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    Ashish A6

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    Saket Rao
    The Supreme Court case involved an appeal challenging an order of the High Court regarding recovery proceedings initiated by a bank against a sugar company. The High Court had set aside the sale and confirmation of the company's properties in favor of the appellant, finding that the recovery officer disregarded an earlier order of the Company Court. The Supreme Court upheld the High Court's order, noting that (1) the Company Court has the authority to oversee proceedings involving a company under liquidation, and (2) any amounts recovered must first benefit the workers of the company before the bank.

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    Ashish A6

    Uploaded by

    Saket Rao
    38 views10 pages
    The Supreme Court case involved an appeal challenging an order of the High Court regarding recovery proceedings initiated by a bank against a sugar company. The High Court had set aside the sale and confirmation of the company's properties in favor of the appellant, finding that the recovery officer disregarded an earlier order of the Company Court. The Supreme Court upheld the High Court's order, noting that (1) the Company Court has the authority to oversee proceedings involving a company under liquidation, and (2) any amounts recovered must first benefit the workers of the company before the bank.

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    The Supreme Court case involved an appeal challenging an order of the High Court regarding recovery proceedings initiated by a bank against a sugar company. The High Court had set aside the sale and confirmation of the company's properties in favor of the appellant, finding that the recovery officer disregarded an earlier order of the Company Court. The Supreme Court upheld the High Court's order, noting that (1) the Company Court has the authority to oversee proceedings involving a company under liquidation, and (2) any amounts recovered must first benefit the workers of the company before the bank.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    38 views10 pages

    Ashish A6

    Uploaded by

    Saket Rao
    The Supreme Court case involved an appeal challenging an order of the High Court regarding recovery proceedings initiated by a bank against a sugar company. The High Court had set aside the sale and confirmation of the company's properties in favor of the appellant, finding that the recovery officer disregarded an earlier order of the Company Court. The Supreme Court upheld the High Court's order, noting that (1) the Company Court has the authority to oversee proceedings involving a company under liquidation, and (2) any amounts recovered must first benefit the workers of the company before the bank.

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    © All Rights Reserved
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    of 10

    NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL

    Common Law in India – 1st Trimester Project

    ANITA INTERNATIONAL AND ORS.

    VERSUS

    TUNGABADRA SUGAR WORKS MAZDOOR SANGH AND ORS.

    Decided on: 04.07.2016

    Hon'ble Judges/Coram: J.S. Khehar and A.K. Goel, JJ.

    SUBMITTED BY: SUBMITTED TO:

    AASHISH DHAKA PROF. (DR.) GHAYUR ALAM

    SECTION- A

    ROLL NO. – 2017BALLB15

    ENROLLMENT NO. - A-1792


    An Analysis of

    ANITA INTERNATIONAL AND ORS. …… APPELLANT

    VS.

    TUNGABADRA SUGAR WORKS MAZDOOR SANGH AND ORS.


    …… RESPONDENTS

    http://judis.nic.in/supremecourt/imgs1.aspx?filename=43749

    IN THE SUPREME COURT OF INDIA

    CIVIL APPELLATE JURISDICTION

    Civil Appeal Nos. 6042-6048 Of 2011

    NAME OF JUDGES: J.S. Khehar and A.K. Goel, JJ.

    DECIDED ON: 04.07.2016


    TABLE OF CONTENTS

    Sr. No. Particulars Page No.


    1 CONCRETE FACTS
    2 MATERIAL FACTS
    3 QUESTIONS OF LAW AND ANSWERS TO
    THESE QUESTIONS
    4 CONCRETE JUDGEMENT
    5 RATIO DECIDENDI
    6 OBITER DICTA

    CONCRETE FACTS
    (i) Two company petitions were filed by Videocon International Ltd. and Tapti
    Machines Pvt. Ltd., for winding up of Deve Sugars Ltd. before the High Court of
    Madras. Deve Sugars Ltd. was running a sugar factory in the State of Karnataka.
    Deve Sugars Ltd. was ordered to be woud up and the Official Liquidator took
    possession of the assets of Deve Sugars Ltd.

    (ii) State Bank of Mysore filed Company Applications, in the then pending Company
    Petition, seeking leave of Company Court in High Court to pursue recovery
    proceedings before Debt Recovery Tribunal (DRT).

    (iii) Company Court granted leave “…subject to condition that…no coercive


    steps are taken against assets of company during or after conclusion of proceedings
    before Tribunal…”

    (iv) After DRT, issued recovery certificate, State Bank of Mysore filed Company
    Application with a prayer that bank be permitted to seek execution of recovery
    certificate. Registry of High Court, at its own, returned above Company Application,
    by recording an endorsement, that leave of High Court was not necessary.

    (v) Recovery Officer thereafter proceeded with sale of properties of Deve Sugars Ltd.
    Respondent-workers’ union of Deve Sugars Ltd., objected to execution of recovery
    certificate by Recovery Officer. Official Liquidator, who was ordered to be
    impleaded in recovery proceedings initiated by State Bank of Mysore also filed
    objections. Objections were overruled by Recovery Officer.

    (vi)Respondent-workers union, then assailed recovery proceedings, before High Court.


    Videocon International Ltd. and Tapti Machines Pvt. Ltd. also filed writ petitions
    before High Court.

    (vii) In above writ petitions, petitioners assailed sale proceedings before Recovery
    Officer. Based on a preliminary objection raised by Appellant-Anita International,
    High Court relegated petitioners to their alternative remedy under RDB Act, by a
    common order.

    (viii) Above order was challenged through Writ Appeals before High Court. Writ
    Appeals were dismissed.
    (ix)Respondent-workers’ union thereafter preferred AOR No.15 of 2006 and Videocon
    International Ltd. filed AOR No.1 of 2007. In both above matters, a challenged was
    raised to order passed by Recovery Officer, whereby sale of properties of Deve
    Sugars Ltd. to Anita International, was confirmed. Company applications were
    dismissed and a challenge raised to order passed by Recovery Officer was also
    dismissed by High Court.

    (x) Applications filed by Official Liquidator and Ors. were considers collectively (with
    Company Application Nos. 2740-2742 of 2007) and were rejected by a common
    order, whereby all applicants were relegated to their remedy of appeal under RDB
    Act.

    (xi)A challenge raised to above order, by way of an intra-court appeal, was allowed by
    High Court in impugned order, holding that proceedings before Recovery Officer,
    including sale of properties of Deve Sugars Ltd. and confirmation thereof, had been
    conducted in disregard of order of Company Court in High Court passed in
    Company Applications, seeking leave of Company Court in High Court to pursue
    recovery proceedings before DRT.

    (xii) Sale and confirmation of properties of Deve Sugars Ltd. in favour of Anita
    International were accordingly set aside.
    MATERIAL FACTS

    (i) Two company applications were filed by two companies for winding up
    of Deve Sugars Ltd. in Madras High Court.
    (ii)Subsequently State Bank of Mysore filed company application for
    recovery of the loan extended to Deve Sugars Ltd. before the DRT by
    taking a prior permission of Company Court.
    (iii) The recovery officer started the auction process of Deve Sugars
    Ltd. and ultimately was sold to Anita International with a bid of 10.25
    crore rupees while the base price was 10 crore rupees.
    (iv) The two parent companies raised objections that the recovery
    officer dealt unfairly and the evaluation at 10 crore rupees was too low.
    (v) The jurisdiction of DRT was also in question because State Bank of
    Mysore wanted to execute the recovery certificate given by the recovery
    officer.
    (vi) Ultimately the jurisdiction of Company Court and DRT were
    challenged.
    QUESTIONS OF LAW AND ANSWERS TO THESE QUESTIONS

    (i) Whether the order passed by Company Court in High Court, was jurisdictionally
    and legally impermissible, and as such, was liable to be set aside.

     No, it was not impermissible because the acts and proceeding coming in
    the Company Act comes under the Company Court in the High Court.

     The Company Court has all the rights to set aside a sale of property of a
    company which has not paid the dues and profident funds of the
    employees of the company under section 529A of Company Act 1956.

    (ii) Whether the amounts realized under the RDB Act at the instance of the appellant
    can be straight away released in its favor.

     No, the amounts could not be released directly in the favor of applicants.
    The benefit has to be given first to the workers of the company.
    CONCRETE JUDGEMENT

    RATIO DECIDENDI OF THE CASE


    (i) Once an advocate is convicted of an offence involving moral turpitude, his licence to
    practice will stand suspended for a period of two years.
    (ii) The averments regarding the complaints cannot be a defence for the appellant. Even
    if we assume those averments about the complaints to be correct, then also, the
    appellant cannot use such contemptuous language in the Court against the presiding
    Judge.
    (iii) The first thing to be done in that direction when a contemnor is found guilty
    of a criminal contempt is to implant or infuse in his own mind real remorse about his
    conduct which the court found to have amounted to contempt of court. Next step is
    to seek pardon from the court concerned for what he did on the ground that he really
    and genuinely repented and that he has resolved not to commit any such act in
    future.
    (iv)It is not enough that person tenders an apology. The apology tendered should
    impress the court to be genuine and sincere. If the court, on being impressed of his
    genuineness, accepts the apology then it could be said that the contemnor has purged
    himself of the guilt.

    OBITER DICTA
    Legal profession being the most important component of justice delivery system, it must
    continue to perform its significant role and regulatory mechanism and should not be seen to
    be wanting in taking prompt action against any malpractice. The court has noticed the
    inaction of the Bar Council of Uttar Pradesh as well as the Bar Council of India in spite of
    direction of the High Court and in spite of notice to the Bar Council of India by this Court.
    The court has also noticed the failure of all concerned to advert to the observations made by
    the Gujarat High Court 33 years ago. In view of above, the court requested the Law
    Commission of India and the Government of India to go into all relevant aspects relating to
    Regulation of legal profession in consultation with all concerned at an early date.

    Thus, there appears to be urgent need to review the provisions of the Advocates Act dealing
    with regulatory mechanism for the legal profession and other incidental issues, in
    consultation with all concerned.

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