1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. NOTICE OF MOTION NO.1150 OF 2009 IN SUIT NO.2686 OF 1998 Credit Capital Investment Trust Co. Ltd. & Anr. ...Plaintiffs. Versus The O.L. High Court of Gujarat as Liquidator of Motorol (India) Ltd.& Ors. ...Defendants. ....... Ms.Saumya Srikrishna i/b. Kanga & Co. for the Plaintiffs. Ms.Richa Bhardwaj with Mr.Nilesh Gala i/b. Shah & Sanghavi for Defendant Nos.2 and 8. Mr.Chirag Balsara with Mr.Mihir Mody i/b. M/s.K. Ashar & Co. for Defendant No.6. ...... CORAM : DR. D.Y. CHANDRACHUD, J. September 17, 2009. P.C.: By consent, the Motion is taken up for final disposal. 2. The reliefs that have been sought in the Motion for interim relief are: (i) A direction to the Prothonotary & Senior Master to pay to the Plaintiffs, a sum of Rs. 3.35 crores together with interest accrued, upon the sale of Plot No.8 and 10 comprised in Revenue Survey No.73, Village Duniya, Taluka Halol, District Panchmahal, 2 Gujarat; and (ii) A direction to the Official Liquidator of the High Court of Gujarat to deposit in this Court, the balance of the sale consideration of Rs.65 lakhs. -3. The Plaintiffs as sole trustee of Taurus Mutual Fund sued the First Defendant for dues claimed to be payable to the First Plaintiff in relation to debentures issued by the First Defendant to the Plaintiffs. The Plaintiffs claim that the First Defendant secured the First Plaintiff by a mortgage of the property set out in Exhibit-J to the Plaint. The First Defendant was ordered to be wound up in proceedings before the Gujarat High Court and the Official Liquidator came to be appointed as Liquidator. The Official Liquidator has been brought on the record in the suit. By an interim order dated 11th October 2001, a Learned Single Judge of this Court, while permitting the Plaintiffs to continue outside the winding up proceedings, directed the Official Liquidator to sell the immovable property more particularly described in Exhibit-J to the Plaint and to deposit the amount realised from the sale with the Prothonotary & Senior Master of this Court. Parties were granted liberty by this Court to file an 3 independent motion for a separate direction in respect of the moneys received. -4. The Official Liquidator, the Court is informed, has sold the property in question, and moneys have been realized. According to the Plaintiffs, on 5th August 2008, the High Court of Gujarat confirmed the sale and in pursuance thereof, an amount of Rs.4 crores was received by the Official Liquidator of which an amount of Rs. 3.35 crores has been remitted to the Prothonotary & Senior Master. As noted earlier, the relief that has been sought is a direction to the Prothonotary & Senior Master to remit to the Plaintiffs, the amount of Rs. 3.35 crores together with a further direction to the Official Liquidator, High Court of Gujarat to pay over to the Prothonotary & Senior Master, the balance of Rs.65 lakhs. -5. The application has been opposed by the Bank of Baroda which is the Sixth Defendant to the suit. The Bank of Baroda had a prior charge which was created in its favour on 17th October 1995 by the deposit of title deeds. The Bank had instituted proceedings 4 before the Debts Recovery Tribunal at Ahmedabad for the recovery of its dues and for enforcement of its claim. The Debts Recovery Tribunal by its judgment dated 28th December 2006, allowed the application preferred by Bank of Baroda. The Debts Recovery Tribunal held that the Bank had filed documents showing that its charge was registered with the Registrar of Companies and that the First Defendant had created a charge on its property in its favour. The claim of the Bank was decreed in the amount of Rs. 5.25 crores which was to carry interest at 6% per annum with effect from 1st May 1998. -6. The relief that has been sought by the Plaintiffs for the disbursal of its claim in the amount of Rs. 3.35 crores and for a direction to the Liquidator to transmit the balance of Rs.65 lakhs, cannot be granted for more than one reason. Firstly, the Debts Recovery Tribunal has passed an order enforcing the first charge of the Bank of Baroda in proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act. The Debts Recovery Tribunal had exclusive jurisdiction to entertain and try the claim. By virtue of the provisions of Section 34(1) of that Act, the RDB Act has overriding 5 force and effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. In view of the judgment of the Supreme Court in Allahabad Bank vs. Canara Bank, AIR 2000 SC 1535, no other Court, including the Company Court would have jurisdiction to entertain any plea inconsistent with the exercise of jurisdiction by the Debts Recovery Tribunal. -7. The contention of Counsel appearing on behalf of the Plaintiffs is that the charge in favour of the Sixth Defendant has been registered only in respect of Plot No.10 with the Registrar of Companies under Section 125 of the Companies' Act, 1956 and not in respect of Plot No.8. The submission cannot be entertained for the reason that the Debts Recovery Tribunal by its judgment has clearly ruled that the Bank had a valid first charge and that the charge extends in respect of both the properties. To hold to the contrary would be to nullify and negate the effect of the judgment of the Debts Recovery Tribunal; something that would not be permissible for this Court to do for that will run contrary to the exclusive jurisdiction of the Debts Recovery Tribunal. In these circumstances, for the reasons 6 already indicated, the Plaintiffs would not be entitled to relief in the Notice of Motion. The priorities, if any, would have to be worked out by the Debts Recovery Tribunal, including in the course of the execution proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act. Secondly, the supplementary memorandum of 5th October 1996 upon which the Plaintiffs rely (Exhibit-T to the Plaint) and the indenture of mortgage dated 7th December 1996 (Exhibit K to the Plaint), both contemplate that the Plaintiffs have a second charge on the immovable assets of the First Defendant which is now in liquidation. The Deed of mortgage dated 7th December 1996 places the matter beyond doubt in that it provides in Clause 6(1) that the charge in favour of the Plaintiffs is subject only to the first charge created in favour of the Bank of Baroda for the working capital facility of Rs. 12 crores and the pari pasu charge in favour of Canbank Mutual Fund for certain non-convertible debentures. 8. The Motion is dismissed. ......