Hon'ble Judges/Coram:
M. Jagannadha Rao and N. Santosh Hegde

JUDGMENT

M. Jagannadha Rao, J.

1. Leave granted.

2. The case raises issues relating to the impact of the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter called the RDB Act) on the provisions of the Companies Act, 1956. The immediate dispute before us is between two nationalised Banks, the Allahabad Bank (appellant) on the one hand which has obtained a simple money decree against the debtor-company [M/s. M.S. Shoes (East) Co, Ltd.] from the Debt Recovery Tribunal at Delhi under the RDB Act and the Canara Bank on the other, whose claim as a secured creditor is still pending before the same Tribunal at Delhi against the same company. The Allahabad Bank has appealed before us against an order passed by the learned Company Judge under Sections 442 and 537 of the Companies Act, (in a winding up petition by Ranbaxy Ltd.) staying the sale proceedings taken out by the Allahabad Bank before the Recovery Officer under the RDB Act. Applications for winding up the defendant company are pending in the Delhi High Court. As yet no winding up order has been passed nor a provisional liquidator appointed as contemplated by Section 446(1). Point has been raised by the respondent - Canara Bank that the appellant-Allahabad Bank is obliged to seek leave of the Company Court under the Companies Act, 1956 and the Company Court can stay these proceedings as aforesaid under Sections 442 and 537 for the ultimate purpose of deciding the priorities, in the event of a winding up order or other order appointing a provisional liquidator being passed under Section 446(1) of the Companies Act, 1956. After the appellant obtained decree from the Debt Recovery Tribunal, some properties of the company have been sold by the Recovery Officer. Appellant contends that the Tribunal under the RDB Act can itself deal with the question of appropriation of sale proceeds in respect of sales of the company properties held at the instance of the appellant and the priorities and that the appellant alone is entitled to all the sums so realised.

3. The matter was argued and judgment was reserved. Thereafter, our attention was invited by the learned Counsel for the respondent - Canara Bank to the Amending Ordinance(Ordinance 1 of 2000) which came into force with effect from 17.1.2000. The effect of the Ordinance and in particular Section 19(19) then fell for consideration. Question of distribution of the sale proceeds by Company Court/ Tribunal and method of working out priorities among creditors was argued.

4. The facts of the case are as follows:

The appellant Bank filed O.A. No. 109 of 1995 before the Debt Recovery Tribunal, Delhi under Section 19 of the RDB Act, 1993 for recovery of Rs. 21,49,29,520 and a simple money decree was passed on 13.1.1998 with interest at 18% and interest tax levy at 0.75% p.a. Recovery Case (R.C. No. 9 of 98) was filed by the Allahabad Bank for recovery before the Recovery Officer. The debtor Company filed appeal No. 270 of 1998 before the a........