Case: M/S Anita International Vs. Tungabadra Sugar Works Maz.Sangh

course can never be permitted. 46. To be fair to learned counsel for the appellants, it needs to be noticed, that reliance was also placed on behalf of the appellants on the Kiran Singh, the Sadashiv Prasad Singh, and the Jagmittar Sain Bhagat cases, to contend, that a decree passed by a Court without jurisdiction was a nullity, and that, its invalidity could not be corrected, even by the consent of the concerned parties. We are of the considered view, that the proposition debated and concluded in the judgments relied upon by learned counsel for the appellants (referred to above) are of no relevance, to the conclusions drawn in the foregoing paragraph. In our determination hereinabove, we have not held, that a void order can be legitimized. What we have concluded in the foregoing paragraph is, that while an order passed by a Court subsists, the same is liable to be complied with, till it is set aside. 47. The submission canvassed at the hands of learned counsel for the appellants, that the impugned sale dated 11.8.2005, and its confirmation on 12.9.2005, should not be interfered with on the ground of equity, as the appellant had made the entire payment in 2005, and the Recovery Officer had ordered confirmation of the sale, as no objection had been raised against the same. We find it difficult to persuade ourselves to accept the above contention. In this behalf, one cannot lose sight of the fact that the Official Liquidator, as well as, the workers union had raised objections before the Recovery Officer at the very initial stage. Even a former Director of Deve Sugars Ltd. - N. Ponnusamy raised a challenge to the proceedings before the Recovery Officer by asserting, that the reserve price of Rs. 10 crores fixed for the property being put to auction, was too low. The fact, that in the process of sale of the properties of Deve Sugars Ltd. only two bids were received, has not been disputed. It is also not disputed, that whilst one of the bidders was the appellant - Anita International, the other bidder was Synergy Steel Ltd. - a sister company of the appellant. In sum and substance therefore, there was only one bidder. For the above reasons, in addition to those recorded by the High Court (noticed in paragraph xxx 12 xxx, hereinabove), it is not possible for us to accept the claim of the appellant on the ground of equity. Reliance placed by learned counsel on the judgments rendered by this Court, in support of the instant contention, is also unacceptable, as the factual position in the judgments relied upon, are inapplicable to the facts and circumstances of this case. In view of the above, we find no merit in the contention advanced. 48. It was also submitted on behalf of the appellants, that the sale conducted by the Recovery Officer on 11.8.2005, and the order of confirmation thereof passed by the Recovery Officer on 12.9.2005, ought to have been assailed only in proceedings under Section 30 of the RDB Act. It was submitted, that since an efficacious alternative remedy was available to the parties, which had approached the Company Court in the High Court at Madras, the interference at the hands of the High Court was neither just nor proper. The instant submission is wholly devoid of substance and deserves to be rejected. We are of the considered view, that there was sufficient justification for the parties to have approached the Company Court in the High Court at Madras, for the reason that they were seeking the enforcement of the order dated 10.3.2000, passed by the Company Court itself. The sale made by the Recovery Officer on 11.8.2005, and its confirmation on 12.9.2005, were in utter violation of the order dated 10.3.2000, and therefore, the concerned parties were justified in approaching the High Court at Madras. In the above view of the matter, we find no merit in the instant contention as well. 49. Last of all, we may advert to the contention, that the order dated 10.3.2000 passed by the Company Court in the High Court at Madras, while disposing of Company Application Nos. 1251-1253 of 1999, filed by the State Bank of Mysore, was not binding on the appellant. Insofar as the instant contention is concerned, it was submitted, that the said order passed by the High Court was an order in personam, and as such, the aforesaid order could not be considered as an order binding on the appellant before this Court. We find no merit in the instant contention, as well. In this behalf, it would be relevant to mention, that in the application filed by the State Bank of Mysore, the prayer made was, that the State Bank of Mysore be permitted, leave to proceed with recovery proceedings before the DRT, Bangalore. By the order dated 10.3.2000, the Company Court in the High Court at Madras, while granting leave, imposed two conditions. Firstly, the Official Liquidator would have to be impleaded by the bank in the recovery proceedings before the DRT, Bangalore. And secondly, no coercive steps would be taken against the assets of the company during or after the conclusion of the proceedings before the Tribunal. It is not possible for us to accept, that the aforesaid order passed by the High Court was an order in personam. We are of the view, that the above order had a clear and binding effect on the proceedings permitted to be initiated before the DRT, Bangalore, and further, that it was equally binding on the Recovery Officer. And accordingly, in our view, the same would also be binding on those claiming through sale proceedings conducted by the Recovery Officer. In the above view of the matter, there can be no doubt, that the order dated 10.3.2000 was also binding on the appellant before this Court. For the above reasons, we find no merit even in the last contention advanced by learned counsel for the appellants.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]31. We have given our thoughtful consideration to the complicated sequence of facts projected before us, as also, the legal submissions advanced at the hands of learned counsel for the rival parties. We shall now endeavour to record our conclusions, with reference to the issues canvassed32. In our considered view, the controversy projected for our consideration falls in a narrow compass. It is apposite, to crystalise the dimensions of the dispute. Deve Sugars Ltd. was ordered to be wound up on 16.4.1999 (in Company Petition No.170 of 1995). The Official Liquidator took possession of the assets of Deve Sugars Ltd. situated at Harige on 28.9.1999. The State Bank of Mysore filed Company Application Nos.33. After the DRT, Bangalore issued the recovery certificate dated 15.5.2002, the State Bank of Mysore filed Company Application No. 1300 of 2003, with a prayer that the bank be permitted to seek execution of the recovery certificate. It is not a matter of dispute, that the Company Court in the High Court at Madras, neither heard nor passed any order on the above application. The admitted position is, that the Registry of the High Court, at its own, returned the above Company Application No.1300 of2003,35. The workers union, then assailed the recovery proceedings, before the High Court of Karnataka, by filing Writ Petition No.37991 of 2004. Videocon International Ltd. and Tapti Machines Pvt. Ltd. also filed Writ Petition No.26564 of 2005, before the High Court of Karnataka. In the above writ petitions, the petitioners assailed the sale proceedings before the Recovery Officer. Based on a preliminary objection raised by the appellant37. It would be relevant to mention, that as against the reserve price of Rs. 10 crores, Anita Internationalthe appellant herein, made a bid of Rs. 10.25 crores. The same was accepted by the Recovery Officer on 11.8.2005, and confirmed on 12.9.2005. One N. Ponnusamy filed Company Application Nos.38. The applications filed by the Official Liquidator and others were considered collectively (with Company Application Nos.2 of 2007) and were rejected by a common order dated 3.3.2009, whereby all the applicants were relegated to their remedy of appeal under the RDB Act. A challenge raised to the above order dated 3.3.2009, by way of ant appeal, was allowed by the High Court, on 17.9.2009. It is this order, which is subject matter of challenge before this Court. Stated concisely, the High Court expressed the view, that the proceedings before the Recovery Officer, including the sale of the properties of Deve Sugars Ltd. on 11.8.2005 and the confirmation thereof on 12.9.2005, had been conducted in disregard of the order of the Company Court in the High Court at Madras, dated 10.3.2000 (in Company Application Nos.41. According to learned counsel for the appellants, it was apparent, that the action of a Recovery Officer in conducting sale proceedings and ordering the confirmation thereof for executing a recovery certificate fell squarely within his jurisdiction under the RDBAct. Andhis jurisdiction being exclusive, as declared by this Court could not be interfered with or set aside. It is in the above context, that it was also the pointed assertion of learned counsel representing the appellant, that the order passed by the Company Court in the High Court at Madras dated 10.3.2000 was without jurisdiction. Learned counsel representing the appellant however cautioned this Court, not to confuse the power of the Recovery Officer in executing recovery certificates (through sale of the debtors properties), with the apportionment of the sale proceeds. It was urged, that the concern of the appellantAnita International, was limited to the sale of the properties of Deve Sugars Ltd., which it had purchased on 11.8.2005, which was confirmed by the Recovery Officer on 12.9.2005. It was submitted, that the appellant46. To be fair to learned counsel for the appellants, it needs to be noticed, that reliance was also placed on behalf of the appellants on the Kiran, the Sadashiv Prasad, and the Jagmittar Sain47. The submission canvassed at the hands of learned counsel for the appellants, that the impugned sale dated 11.8.2005, and its confirmation on 12.9.2005, should not be interfered with on the ground of equity, as the appellant had made the entire payment in 2005, and the Recovery Officer had ordered confirmation of the sale, as no objection had been raised against the same. We find it difficult to persuade ourselves to accept the above contention. In this behalf, one cannot lose sight of the fact that the Official Liquidator, as well as, the workers union had raised objections before the Recovery Officer at the very initial stage. Even a former Director of Deve Sugars Ltd.N. Ponnusamy raised a challenge to the proceedings before the Recovery Officer by asserting, that the reserve price of Rs. 10 crores fixed for the property being put to auction, was too low. The fact, that in the process of sale of the properties of Deve Sugars Ltd. only two bids were received, has not been disputed. It is also not disputed, that whilst one of the bidders was the appellantAnita International, the other bidder was Synergy Steel Ltd.48. It was also submitted on behalf of the appellants, that the sale conducted by the Recovery Officer on 11.8.2005, and the order of confirmation thereof passed by the Recovery Officer on 12.9.2005, ought to have been assailed only in proceedings under Section 30 of the RDB Act. It was submitted, that since an efficacious alternative remedy was available to the parties, which had approached the Company Court in the High Court at Madras, the interference at the hands of the High Court was neither just nor49. Last of all, we may advert to the contention, that the order dated 10.3.2000 passed by the Company Court in the High Court at Madras, while disposing of Company Application Nos.3 of 1999, filed by the State Bank of Mysore, was not binding on the appellant. Insofar as the instant contention is concerned, it was submitted, that the said order passed by the High Court was an order in personam, and as such, the aforesaid order could not be considered as an order binding on the appellant before this Court. We find no merit in the instant contention, as well. In this behalf, it would be relevant to mention, that in the application filed by the State Bank of Mysore, the prayer made was, that the State Bank of Mysore be permitted, leave to proceed with recovery proceedings before the DRT, Bangalore. By the order dated 10.3.2000, the Company Court in the High Court at Madras, while granting leave, imposed two conditions. Firstly, the Official Liquidator would have to be impleaded by the bank in the recovery proceedings before the DRT, Bangalore. And secondly, no coercive steps would be taken against the assets of the company during or after the conclusion of the proceedings before the Tribunal. It is not possible for us to accept, that the aforesaid order passed by the High Court was an order in personam. We are of the view, that the above order had a clear and binding effect on the proceedings permitted to be initiated before the DRT, Bangalore, and further, that it was equally binding on the Recovery Officer. And accordingly, in our view, the same would also be binding on those claiming through sale proceedings conducted by the Recovery Officer. In the above view of the matter, there can be no doubt, that the order dated 10.3.2000 was also binding on the appellant before this Court. For the above reasons, we find no merit even in the last contention advanced by learned counsel for the appellants