JUDGMENT Hon’ble Ashok Bhushan, J.—Heard Sri V.K. S. Chaudhari, learned Senior Advocate assisted by Sri PN. Tripathi, for the appellant and Sri Anjani Kumar Misra, assisted by Sri Arnab Banerji for Official Liquidator respondent No. 1. Sri K.M. Asthana, learned Advocate has appeared for the respondent No. 2. Sri U.N. Sharma, learned Senior Advocate assisted by Sri Manoj Kumar Sharma has appeared on behalf of the respondent No. 3. 2. With the consent of learned counsel for the parties, the appeal has been heard finally and is being decided by this judgment. 3. This special appeal under Chapter VIII Rule 5 of the Rules of the Court has been filed by the appellant Allahabad Bank challenging the judgment and order of learned Company Judge dated 24.10.2009, passed in Civil Misc. Application No. 164340 of 2009 in Civil Misc. Company Petition No. 5 of 1998 and Misc. Company Petition No. 113 of 1997 (In the matter of M/s Rajinder Pipes Ltd. in liquidation). 4. Brief facts necessary to be noted for deciding this appeal are that company petition No. 113 of 1997 Rajinder Pipes Ltd. (in the matter of M/s Rajinder Pipes Ltd.) was filed in this Court. Allahabad Bank, the appellant filed an Original Application being Original Application No. 153 of 1999 under Section 9 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “1993 Act”) for recovery of an amount of Rs. 39,93,47,701 with interest which was decreed by Debut Recovery Tribunal, Jabalpur vide its order dated 7.3.2000. Debt Recovery Certificate being DRC No. 164 of 2000 was issued for recovery of the aforesaid amount which was subsequently transferred and registered at Debt Recovery Tribunal Allahabad. By order dated 26.7.2000, the Company Judge passed an order for winding up of M/s Rajinder Pipes Ltd. The Official Liquidator took possession of the assets of the company on 24.7.2002. The Recovery Officer in pursuance of the recovery certificate attached the immoveable properties of the wound up company being half share of plot Nos. 902 and 891 by order dated 29.8.2002. The movable properties of the company were attached by order dated 23.12.2003. The appellant Allahabad Bank made an application in the company petition No. 113 of 1997 for impleading it as a necessary party and to protect the appellant’s right getting it out of winding up proceedings. 902 and 891 by order dated 29.8.2002. The movable properties of the company were attached by order dated 23.12.2003. The appellant Allahabad Bank made an application in the company petition No. 113 of 1997 for impleading it as a necessary party and to protect the appellant’s right getting it out of winding up proceedings. A request was made on behalf of the appellant before the Company Judge that recovery officer of the Debt Recovery Tribunal who had already attached the moveable and immoveable properties be permitted to proceed with the sale of the properties. The Company Judge passed an order on 13.2.2004 permitting the appellant to proceed with the attachment and sale of the assets for recovery of the dues under the 1993 Act. The Official Liquidator was directed to give access to Recovery Officer to proceed with the recovery. The sale of the Assets took place and a sale certificate dated 4.12.2006 was issued by the Recovery Officer. The auction purchaser made an application before the learned Company Judge praying for direction to the Official Liquidator to give physical possession. The learned Company Judge passed an order dated 4.4.2007, setting aside the sale certificate dated 4.12.2006 on the ground that the Official Liquidator was not heard nor he was given any opportunity to represent before the Recovery Officer for the purposes of representing workmen’s dues and apportion of the workmen’s liability under Section 529A of the Companies Act from the securities sought to be sold. The Court held that Recovery Officer is entitled to sell the properties of the debtor only after hearing him. By order dated 4.4.2007, the learned Company Judge directed the Recovery Officer to proceed to sell the assets only after associating the official Liquidator and after giving him hearing in which the Official Liquidator will have right to represent workmen’s dues worked out only after inviting the claims and expenses, which may have incurred in protecting and preserving the security. Second auction was held on 15.5.2008 by the Recovery Officer of the Tribunal in the presence and participation of the Official Liquidator but no bidder turned up and auction failed. On 27.1.2009, sale proclamation was issued for moveable and immoveable properties fixing 27.2.2009 for auction. Auction was to be held of two lots; lot 1 for movable properties reserved price Rs. 3.60 crores and lot 2 for immoveable properties reserved price Rs. 90 lacs. On 27.1.2009, sale proclamation was issued for moveable and immoveable properties fixing 27.2.2009 for auction. Auction was to be held of two lots; lot 1 for movable properties reserved price Rs. 3.60 crores and lot 2 for immoveable properties reserved price Rs. 90 lacs. The sale proclamation was also published in the news paper Dainik Jagaran, Kanpur, Lucknow and New Delhi Edition on 17.2.2009 and Times of India on 18.2.2009. An additional notice was also got published by the Bank on 26.2.2009 in Amar Ujala. On 27.2.2009 auction proceedings were held in the presence of Official Liquidator. Nine bidders participated after depositing the earnest money as required by sale proclamation. The respondent No. 3 gave highest bid of Rs. 475 lacs for lot No. 1 and Rs. 120 lacs for lot No. 2, total Rs. 595 lacs as against the total reserved price of Rs. 450 lacs. No complaint from any bidder or any other person was received against the auction proceedings. The Recovery Officer proceeded with the confirmation of the auction. On 30.3.2009 no one was present before the Recovery Officer. 15.4.2009 was fixed as next date. Official Liquidator was present on 15.4.2009 and prayed for adjournment. A letter cum objection dated 15.4.2009 was submitted by the Official Liquidator before the Recovery Officer. Official Liquidator in his letter cum objection dated 15.4.2009 stated that reserved price was fixed on the basis of the valuation, which did not include complete assets put to sale. It was further stated that proper advertisement in respect of sale proceeding was not made and advertisement was made in English newspaper only 2-3 days prior to the date of auction and in Hindi newspaper on 26.2.2009. Bidders did not participate in adequate number. It was requested that appropriate steps for cancellation of sale proceedings be taken. 5. The Recovery Officer heard the parties on 27.5.2009 including the Official Liquidator. The objection raised by the Official Liquidator dated 15.4.2009 were taken into consideration. The bank filed reply to the objection of the Official Liquidator and the Recovery Officer passed an order confirming the auction sale dated 27.2.2009 of moveable properties lot No. 1 and immoveable properties lot No. 2. 12.6.2009 was fixed for giving physical possession to the purchaser for the lot No. 1, for which direction was issued to the auction purchaser, Official Liquidator and Bank. 12.6.2009 was fixed for giving physical possession to the purchaser for the lot No. 1, for which direction was issued to the auction purchaser, Official Liquidator and Bank. On 12.6.2009 although the Bank and auction purchaser were present including the officials of the Tribunal but Official Liquidator did not present himself for handing over possession on the spot. An application No. 164340 of 2009 in Company Petition No. 5 of 1998 and Company Petition No. 113 of 1997(In the matter of Rajinder Pipes Ltd. in liquidation) was filed by the appellant before the learned Company Judge, praying that Official Liquidator be directed to hand over the charge of the company to the Recovery Officer after referring to detailed facts including the auction dated 27.2.2009 and its confirmation by the Recovery Officer on 27.5.2009. An application No. 155095 of 2009 was also filed by the respondent No. 3, the auction purchaser before the learned Company Judge, praying for a direction that Official Liquidator be directed to hand over peaceful possession of lot No. 1 purchased by the applicant in the auction held on 27.2.2009 and confirmed on 27.5.2009. Both the applications came up for consideration before the learned Company Judge on 22.7.2009. The Official Liquidator also filed a report No. 156 of 2009. By order dated 27.7.2009 the Official Liquidator was directed to file a reply to the application filed by the auction purchaser secured creditors within ten days. 12.8.2009 was fixed for further consideration. The Recovery Officer was also directed to file an affidavit in reply. The Recovery Officer also filed detailed affidavit dated 19.8.2009 before the learned Company Judge replying the report No. 156 of 2009 filed by the Official Liquidator. Learned Company Judge heard both the applications and the report of Official Liquidator and by its order dated 24.10.2009 set aside the auction dated 27.2.2009 with further direction that money deposited by the auction purchaser be returned to auction purchaser forthwith alongwith interest and direction was issued to start the process all over again. The order dated 24.10.2009 passed by learned Company Judge has been challenged in this appeal. 6. Sri V.K.S. Chaudhary, learned Senior Advocate appearing for the appellant submitted that the learned Company Judge had no jurisdiction to set aside the auction held by the Recovery Officer under the 1993 Act. The order dated 24.10.2009 passed by learned Company Judge has been challenged in this appeal. 6. Sri V.K.S. Chaudhary, learned Senior Advocate appearing for the appellant submitted that the learned Company Judge had no jurisdiction to set aside the auction held by the Recovery Officer under the 1993 Act. It is submitted that recovery proceedings have been initiated in pursuance of a decree granted under 1993 Act and the Official Liquidator having associated with the auction proceedings and being present in the auction proceedings dated 27.2.2009, the said auction cannot be set aside by learned Company Judge. It is submitted that no application for setting aside the auction dated 27.2.2009 was filed by any one including the Official Liquidator within the time prescribed i.e. within 30 days from the auction. It is submitted that the letter cum objection dated 15.4.2009, which was submitted by the Official Liquidator before the Recovery Officer was beyond time and was not in accordance with law. It is submitted that provisions of second and third Schedule of Income Tax Act, 1961 have been made applicable with regard to recovery proceedings by virtue of Section 29 of the 1993 Act and there being no application within the meaning of second schedule of Income Tax Act, 1961 for setting aside the sale, the auction sale could not have been set aside. He submitted that no application having been made for setting aside the sale within 30 days, the sale could not have been set aside. It is submitted that in so far as moveable properties are concerned, as soon as payment was made by auction purchaser, the sale of the moveable properties stood confirmed. He submits that in any view of the matter, if the Official Liquidator was aggrieved by order of the Recovery Officer confirming the sale, it was open to him to seek statutory remedy as provided under the 1993 Act and learned Company Judge could not have on the report submitted by the Official Liquidator, set aside the sale. He submits that before the learned Company Judge, there was not even an application for setting aside the sale. Sri Chaudhary further contended that sale proclamation having been issued on 27.1.2009, no issue could have been raised with regard to details which were mentioned in the sale proclamation. 7. He submits that before the learned Company Judge, there was not even an application for setting aside the sale. Sri Chaudhary further contended that sale proclamation having been issued on 27.1.2009, no issue could have been raised with regard to details which were mentioned in the sale proclamation. 7. Sri V.K.S. Chaudhary in support of his submissions placed reliance on the judgment of the Apex Court in the cases of Allahabad Bank v. Canara Bank and another, JT 2000 (4) SC 411, Rajasthan State Financial Corporation and Another v. Official Liquidator and another, (2005) 8 SCC 190 and submits that in view of the aforesaid judgments of the Apex Court which lays down that 1993 Act shall have an overriding effect over the Companies Act,1956 and recovery proceedings conducted by Recovery Officer under 1993 Act, it could have been challenged only in accordance with 1993 Act and the learned Company Judge had no jurisdiction to set aside the auction held on 27.2.2009. 8. Sri U.N. Sharma, learned Counsel appearing for the auction purchaser submits that the respondent No. 3 being the highest bidder amongst large number of bidders, the sale was rightly confirmed in his favour. It has been submitted that although the auction purchaser deposited the entire amount yet he has neither been able to get possession of the properties nor has been able to utilise his huge amount which he deposited in pursuance of the auction sale dated 27.2.1009. 9. Sri Anjani Kumar Misra, learned counsel appearing for the Official Liquidator refuting the submissions of learned counsel for the appellant, contends that learned Company Judge was well within his jurisdiction in setting aside the auction sale dated 27.2.2009. He submits that sale by the Recovery Officer was to be conducted in association with the Official Liquidator which envisages supervisions of the Company Judge, the learned Company Judge in whose supervision, the sale was conducted had every right to set aside the sale. He submits that Official Liquidator has filed his objection on 15.4.2009 before the Recovery Officer which was not properly considered. He submits that sheds have been wrongly included in the lot No. 1 of the moveable properties, whereas it was an immoveable property. He submits that the valuation of the sheds according to the report of the valuer was Rs. 3 crores, which was not taken into consideration rather a reduced valuation of Rs. He submits that sheds have been wrongly included in the lot No. 1 of the moveable properties, whereas it was an immoveable property. He submits that the valuation of the sheds according to the report of the valuer was Rs. 3 crores, which was not taken into consideration rather a reduced valuation of Rs. 143 lacs only was included in the reserved price. He submits that immoveable properties were not identifiable on the spot, sheds were never advertised earlier to 4.9.2008 and they were never attached. The Bank did not obtain fresh valuation report despite the order of the Recovery Officer. The value of the sheds of 2002 has been taken and the sheds were neither hypothecated nor mortgaged. By virtue of Schedule II of Income Tax Act, 1961 the question of title would have to resolve by the learned Company Judge alone. Reliance has been placed by Sri Anjani Kumar Misra on the judgment of the Apex Court in International Coach Builders Ltd. v. Karnataka State Financial Corpn., (2003) 10 SCC 482 ; M.V. Janardhan Reddy v. Vijaya Bank and others, (2008) 7 SCC 738 . He further submits that it is the duty of the Official Liquidator and the learned Company Judge to watch the best interest of the company and in exercise of such powers of supervision, the best price of the properties of the company has to be secured. Reliance has also been placed on the judgment of the Apex Court in Allahabad Bank and others v. Bengal Paper Mills Co. Ltd., (1999) 4 SCC 383 and FCS Software Solutions Ltd. v. La Medical Devices Limited and others, (2008) 10 SCC 440 . He further submits that in accordance with Section 529 of the Companies Act, 1956, the workmen dues have priority over all other dues and the Official Liquidator represents the workmen and for giving effect to provisions of Section 529 A of the Companies Act, the learned Company Judge can set aside the auction sale. 10. Sri V.K. S. Chaudhary, learned Senior Advocate appearing for the appellant in rejoinder has submitted that there was no issue with regard to identification of the moveable property. He submits that sheds are not immoveable property but rather moveable property and have been rightly sold in lot No. 1 as moveable property. 10. Sri V.K. S. Chaudhary, learned Senior Advocate appearing for the appellant in rejoinder has submitted that there was no issue with regard to identification of the moveable property. He submits that sheds are not immoveable property but rather moveable property and have been rightly sold in lot No. 1 as moveable property. He submits that survey of the moveable properties was done in the presence of Official Liquidator on 12.12.2008 by the Revenue officials and report was already submitted. It is submitted that by virtue of Section 19(19) of the 1993 Act, the Recovery Officer requested the Official Liquidator to submit the workmen’s dues so that the sale proceed may be distributed pari passu but Official Liquidator failed to intimate the dues. It is submitted that Official Liquidator duly participated in all the proceedings including fixing of reserved price and valuation of the properties hence, it is not open for him to challenge the valuation and reserved price or other steps taken towards auction sale. Official Liquidator was present in the auction proceedings dated 27.2.2009 and participated in the said proceedings without raising any objection. He also signed the bid sheet and it is unexplainable as to why after the auction sale, he is creating hindrance in handing over of the possession. 11. We have considered the submissions of learned counsel for the parties and have perused the record. 12. The Allahabad Bank which is a secured creditor, filed an Original Application No. 153 of 1999 against M/s Rajinder Pipes Ltd. which was allowed on 7.3.2000 by Debt Recovery Tribunal, Jabalpur for recovery of amount of Rs. 39,93,47,701 with interest. A recovery certificate for realizing the said amount was issued by the Debt Recovery Tribunal. The company stood wound up in the company petition by order dated 26.7.2000. The appellant made an application in the winding up proceedings praying that it should remain out of the winding up proceedings. The appellant made a request to the learned Company Judge praying that it be permitted to proceed with the sale of the assets for recovery under the 1993 Act. The learned Company Judge considered he request of the appellant and permitted the Bank appellant to proceed with the recovery and sale of the assets in accordance with the 1993 Act. The appellant made a request to the learned Company Judge praying that it be permitted to proceed with the sale of the assets for recovery under the 1993 Act. The learned Company Judge considered he request of the appellant and permitted the Bank appellant to proceed with the recovery and sale of the assets in accordance with the 1993 Act. It is useful to refer to the following order passed by the learned Company Judge on 13.2.2004: “The assets of the company are lying idle for a long time, and heavy stakes of Financial Institutions are involved. The Court finds that the supreme Court has held in Allahabad Bank v. Canara Bank, that the Recovery Officer under the Act of 1993 has exclusive jurisdiction and can proceed independently to recover the amount subject to representation of workmen’s interest by Official Liquidator. The Court cannot take any object to the legal and valid recovery of the Allahabad Bank through the process provided under the Act. Having regard to the facts and circumstances of the case, the prayer of Sri Rakesh Kumar Misra to proceed with the attachment and sale of the assets for recovery of dues under the provisions of the Debt Recovery Tribunal Act is allowed. The Official Liquidator is directed to give access to the Recovery Officer to proceed with the recovery of legal and valid dues of the Allahabad Bank against the assets of the company. The official Liquidator is also directed to circulate the inventory and the valuation to all the secured creditors and to apprise them with the order of the Court.” 13. After the order dated 13.2.2004, the Recovery Officer proceeded with the auction of the assets and sale certificate dated 4.12.2006 was issued by the Recovery Officer. An application was made by the auction purchaser before the learned Company Judge for direction to the Official Liquidator to hand over the physical possession which was considered by the learned Company Judge. Learned Company Judge however, found that Official Liquidator was not associated with the sale nor was given opportunity by the Recovery Officer hence, the sale deserved to be set aside. By order dated 4.4.2007 auction sale held in the year 2006 was set aside. Learned Company Judge however, found that Official Liquidator was not associated with the sale nor was given opportunity by the Recovery Officer hence, the sale deserved to be set aside. By order dated 4.4.2007 auction sale held in the year 2006 was set aside. Learned Company Judge while passing the order dated 4.4.2007 setting aside the sale also directed as under: “Let the Recovery Officer proceed to sale the assets only after associating the Official Liquidator and after giving him hearing in which the Official Liquidator will have right to represent the workmen’s worked out only after inviting the claims and expenses, which may have incurred in protecting and preserving the security.“ 14. After the aforesaid order dated 4.4.2007, the Recovery Officer further proceeded with the sale of the assets of the company under liquidation. The Official Liquidator was represented before the Recovery Officer and participated in the proceedings. The sale proclamation was issued on 27.1.2009 notifying the auction for 27.2.2009. The proclamation was also published in the news paper on 17.2.2009 and 18.2.2009. Nine bidders participated in the proceedings and 26 round of bidding took place, which is recorded in the proceedings. The respondent No. 3 was the highest bidder in the said proceedings having given highest bid of Rs. 495 lacs as against the reserved price of Rs. 450 lacs. For the first time, the Official Liquidator wrote a letter cum objection dated 15.4.2009 to the Recovery Officer which has been brought on record in the application filed by the appellant before the learned Company Judge as Annexure-9. The Bank filed an objection refuting the issues raised in the letter and the Recovery Officer after hearing the Official Liquidator and another confirmed the auction sale on 27.5.2009. It is to be noted that neither any bidder nor any other person filed any objection against the auction sale. When the Official Liquidator did not hand over possession in pursuance of the auction sale, applications were filed by the appellant secured creditors as well as auction purchaser before the learned Company Judge for issuing necessary direction to the Official Liquidator for handing over possession to the auction purchaser. Before the learned Company Judge a report was submitted by the Official Liquidator. Before the learned Company Judge a report was submitted by the Official Liquidator. The learned Company Judge while hearing the aforesaid application on 22.7.2009, has passed following order: “The official Liquidator has filed a report No. 156 of 2009 today, a copy of which has been served upon Sri Ramesh Singh and to Sri P.N. Tripathi, Advocate. The Official Liquidator in this report has given the reasons for the non compliance of the order of the Recovery Officer. The Official Liquidator in his report contends that without revaluation of the assets, the sale has been made at a lower price by the Recovery Officer. The Official Liquidator also contends that the auction sale was made against the prescribed procedure. Whatever may be the stand taken by the official Liquidator, the Court prima facie finds that the Official Liquidator cannot sit tight over the matter.. If the Official Liquidator was aggrieved by the order or the Recover Officer rejecting the objections of the Official Liquidator and confirming the sale, it was upon to the Official Liquidator to challenge the said order in an appropriate forum. The Court finds that this had not been done and, consequently in the absence of taking any steps to challenge the order of the Recovery Officer, the Official Liquidator could not sit tight over the matter or refuse to hand over the assets which has been confirmed by the Recovery Officer. Before proceeding further in the matter, the Court directs the Official Liquidator to file a reply to the application filed by the auction purchaser and secured creditor within 10 days from today. The auction purchaser and secured creditor may file a rejoinder affidavit, if necessary, and may file a reply to the Official Liquidator Report No. 156 of 2009 within a week thereafter. List this matter for further consideration on 12.8.2009. In the meanwhile, the Official Liquidator will serve a copy of the Official Liquidator Report No. 156 of 2009 to the Recovery Officer, Debt Recovery Tribunal within 48 hours. The Recovery Officer is directed to file a reply to this report within two weeks and also to appear on the next date fixed either personally or through an Advocate. The registry is also directed to issue notice to the Recovery Officer, Debt Recovery Tribunal, Allahabad alongwith Official Liquidator Report No. 156 of 2009 by registered post A/D within 48 hours.” 15. The registry is also directed to issue notice to the Recovery Officer, Debt Recovery Tribunal, Allahabad alongwith Official Liquidator Report No. 156 of 2009 by registered post A/D within 48 hours.” 15. Subsequent to the aforesaid order dated 22.7.2009, the reply by the Official Liquidator as well as an affidavit of Recovery Officer was filed before the learned Company Judge and thereafter the impugned judgment was delivered by learned Company Judge setting aside the auction sale. Two reasons given by the learned Company Judge for setting aside the sale are as follows: “However, upon consideration of the entire facts and circumstances, one thing is most blatantly obvious that the sheds which are not movable property have been included in the 1st lot as movable properties. This part of the advertisement itself was bad and misleading. The second blatant error in making the advertisement and the auction was that the reserved price was fixed on the basis of a valuation report, which was approximately three years old ignoring a valuation which was made one year prior. Therefore, the auction has not been made on the basis of a fair and recent valuation report. The auction is, therefore, set aside. The money as deposited by the auction purchaser will be returned to him forthwith on making a demand alongwith interest which is given at usual lending rates.” 16. The principal submission which has been pressed by learned counsel for the appellant is that auction sale having been conducted by the Recovery Officer under the provisions of 1993 Act, the said auction sale cannot be set aside by learned Company Judge when the Official Liquidator had participated in the auction sale and had full opportunity in the auction proceedings. It is submitted that provisions of 1993 Act shall have overriding effect and the learned Company Judge could not have exercised the jurisdiction to set aside the auction sale and the appropriate remedy open for the Official Liquidator was to file statutory appeal in accordance with the 1993 Act before the Tribunal. The above submission of Sri Chaudhary has been refuted by Sri Anjani Kumar Misra, learned counsel for the Official Liquidator relying on Section 529-A of the Companies Act. The above submission of Sri Chaudhary has been refuted by Sri Anjani Kumar Misra, learned counsel for the Official Liquidator relying on Section 529-A of the Companies Act. Learned counsel for the respondent No. 3 submits that the sale has to be conducted with the participation of the Official Liquidator under the supervision of the learned Company Judge hence, the learned Company Judge shall have jurisdiction to set aside the sale. 17. Before considering the other submissions made by learned counsel for the parties regarding the auction sale including the objection raised by the Official Liquidator to the auction sale, it is necessary to consider the issue as to whether the remedy of the Official Liquidator was to take recourse of the statutory provisions under the 1993 Act or whether the learned Company Judge committed error in setting aside the sale on the report submitted by the Official Liquidator on the grounds as noticed above. 1993 Act has been enacted to provide for the establishment of Tribunals for expeditions adjudication and recovery of debts due to banks and financial institutions. Section 17 of the Act provides for jurisdiction, powers and authority of the Tribunals. Section 17(1) provides that 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. Section 19(1) and Section 19(19) are quoted as below: “19. Application to the Tribunal.—(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction- (a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or (c) the cause of action, wholly or in part, arises. (19) Where a certificate of recovery is issued against a company registered under the Companies Act, 1956, the Tribunal may order the sale proceeds of such company to be distributed among its secured creditors in accordance with the provisions of Section 529A of the Companies Act, 1956 and to pay the surplus, if any, to the company.” 18. Section 29 applies the provisions of the Second and Third Schedule of Income Tax Act, 1961. Section 30 provides for appeal against the order of the Recovery Officer and also provides for overriding effect of the Act. Section 30 is quoted as below: “30. Appeal against the order of Recovery Officer.—(1) Notwithstanding anything contained in Section 29, any person aggrieved by an order of the Recovery Officer made under this Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal. (2) On receipt of an appeal under sub-section (1), the Tribunal may, after giving an opportunity to the appellant to be heard, and after making such enquiry as it deems fit, confirm, modify or set aside the order made by the Recovery Officer in exercise of his powers under Sections 25 to 28 (both inclusive).” 19. The present is a case, where the appellant is secured creditor, who had decided to remain outside the winding up proceedings and to realize its debt from its securities. On an application filed by the appellant, the learned Company Judge by its order dated 13.2.2004 permitted to realize the debt of the appellant by resorting to recovery proceedings in according with 1993 Act and Official Liquidator was directed to give access to the Recovery Officer to proceed with the recovery of legal and valid dues of the Allahabad Bank against the assets of the company. The order of the learned Company Judge dated 13.2.2004, by which recovery under 1993 Act was permitted by sale of the assets of the company, did not contain any condition that the sale required confirmation by the learned Company Judge. The provisions of 1993 Act as well as the jurisdiction of the company Court with regard to assets of the company under liquidation, came for consideration before the apex Court in Allahabad Bank v. Canara Bank (supra). The judgment of the apex Court in the aforesaid case is sheet anchor of the arguments of the appellant. The provisions of 1993 Act as well as the jurisdiction of the company Court with regard to assets of the company under liquidation, came for consideration before the apex Court in Allahabad Bank v. Canara Bank (supra). The judgment of the apex Court in the aforesaid case is sheet anchor of the arguments of the appellant. In the aforesaid case, Allahabad Bank had obtained a money decree against the company M/s M. S. shoes from Debt Recovery Tribunal under the 1993 Act whereas the claim of Canara Bank and other secured creditors was pending before the Tribunal. An application for winding up of the company was pending in Delhi High Court. An order was passed by the learned Company Judge under Section 442 and 537 of the Companies Act staying the sale proceedings taken out by the Allahabad Bank before the Recovery Officer under the 1993 Act. The said order was appealed before the apex Court by the Allahabad Bank. In the aforesaid background the various issues fell for consideration before the apex Court. In paragraph 13 of the judgment, the apex Court noticed the points which arose for consideration which are as follows: “13. From the aforesaid contentions, the following points arise for consideration : (1) Whether in respect of proceedings under the RDB Act at the stage of adjudication for the money due to the Banks or Financial Institutions and at the stage of execution for recovery of monies under the RDB Act, the Tribunal and the Recovery Officers are conferred exclusive jurisdiction in their respective spheres? (2) Whether for initiation of various proceedings by the Banks and financial institutions under the RDB Act, leave of the Company Court is necessary under Section 537 before a winding up order is passed against the Company or before provisional liquidator is appointed under Section 446(1) and whether the Company Court can pass orders of stay of proceedings before the Tribunal, in exercise of powers under Section 442? (3) Whether after a winding up order is passed under Section 446(1) of the Company Act or a provisional liquidator is appointed, whether the Company Court can stay proceedings under the RDB Act, transfer them to itself and also decide questions of liability, execution and priority under Section 446(2) and (3) read with Sections 529, 529A and 530 etc. (3) Whether after a winding up order is passed under Section 446(1) of the Company Act or a provisional liquidator is appointed, whether the Company Court can stay proceedings under the RDB Act, transfer them to itself and also decide questions of liability, execution and priority under Section 446(2) and (3) read with Sections 529, 529A and 530 etc. of the Companies Act or whether these questions are all within the exclusive jurisdiction of the Tribunal? (4) Whether, in case it is decided that the distribution of monies is to be done only by the Tribunal, the provisions of Section 73, C.P.C. and sub-clauses (1) and (2) of Section 529, Section 530 of the Companies Court also apply - apart from Section 529A - to the proceedings before the Tribunal under the RDB Act? (5) Whether in view of provisions in Section 19(2) and 19(19) as introduced by Ordinance 1/2000, the Tribunal can permit the appellant Bank alone to appropriate the entire sale proceeds realised by the appellant except to the limited extent restricted by Section 529A? Can the secured creditors like the Canara Bank claim under Section 19(9) any part of the realisations made by the Recovery Officer and is there any difference between cases where the secured creditor opts to stand outside the winding up and where he goes before the Company Court? (6) What is the relief to be granted on the facts of the case since the Recovery Officer has now sold some properties of the company and the monies are lying partly in the Tribunal or partly in this Court? “ 20. In paragraph 21 of the judgment, the apex Court laid down that the jurisdiction of the Tribunal in regard to adjudication is exclusive. It was further held that even in regard to execution, the jurisdiction of the Recovery Officer is exclusive. It is relevant to quote paragraphs 21, 22, 23 and 25 which are as follows: “21. In our opinion, the jurisdiction of the Tribunal in regard to adjudication is exclusive. The RDB Act requires the Tribunal alone to decide applications for recovery of debts due to Banks or financial institutions. Once the Tribunal passes an order that the debt is due, the Tribunal has to issue a certificate under Section 19(22) (formerly under Section 19(7)) to the Recovery Officer for recovery of the debt specified in the certificate. The RDB Act requires the Tribunal alone to decide applications for recovery of debts due to Banks or financial institutions. Once the Tribunal passes an order that the debt is due, the Tribunal has to issue a certificate under Section 19(22) (formerly under Section 19(7)) to the Recovery Officer for recovery of the debt specified in the certificate. The question arises as to the meaning of the word ‘recovery’ in Section 17 of the Act. It appears to us that basically the Tribunal is to adjudicate the liability of the defendant and then it has to issue a certificate under Section 19(22). Under Section 18, the jurisdiction of any other Court or authority which would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon the liability is exclusively vested in the Tribunal. (This exclusion does not however apply to the jurisdiction of the Supreme Court or of a High Court exercising power under Article 226 or 227 of the Constitution). This is the effect of Sections 17 and 18 of the Act. 22. We hold that the provisions of Sections 17 and 18 of the RDB Act are exclusive so far as the question of adjudication of the liability of the defendant to the appellant Bank is concerned. (ii) execution of Certificate by Recovery Officer : Is his jurisdiction exclusive 23. Even in regard to ‘execution’, the jurisdiction of the Recovery Officer is exclusive. Now a procedure has been laid down in the Act for recovery of the debt as per the certificate issued by the Tribunal and this procedure is contained in Chapter V of the Act and is covered by Sections 25 to 30. It is not the intendment of the Act that while the basic liability of the defendant is to be decided by the Tribunal under Section 17, the Banks/Financial institutions should go to the Civil Court or the Company Court or some other authority outside the Act for the actual realisation of the amount. The certificates granted under Section 19(22) has, in our opinion, to be executed only by the Recovery Officer. No dual jurisdictions at different stages are contemplated. Further, Section 34 of the Act gives overriding effect to the provisions of the RDB Act. The certificates granted under Section 19(22) has, in our opinion, to be executed only by the Recovery Officer. No dual jurisdictions at different stages are contemplated. Further, Section 34 of the Act gives overriding effect to the provisions of the RDB Act. That Section reads as follows : “Section 34(1) : Act to have overriding effect - (1) Save as otherwise provided in sub-section (2), the provisions of this Act shall 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) and the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986).” The provisions of Section 34(1) clearly state that the RDB Act overrides other laws to the extent of ‘inconsistency’. In our opinion, the prescription of an exclusive Tribunal both for adjudication and execution is a procedure clearly inconsistent with realisation of these debts in any other manner. 25. Thus, the adjudication of liability and the recovery of the amount by execution of the certificate are respectively within the exclusive jurisdiction of the Tribunal and the Recovery Officer and no other Court or authority much less the Civil Court or the Company Court can go into the said questions relating to the liability and the recovery except as provided in the Act. Point 1 is decided accordingly.” 21. Answering point Nos. 2 and 3 following was laid down in paragraphs 30 and 31. “ 30. ..............On the same parity of reasoning as in Damji Valji Shah’s case ( AIR 1966 SC 135 ), there is no need for the appellant to seek leave of the Company Court to proceed with its claim before the Debt Recovery Tribunal or in respect of the execution proceedings before the Recovery Officer. Nor can they be transferred to the Company Court. 31. Nor can they be transferred to the Company Court. 31. It may also be noticed that in the LIC Act of 1956, there was no provision like Section 34 of the RDB Act giving overriding effect to the provisions of the LIC Act. Still this Court upheld the exclusive jurisdiction of the LIC Tribunal observing as follows : “the provisions of the special Act i.e. the LIC Act will override the provisions of the general Act, the Companies Act which is an Act relating to Companies in general.” We are of the view that the appellant’s case under the RDB Act - with an additional section like Section 34 - is on a stronger footing for holding that leave of the Company Court is not necessary under Section 537 or under Section 446 for the same reasons. If the jurisdiction of the Tribunal is exclusive, the Company Court cannot also use its powers under Section 442 against the Tribunal/Recovery Officer. Thus, Sections 442, 446 and 537 cannot be applied against the Tribunal.” 22. Section 19(19) which was added in the Act by Ordinance No. 1 of 2000 (subsequently replaced by Act No. 1 of 2000) fell for consideration. Following was laid down in paragraph 37 “ .......The above recommendations as to working out ‘priorities’ have now been brought into the Act with greater clarity under Section 19(19) of Ordinance 1/2000. Priorities, so far as the amounts realised under the RDB Act are concerned, are to be worked out only by the Tribunal under the RDB Act. Section 19(19) of the RDB Act reads as follows : “Where a certificate of recovery is issued against a company registered under the Companies Act, 1956, the Tribunal may order the sale proceeds of such company to be distributed among its secured creditors in accordance with the provisions of Section 529A of the Companies Act, 1956 and to pay the surplus, if any, to the Company.” Section 19(19) is clearly inconsistent with Section 446 and other provisions of the Companies Act. Only Section 529A is attracted to proceedings before the Tribunal. Thus, on questions of adjudication, execution and working out priorities, the special provisions made in the RDB Act have to be applied.” 23. After referring to Section 34 of the 1993 Act, it was laid down that 1993 Act overrides the Companies Act in paragraphs 40 and 50 which are quoted below: “40. Thus, on questions of adjudication, execution and working out priorities, the special provisions made in the RDB Act have to be applied.” 23. After referring to Section 34 of the 1993 Act, it was laid down that 1993 Act overrides the Companies Act in paragraphs 40 and 50 which are quoted below: “40. Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely, Section 34. A similar situation arose in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of India, (1993) 2 SCC 144 : (1993 AIR SCW 991) where there was inconsistency between two special laws, the Finance Corporation Act, 1951 and the Sick Industries Companies (Special Provisions) Act, 1985. The latter contained Section 32 which gave overriding effect to its provisions and was held to prevail over the former. It was pointed out by Ahmadi, J. that both special statutes contained non-obstante clauses but that the “1985 Act being a subsequent enactment, the non-obstante clause therein would ordinarily prevail over the non-obstante clause in Section 46-B of the 1951 Act unless it is found that the 1985 Act is a general statute and the 1951 statute is a special one”. Therefore, in view of Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts. 50. “For the aforesaid reasons, we hold that at the stage of adjudication under Section 17 and execution of the certificate under Section 25 etc. the provisions of the RDB Act, 1993 confer exclusive jurisdiction in the Tribunal and the Recovery Officer in respect of debts payable to Banks and financial institutions and there can be no interference by the Company Court under Section 442 read with Section 537 or under Section 446 of the Companies Act, 1956. the provisions of the RDB Act, 1993 confer exclusive jurisdiction in the Tribunal and the Recovery Officer in respect of debts payable to Banks and financial institutions and there can be no interference by the Company Court under Section 442 read with Section 537 or under Section 446 of the Companies Act, 1956. In respect of the monies realised under the RDB Act, the question of priorities among the Banks and financial institutions and other creditors can be decided only by the Tribunal under the RDB Act and in accordance with Section 19(19) read with Section 529A of the Companies Act and in no other manner. The provisions of the RDB Act, 1993 are to the above extent inconsistent with the provisions of the Companies Act, 1956 and the latter Act has to yield to the provisions of the former. This position holds good during the pendency of the winding up petition against the debtor-company and also after a winding up order is passed. No leave of the Company Court is necessary for initiating or continuing the proceedings under the RDB Act, 1993. Points 2 and 3 are decided accordingly in favour of the appellant and against the respondents.” 24. Sections 529 and 529 A of the Companies Act also came for consideration alongwith Section 19(19) of 1993 Act. Following was laid down in paragraphs 61, 63 and 64: “61. The respondent’s contention that Section 19(19) gives priority to all “secured creditors” to share in the sale proceeds before the Tribunal/Recovery Officer cannot, in our opinion, be accepted. The said words are qualified by the words “in accordance with the provision of Section 529A”. Hence, it is necessary to identify the above limited class of secured creditors who have priority over all others in accordance with Section 529A. 63. The first category of secured creditors mentioned above are those who go before the Company Court for dividend by relinquishing their security in accordance with the insolvency rules mentioned in Section 529. The insolvency rules are those contained in Sections 45 to 50 of the Provincial Insolvency Act. Section 47(2) of that Act states that a secured creditor who wishes to come before the official liquidator has to prove his debt and he can prove his debt only if he relinquishes his security for the benefit of the general body of creditors. The insolvency rules are those contained in Sections 45 to 50 of the Provincial Insolvency Act. Section 47(2) of that Act states that a secured creditor who wishes to come before the official liquidator has to prove his debt and he can prove his debt only if he relinquishes his security for the benefit of the general body of creditors. In that event, he will rank with the unsecured creditors and has to take his dividend as provided in Section 529(2). Till today, the Canara Bank has not made it clear whether it wants to come under this category. 64. The second class of secured creditors referred to above are those who come under Section 529A(1)(b) read with proviso (c) to Section 529(1). These are those who opt to stand outside the winding up to realise their security. Inasmuch as Section 19(19) permits distribution to secured creditors only in accordance with Section 529A, the said category is the one consisting of creditors who stand outside the winding up. These secured creditors in certain circumstances can come before the Company Court (here the Tribunal) and claim priority over all other creditors for release of amounts out of the other monies lying in the Company Court (here, the Tribunal). This limited priority is declared in Section 529A(1) but it is restricted only to the extent specified in clause (b) of Section 529A(1). The said provision refers to sub-clause (c) of the proviso to Section 529(1) and it is necessary to understand the scope of the said provision.” 25. The proposition laid down by the apex Court in the aforesaid case fully supports the submissions made by learned counsel for the appellant. 26. Another judgment of the apex Court needs to be noted is International Coach Builders v. Karnataka State Financial Corporation (supra). Several appeals were decided by the apex Court by the aforesaid judgment including appeal No. 4072 and 4073 of 1994. It is sufficient to notice the facts of the aforesaid two appeals. A winding up petition was filed on 23.5.1988 against the company known as International Coach Builders Ltd. Another petition by another creditor was also filed on 2.11.1988. During the pendency of the above petitions before the High Court, the Karnataka State Financial Corporation took possession of the mortgaged assets in exercise of powers under Section 29 of the State Financial Corporation Act, 1951. During the pendency of the above petitions before the High Court, the Karnataka State Financial Corporation took possession of the mortgaged assets in exercise of powers under Section 29 of the State Financial Corporation Act, 1951. On 30.11.1990, an order of winding up was passed by the Karnataka High Court and Official Liquidator was directed to take over charge of the assets. The Corporation has accepted bid of one M/s Raheja Development Corporation for sale of the mortgaged assets for Rs. 85 lacs. Neither the Official Liquidator nor the company Court was in any manner involved with the negotiation held by the Corporation. An application was filed by respondents under Section 446 (2) (b) read with Section 537 of the Companies Act before the learned Company Judge praying for leave to stand out side the winding up proceedings and realize its debts by selling the assets. The Company Court allowed the application subject to undertaking to discharge the workmen’s dues. The Official Liquidator appealed against the order of the learned Company Judge, which was dismissed by the Division Bench against which order special leave petitions were filed. In the apex Court an order was passed directing the Corporation to sell the properties jointly with the Official Liquidator under the supervision of the learned Company Judge. M/s Raheja Development Corporation made an application before the Company Court to concur in the sale effected by the Corporation in its favour, which application was not allowed. Appeal to the Division Bench was also dismissed. The Corporation contended before the apex Court that they being secured creditors are entitled to exercise their right under Section 29 of State Financial Corporation Act without interference of the Court. Reliance on Section 46-B was also placed. The contention was that there was a conflict between Section 529 and 529-A of the Companies Act on the one hand and Section 29 of the State Financial Corporation Act on the other hand. It was contended that the companies Act being general law must yield to the State Financial Corporation Act which is special law. Considering the provisions of Section 529 and 529 A of the Companies Act as well as State Financial Corporation Act following was laid down by the apex Court in paragraphs 21, 25, 26 and 32. “21. It was contended that the companies Act being general law must yield to the State Financial Corporation Act which is special law. Considering the provisions of Section 529 and 529 A of the Companies Act as well as State Financial Corporation Act following was laid down by the apex Court in paragraphs 21, 25, 26 and 32. “21. Though the charge by itself may not amount to mortgage, all the provisions which apply to a simple mortgage, so far as may be, apply to a charge. Thus, the Official Liquidator, as the representative of the workmen’s pari passu charge, would be in the position of a co-mortgage. Though Section 29 hitherto enabled the SFC as a mortgagee to exercise its right thereunder by taking possession of the property and selling it in satisfaction of its debt, the situation has now changed. Because of the aforesaid statutory intervention, the SFC must necessarily contend with a pari passu charge holder who has equal rights. It is well established law that where there are co-mortgages, one co-mortgage cannot sell without consent of the co-mortgage or institute any proceedings for sale of mortgage property without joining the other co-mortgages either as plaintiffs or as defendants. The SFC’s right under Section 29 of freely realising its security gets trammeled if it has to take on a pari passu charge holder. The realisation of the security can thereafter only be done either by satisfaction of the pari passu charge or by a suit in which the pari passu charge holder would be a party defendant. Though when the SFC Act was enacted in 1951 it was intended that SFC could act unilaterally, the amendments made to the Companies Act in 1985 have introduced a pari passu charge holder as a co-helmsman of the ship of the SFC, who can neither be ignored nor overridden. In other words, the existence of the pari passu charge holder being represented by the Official Liquidator would necessarily bring in supervision of the Company Court as the Official Liquidator cannot act without directions from and supervision of the Company Court. This is precisely the reason why the judgment of this Court A.P. State Financial Corporation (supra) holds that the statutory right of the SFCs to sell the property under Section 29 of the SFC Act is now subject to the provisions of Section 529 and Section 529A of the Companies Act. This is precisely the reason why the judgment of this Court A.P. State Financial Corporation (supra) holds that the statutory right of the SFCs to sell the property under Section 29 of the SFC Act is now subject to the provisions of Section 529 and Section 529A of the Companies Act. The statutory right to sell the property under Section 29 of the Act has now to be exercised in tandem with the rights of pari passu charge in favour of the workmen created by the proviso to Section 529 of the Companies Act. This Court observed in A.P. State Financial Corporation (Supra) : “The Act of 1951 is a special Act for grant of financial assistance to industrial concerns with a view to boost up industrialization and also recovery of such financial assistance if it becomes bad and similarly the Companies Act deals with companies including winding up of such companies. The proviso to Sub-section (1) of Section 529 and Section 529A being a subsequent enactment, the non obstante clause in Section 529A prevails over Section 29 of the Act of 1951 in view of the settled position of law. We are, therefore, of the opinion that the above proviso to Sub-section (1) of Section 529 and Section 529A will control Section 29 of the Act of 1951. In other words the statutory right to sell the property under Section 29 of the Act of 1951 has to be exercised with the rights of pari passu charge to the workmen created by the proviso to Section 529 of the Companies Act. Under the proviso to Sub-section (1) of Section 529, the liquidator shall be entitled to represent the workmen and force (sic enforce) the above pari passu charge. Therefore, the Company Court was fully justified in imposing the above conditions to enable the Official Liquidator to discharge his function properly under the supervision of the Company Court as the new Section 529A of the companies Act confers upon a Company Court the duty to ensure that the workmen’s dues are paid in priority to all other debts in accordance with the provisions of the above section. The legislature has amended the Companies Act in 1985 with a social purpose viz. to protect dues of the workmen. The legislature has amended the Companies Act in 1985 with a social purpose viz. to protect dues of the workmen. If conditions are not imposed to protect the right of the workmen there is every possibility that the secured creditor may frustrate the above pari passu right of the workmen. 25. Of course, even in such a situation, if the same property was mortgaged to more than one secured creditor, they had to either come to an agreement, or in the event of disagreement, there had to be a suit in which dissenting mortgagee had to be sued as a necessary party defendant. No doubt Section 29 of the SFC Act was intended to place the SFCs on a better footing. But, in our view, this better footing is available only so long as the debtor is not a company or is a going company. The moment a winding up order is made in respect of a debtor company, the provisions of Section 529 and 529a come into play and whatever superior rights had been ensured to SFCs under the provision of the SFC Act are now subjected to and operate only in conjunction with the special rights given to the workmen, who as pari passu charge-holders are represented by the official liquidator. We are, therefore, of the view that the unhindered right hitherto available to the SFCs to realise their security, without recourse to the Court, no longer holds true as the right vested in the official liquidator is a statutory impediment to such exercise and has to be reckoned with. And since the official liquidator can do nothing without the leave or concurrence of the Court, all necessary applications must, therefore, come to the Company Court. 26. We do not really see a conflict between Section 29 of the SFC Act and the Companies Act at all, since the rights under Section 29 were not intended to operate in the situation of winding up of a company. Even assuming to the contrary, if a conflict arises, then we respectfully reiterate the view taken by the Division bench of this Court in A.P. State Financial Corporation case (supra). Even assuming to the contrary, if a conflict arises, then we respectfully reiterate the view taken by the Division bench of this Court in A.P. State Financial Corporation case (supra). This Court pointed out therein that Section 29 of the SFC Act cannot override the provisions of Section 29(1) and 529A of the Companies Act, 1956, inasmuch as the SFCs cannot exercise the right under Section 29 ignoring a pari passu charge of the workmen. It was observed in the judgment: “The proviso to Sub-section (1) of Section 529 and Section 529A being a subsequent enactment, the non obstante clause in Section 529A prevails over Section 29 of the Act of 1951 in view of the settled position of law. We are, therefore, of the opinion that the above proviso to sub-section (1) of Section 529 and Section 529A will control Section 29 of the Act of 1951. In other words the statutory right to sell the property under Section 29 of the Act of 1951 has to be exercised with the rights of pari passu charge “Therefore, the power to sell which is given to a financial corporation under Section 29 has to be exercised consistently with the right of a pari passu charge holder. Such a right can be exercised with the consent of the pari passu charge holder or on orders of the Court after making him a party to the proceedings to enforce the security. Since the charge holder is the Official Liquidator, his power to consent is subject to the sanction of the Court created by the proviso to Section 529 of the Companies Act. Under the proviso to Sub-section (1) of Section 529, the liquidator shall be entitled to represent the workmen and force (sic enforce) the above pari passu charge. 32. We, therefore, hold as under: 1. The right unilaterally exercisable under Section 29 of the SFC Act is available against a debtor, if a company, only so long as there is no order of winding up; 2. The SFCs cannot unilaterally act to realise the mortgaged properties without the consent of the official liquidator representing workmen for the pari passu charge in their favour under the proviso to Section 529 of the Companies Act, 1956. 3. The SFCs cannot unilaterally act to realise the mortgaged properties without the consent of the official liquidator representing workmen for the pari passu charge in their favour under the proviso to Section 529 of the Companies Act, 1956. 3. If the official liquidator does not consent, the SFCs have to move the Company Court for appropriate directions to the official liquidator who is the pari passu charge holder on behalf of the workmen. In any event, the official liquidator cannot act without seeking directions from the Company Court and under its supervision.” 27. In a subsequent case, Rajasthan State Financial Corporation and another (supra), a reference was made by two learned judges of the apex Court taking note of the submissions that there is apparent conflict between Allahabad Bank v. Canara Bank and International Coach Builders Ltd. (Supra). The reference was decided by the three Judges Bench vide its judgment dated 5.10.2005 reported in (2005) 8 SCC 190 . The three Judges Bench referred to the judgment of the apex Court in Allahabad Bank’s case (supra) as well as the judgment of the apex Court in International Coach Builders Ltd. (Supra) In paragraphs 15 and 16, it was laid down by three Judges Bench that there is no apparent conflict between the judgments in the aforesaid two cases. In paragraph 16, although the apex Court noticed that 1993 Act being a subsequent legislation will prevail over the general law which argument was held not to be available with regard to State Financial Corporation Act since Section 529-A was introduced by Act 35 of 1985 and the overriding provision therein would prevail over the State Financial Corporation Act of 1951. Following was laid down in paragraph 16: “16. In International Coach Builders Limited v. Karnataka State Financial Corporation, (2003) 10 SCC 482 , this Court considered the correctness of the views expressed by the Karnataka High Court and the Gujarat High Court. This Court held that a right is available to a financial corporation under Section 29 of the SFC Act against a debtor, if a company, only so long as there is no order of winding up. When the debtor is a company in winding up, the rights of financial corporations are affected by the provisions in Sections 529 and 529-A of the Companies Act. When the debtor is a company in winding up, the rights of financial corporations are affected by the provisions in Sections 529 and 529-A of the Companies Act. It was also held that the proviso to Section 529 of the Companies Act creates a 'pari passu’ charge in favour of the workmen to the extent of their dues and makes the liquidator the representative of the workmen to enforce such a charge. The decision of the Bombay High Court in Maharashtra State Financial Corpn. v. Ballarpur Industries Ltd., AIR 1993 Bom 392, was approved. The reference to a larger bench was occasioned by the fact that the decision in Allahabad Bank v. Canara Bank and another (supra) was not adverted to in this decision. This decision recognizes that, whether a creditor is standing outside the winding up or not, the distribution of the proceeds has to be in terms of Section 529 of the Companies Act read with Section 529A of that Act in a case where the debtor is a company-in-liquidation. As far as we can see, there is no conflict on the question of the applicability of Section 529A read with Section 529 of the Companies Act to cases where the debtor is a company and is in liquidation. The conflict, if any, is in the view that the Debts Recovery Tribunal could sell the properties of the Company in terms of the Recovery of Debts Act. This view was taken in Allahabad Bank v. Canara Bank and another (supra) in view of Recovery of Debts Act being a subsequent legislation and being a special law would prevail over the general law, the Companies Act. This argument is not available as far as the SFC Act is concerned, since Section 529A was introduced by Act 35 of 1985 and the overriding provision therein would prevail over the SFC Act of 1951 as amended in 1956 and notwithstanding Section 46B of the SFC Act. As regards distribution of assets, there is no conflict. This argument is not available as far as the SFC Act is concerned, since Section 529A was introduced by Act 35 of 1985 and the overriding provision therein would prevail over the SFC Act of 1951 as amended in 1956 and notwithstanding Section 46B of the SFC Act. As regards distribution of assets, there is no conflict. It seems to us that whether the assets are realized by a secured creditor even if it be by proceeding under the SFC Act or under the Recovery of Debts Act, the distribution of the assets could only be in terms of Section 529A of the Act and by recognizing the right of the liquidator to calculate the workmen’s dues and collect it for distribution among them pari passu with the secured creditors. The Official Liquidator representing a ranked secured creditor working under the control of the company Court cannot, therefore, be kept out of the process.” 28. The three Judges Bench in the above case laid down that once a winding up proceeding has commenced and the liquidator is put in charge of the assets of the company being wound up, the distribution of the proceeds of the sale of the assets held at the instance of the financial institutions coming under the Recovery of Debts Act or of financial corporations coming under the SFC Act, can only be with the association of the Official Liquidator and under the supervision of the company Court. Following was laid down in paragraphs 17 and 18 “17. Thus, on the authorities what emerges is that once a winding up proceeding has commenced and the liquidator is put in charge of the assets of the company being wound up, the distribution of the proceeds of the sale of the assets held at the instance of the financial institutions coming under the Recovery of Debts Act or of financial corporations coming under the SFC Act, can only be with the association of the Official Liquidator and under the supervision of the company Court. The right of a financial institution or of the Recovery Tribunal or that of a financial corporation or the Court which has been approached under Section 31 of the SFC Act to sell the assets may not be taken away, but the same stands restricted by the requirement of the Official Liquidator being associated with it, giving the company Court the right to ensure that the distribution of the assets in terms of Section 529A of the Companies Act takes place. In the case on hand, admittedly, the appellants have not set in motion, any proceeding under the SFC Act. What we have is only a liquidation proceeding pending and the secured creditors, the financial corporations approaching the company Court for permission to stand outside the winding up and to sell the properties of the company-in-liquidation. The company Court has rightly directed that the sale be held in association with the Official Liquidator representing the workmen and that the proceeds will be held by the Official Liquidator until they are distributed in terms of Section 529A of the Companies Act under its supervision. The directions thus, made, clearly are consistent with the provisions of the relevant Acts and the views expressed by this Court in the decisions referred to above. In this situation, we find no reason to interfere with the decision of the High Court. We clarify that there is no inconsistency between the decisions in Allahabad Bank v. Canara Bank and another (supra) and in International Coach Builders Limited v. Karnataka State Financial Corporation (supra) in respect of the applicability of Sections 529 and 529A of the Companies Act in the matter of distribution among the creditors. The right to sell under the SFC Act or under the Recovery of Debts Act by a creditor coming within those Acts and standing outside the winding up, is different from the distribution of the proceeds of the sale of the security and the distribution in a case where the debtor is a company in the process of being wound up, can only be in terms of Section 529-A read with Section 529 of the Companies Act. After all, the liquidator represents the entire body of creditors and also holds a right on behalf of the workers to have a distribution pari passu with the secured creditors and the duty for further distribution of the proceeds on the basis of the preferences contained in Section 530 of the Companies Act under the directions of the company Court. In other words, the distribution of the sale proceeds under the direction of the company Court is his responsibility. To ensure the proper working out of the scheme of distribution, it is necessary to associate the Official Liquidator with the process of sale so that he can ensure, in the light of the directions of the company Court, that a proper price is fetched for the assets of the company in liquidation. It was in that context that the rights of the Official Liquidator were discussed in International Coach Builders Limited (supra). The Debt Recovery Tribunal and the District Court entertaining an application under Section 31 of the SFC Act should issue notice to the liquidator and hear him before ordering a sale, as the representative of the creditors in general. 18. In the light of the discussion as above, we think it proper to sum up the legal position thus : (i) A Debt Recovery Tribunal acting under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 would be entitled to order the sale and to sell the properties of the debtor, even if a company-in-liquidation, through its Recovery Officer but only after notice to the Official Liquidator or the liquidator appointed by the Company Court and after hearing him. (ii) A District Court entertaining an application under Section 31 of the SFC Act will have the power to order sale of the assets of a borrower company-in-liquidation, but only after notice to the Official Liquidator or the liquidator appointed by the Company Court and after hearing him. (ii) A District Court entertaining an application under Section 31 of the SFC Act will have the power to order sale of the assets of a borrower company-in-liquidation, but only after notice to the Official Liquidator or the liquidator appointed by the Company Court and after hearing him. (iii) If a financial corporation acting under Section 29 of the SFC Act seeks to sell or otherwise transfer the assets of a debtor company-in-liquidation, the said power could be exercised by it only after obtaining the appropriate permission from the company Court and acting in terms of the directions issued by that Court as regards associating the Official Liquidator with the sale, the fixing of the upset price or the reserve price, confirmation of the sale, holding of the sale proceeds and the distribution thereof among the creditors in terms of Section 529A and Section 529 of the Companies Act. (iv) In a case where proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or the SFC Act are not set in motion, the concerned creditor is to approach the company Court for appropriate directions regarding the realization of its securities consistent with the relevant provisions of the Companies Act regarding distribution of the assets of the company-in-liquidation.” 29. From the legal position as sum up in paragraph 18, a distinction is to be noted with regard to right of sale of the properties of the debtor company in liquidation by the recovery tribunal on the one hand and financial corporations under section 29 of the State Financial Corporation Act on the other hand. With regard to the Debt Recovery Tribunal, only requirement is that the sale by the Tribunal can be conducted after notice to the Official Liquidator and after hearing him, whereas with regard to sale by the Financial Corporation exercising the rights under Section 29 of the State Financial Corporation Act, the said powers can be exercised only after obtaining appropriate permission from the Company Court and acting in terms of the direction issued by the company Court. The three Judges Bench having approved the two Judges Bench judgment in Allahabad Bank v. Kanara Bank, which was a case in which recovery proceedings were initiated under the 1993 Act, the ratio of the judgment of the Allahabad Bank (supra) is fully attracted in the present case subject to legal position as summed up above by three Judges Bench. In the present case, there is no dispute that Official Liquidator was put to notice by the Recovery Officer of the sale rather the Official Liquidator participated in the sale proceedings on 27.2.2009 and signed the bid sheet. 30. One more judgment relied by counsel for the Official Liquidator needs to be noticed i.e. M.V. Janardhan Reddy (supra). In the aforesaid case which is two judges judgment, the execution application was filed by the Bank before the Debt Recovery Tribunal and recovery certificate was issued in favour of the Bank. The company petition was pending before the company Court. An application was filed in company petition under Section 446 of the Companies Act for granting leave to proceed with the sale of the properties of the company. The company Court granted permission vide its order dated 13.8.1999 subject to several conditions as quoted in paragraph 22, which are to the following effect: “22. Our attention has been invited by the learned counsel to the relevant orders passed by the Company Court from time to time. So far as the order dated August 13, 1999 is concerned, permission to sell the property was granted on certain terms and conditions. They read as under; (A) The Official Liquidator shall be allowed to have inspection of the properties and assets of the company in liquidation and to take inventory as and when required. (B) Certified copy of the Judgment and decree passed by the Subordinate Judge, Bhongir in O.S. No. 57/89 dt. 24.7.1993 shall be made available to the official Liquidator without delay. (C) The certified copy of the order that would be passed by the Debt Recovery Tribunal, Bangalore shall be made available to the official Liquidator without avoidable delay. (D) The petitioner-Bank shall file the valuer’s report in the Court before the properties covered under the mortgage deed are put to sale. (E) Permission of this Court shall be obtained before the sale of the properties movable or immovable, is confirmed or finalized. (D) The petitioner-Bank shall file the valuer’s report in the Court before the properties covered under the mortgage deed are put to sale. (E) Permission of this Court shall be obtained before the sale of the properties movable or immovable, is confirmed or finalized. (F) The petitioner-Bank shall undertake to deposit and shall deposit the workmen dues with the official Liquidator as and when quantified by him as per the provisions of Section 529(A) of the Indian Companies Act. (G) Whatever surplus remains after the sale and realization of the dues of the secured creditors and the workmen, as per law, the balance sale proceeds shall be made available to the official Liquidator for being dealt with in accordance with the provisions of the companies Act and the Rules. (emphasis supplied)” 31. The bank took steps for the sale in the auction held on 19.12.2005. The appellant has offered Rs. 67.50 lacs as highest bid which was accepted. The bank made an application before the Company Court to confirm the sale. The learned Company Judge set aside the sale, which was without notice and opportunity to the appellant vide order dated 17.3.2006. The said order was subsequently set aside by the Division Bench and the matter was remitted to the Company Judge. Learned Company Judge again passed an order setting aside the sale which order was affirmed by the Division Bench against which Special Leave to Appeal was filed. The Recovery Officer had already confirmed the sale on 13.2.2006. The argument was raised before the learned Company Judge that the sale having been confirmed by the Recovery Officer, it could have been set aside only on certain grounds such as fraud, irregularity in auction sale and since no such ground was taken, the order of setting aside sale could not be justified. On the other hand, it was contended that Recovery Officer has no authority or power to confirm the sale since it was a company Court to confirm the sale as per the conditions under which permission to sale was granted. It was further noticed by the company judge that Official Liquidator was not associated with the proceedings of the sale, which was clearly mentioned in the report submitted by the Official Liquidator. It was further noticed by the company judge that Official Liquidator was not associated with the proceedings of the sale, which was clearly mentioned in the report submitted by the Official Liquidator. The apex Court took the view in the aforesaid case that since it was for the company Court to confirm the sale hence, Recovery Officer had no jurisdiction to confirm the sale and the action taken by the Recovery Officer was in violation of the specific conditions imposed by the Company Court. Following was observed in paragraph 23: “23. An order, dated March 28, 2005 in Company Application No. 187 of 2005 was equally clear. It read as under; “This is an application filed by the Nationalized Bank seeking permission of this Court to receive the valuation report and also to permit the bank to effect sale of the properties of the Company under liquidation through the Recovery Officer of the Debts Recovery Tribunal, in terms of the conditions of auction sale notice dated 2.2.2005. It is also stated that though sale notice was ordered, no sale was conducted as no permission was obtained from this Court. The Official Liquidator also filed a report reporting that there is no objection as to the proposed auction and also the valuation report as filed by the applicant Company. Under the above circumstances, the applicant company is permitted to go ahead with the proposed sale of the assets of the Company under Liquidation through public auction. But, however, the said sale, if any effected, shall be subject to the confirmation of this Court. The applicant is accordingly granted permission to effect the sale, but the sale shall be required to be confirmed by this Court. The application is accordingly disposed of.” (emphasis supplied) The above orders leave no room of doubt that the Bank was permitted to go ahead with the proposed sale of the assets of the Company under liquidation by way of auction but such sale was subject to confirmation by the Company Court. It is, therefore, clear that all parties were aware about the condition as to confirmation of sale by the Company Court. It was, therefore, not open to Recovery Officer to confirm sale. The order passed and action taken by the Recovery Officer was in clear violation of and inconsistent with the specific condition imposed by the Company Court. It is, therefore, clear that all parties were aware about the condition as to confirmation of sale by the Company Court. It was, therefore, not open to Recovery Officer to confirm sale. The order passed and action taken by the Recovery Officer was in clear violation of and inconsistent with the specific condition imposed by the Company Court. In our considered opinion, therefore, the appellant cannot take any advantage of confirmation of sale by the Recovery Officer who did not possess the power to confirm sale.” 32. The reason for affirming the decision of the company Court setting aside the sale could be found in paragraphs 28 and 29 of the judgment which are to the following effect: “28. In our opinion, the Company Court was right in passing fresh order after hearing the parties. If the Recovery Officer could not have confirmed the sale, obviously all actions taken in pursuance of confirmation of sale, such as, issuance of sale certificate, registration of documents, etc., would be of no consequence. Since the Company was in liquidation and Official Liquidator was in charge of the assets of the Company, he ought to have been associated with the auction proceedings, which was not done. This is also clear from the report submitted by the Official Liquidator and on that ground also, the auction sale was liable to be set aside. 29. Thus, taking into account overall circumstances, it cannot be said that by setting aside the sale, any illegality had been committed by the Court or the appellant had suffered. The grievance voiced by the appellant, therefore, is not well founded and cannot be upheld.” 33. The apex Court in the above case has affirmed the company Court order setting aside the sale on the two grounds that; (1) the specific conditions under which sale was permitted, the confirmation of sale was to be done by the Company Court and the Recovery Officer had no jurisdiction to confirm the sale.; (2) the company was under liquidation hence, the Official Liquidator ought to have been associated with the auction proceedings which was not done. 34. The above judgment was on its own facts wherein for the aforesaid two reasons, the judgment of the learned Company Judge was affirmed. 34. The above judgment was on its own facts wherein for the aforesaid two reasons, the judgment of the learned Company Judge was affirmed. The above case has no application in the facts of the present case for the following two reasons that; (a) the permission to sale in the present case was granted by order of the Company Judge dated 13.2.2004 as stated above, which did not contain any condition that sale had to be confirmed by the Company Judge. (b) the Official Liquidator had been noticed and participated in the auction proceedings. The Official Liquidator has signed the bid sheet dated 27.2.2009 as token of participation. 35. Thus, the ratio laid down by the apex Court in M.V. Janardhan Reddy’s case (supra) is not attracted in the present case and said case is clearly distinguishable. 36. Two more judgments relied by counsel for the respondents need to be noticed; they are Allahabad Bank and others v. Bengal Paper Mills Co. Ltd. and FCS, Software Solutions Ltd. v. La Medical Devices Limited and others (supra). In both the aforesaid case, it was held that it is obligation of the Company Court to the creditors of the company to ensure that best possible price has been realized. Those were the cases, in which the auction sale held under the supervision of the Company Judge, came for confirmation before the Company Court and was set aside. In the above cases, the apex Court laid down that approach of the Company Judge in relation to sale should be to get highest price so as to satisfy the banks loan. There cannot be any dispute to the above proposition but in the present case, sale was conducted by the Recovery Officer in execution of the recovery certificate under 1993 Act which was confirmed by the Recovery Officer. The Official Liquidator was associated with the sale proceedings and was present when the auction was held on 27.2.2009. In view of the proposition laid down by the apex Court in Allahabad Bank v. Canara Bank (supra) and Rajasthan State Financial Corporation (supra), the Recovery Officer under the 1993 Act had exclusive jurisdiction to conduct and confirm the sale. The Official Liquidator was associated with the sale proceedings and was present when the auction was held on 27.2.2009. In view of the proposition laid down by the apex Court in Allahabad Bank v. Canara Bank (supra) and Rajasthan State Financial Corporation (supra), the Recovery Officer under the 1993 Act had exclusive jurisdiction to conduct and confirm the sale. Sale having been conducted in accordance with the 1993 Act, the remedy of the Official Liquidator, if he was aggrieved by the sale, has to be found out in accordance with the 1993 Act, which is a complete code. It is relevant to note that letter cum objection dated 15.4.2009 given by the Official Liquidator was replied by the Bank and was also dealt with by the Recovery Officer, while confirming the sale vide his order dated 27.5.2009. The Recovery Officer, if felt aggrieved by the confirmation of the sale, his remedy was to file an appeal under Section 30 of the 1993 Act before the Tribunal. 37. The apex Court in Tata Motors Ltd. v. Pharmaceutical Products of India Ltd., (2008) 7 SCC 619 , had occasion to consider the conflict between the two Acts namely; Sick Industrial Companies (Special provisions) Act, 1984 and State Financial Corporation Act, 1985. The apex Court after considering the provisions Act, 1984 specially Section 32 with non-obstante clause took the view that Sick Industrial Companies (Special provisions) Act, 1984 (SICA) being special Statute and self contained code, the jurisdiction of the Company Judge where reference has been made to Board for Industrial and Financial Reconstruction (BIFR) would be subject to provisions of SICA Act. In the aforesaid case recommendation was made by the BIFR for wounding of the company against which appeal was filed and order was stayed by AAFIR. Before AAFIR, two separate schemes were framed on the other hand Company Judge in terms of Section 391 of the Companies Act prepared a scheme. The appellant filed an application for intervention before the Company Judge and raised objections to the scheme framed by the Company Judge. One of the grounds taken was that SICA Act being special legislation shall prevail over the Companies Act. The appellant filed an application for intervention before the Company Judge and raised objections to the scheme framed by the Company Judge. One of the grounds taken was that SICA Act being special legislation shall prevail over the Companies Act. The objection of the appellant was rejected by the Company Judge and the scheme framed by the Company Judge was approved against which the Letters Patent appeal was filed, which too was dismissed by the Division Bench against which matter was taken in the apex Court. The Apex Court took the view that the judgment of the learned Company Judge, rejecting the objections cannot be sustained. The ratio of the aforesaid judgment (three Judges’ Bench) also supports, the contention of learned Counsel for the appellant. 38. When statutory appeal is provided against the decision of the Recovery Officer confirming the sale, which sale is being conducted in accordance with the 1993 Act, we are of the view that it was open for the Official Liquidator to file an appeal and raise his grievances before the Tribunal in accordance with 1993 Act and the learned Company Judge had no jurisdiction to set aside the sale. As noted above, the present was not a case where Official Liquidator was not associated with the sale or was not given any hearing. Even when the auction sale was confirmed on 27.5.2009, the Official Liquidator was present and heard. 39. Although learned counsel for the appellant has challenged the grounds given by the learned Company Judge for setting aside the sale on merits, it is observed that we having taken the view that on the aforesaid grounds as given in the order dated 24.10.2009, it was not open for the learned Company Judge to set aside the sale, we refrain ourselves from expressing any opinion on merits of the grounds in this appeal. As observed above, it was open for the Official Liquidator to take up all the grounds available to him, if he was aggrieved from the auction sale dated 27.2.2009 which was confirmed on 27.5.2009 in accordance with the provisions of the 1993 Act, where the issues could have been gone into and considered. In this appeal, it is not necessary for us to enter into various issues on merits of all the objections or to adjudicate the aforesaid issues. 40. In this appeal, it is not necessary for us to enter into various issues on merits of all the objections or to adjudicate the aforesaid issues. 40. In so far as the submission of learned counsel for the respondents with regard to Section 529 and Section 529-A is concerned, it is relevant to note that Section 529 A of the Companies Act has already been referred to in Section 19(19) of 1993 Act. According to Section 19(19), the Distribution of sale proceeds amongst secured creditors has to be in accordance with the provisions of Section 529-A of the Companies Act. The Official Liquidator, who represent the interest of the workmen has to be associated with the process of distribution of the sale proceeds. It is thus, clear that Official Liquidator has to be associated with the distribution of assets of the Company as per Section 19(19) of 1993 Act and Section 529 of the Companies Act, 1956. 41. In view of the foregoing discussions, the order of the Company Judge dated 24.10.2010 is set aside. The appeal is allowed to the extent indicated above subject to observations as made above. 42. Parties shall bear their own cost. —————