clause of earlier statute i.e. of 1951 Act. 7. SO far as the RDB Act is concerned, while considering the provisions under Section 446 and Section 537 of 1956 Act vis-a-vis the RDB Act in the case between Andhra Bank and Canara Bank, the Apex Court held that even if the 1956 Act is considered to be a special statute, it is the RDB Act which will prevail in the event of inconsistency. 10.1 Subsequently, the High Court of Bombay in Re: IMP Powers Ltd v. Respondent, in light of the judgment of the Hon'ble Apex Court in Allahabad Bank's case,' has held that:- 8. The submission of learned Counsel for the petitioner is that the powers of the High Court under Sections 391 and 394 are untrammelled by the provisions of the RDB Act because Section 391 does not make a distinction between classes of creditors. Hence, it is urged that under Section 394, the High Court has the power to sanction a compromise or arrangement which has the effect of modifying any contract and once the contract with the secured creditors is so modified, the Debts Recovery Tribunal would necessarily be bound to enforce the terms of the modified arrangement. The submission cannot be accepted for more than one reasons. First and foremost, in the judgment in Allahabad Bank v. Canara Bank [2000] 101 Comp Cas 64 the Supreme Court affirmed the view taken by several High Courts which was to the effect that the Companies Act, 1956 is a general enactment which will give way to the special provisions contained in the RDB Act which is enacted to ensure speedy and expeditious adjudication and realisation of debts due to banks and Financial Institutions. Secondly, in the exercise of powers conferred by Section 17 of the RDB Act, the Debts to adjudication, execution and working out priorities. Thirdly, the process of adjudication into the debt due to Induslnd Bank has already been set in motion by the institution of the proceedings under the RDB Act. The sanctioning of the scheme under Sections 391 to 394 will unquestionably dilute the full and plenary powers conferred under the Tribunal under the RDB Act to adjudicate upon the claim of the bank as presented. Fourthly, the exercise of powers of the Company Court in matters which fall within the ambit of the jurisdiction of the Debts Recovery)' Tribunal, would clearly amount to curtailing the jurisdiction of the Tribunal to adjudicate upon the claim of recovery submitted before the Tribunal, (emphasis supplied)