OSA 76/2009 and 4th Respondent in OSA 77/2009 and 3rd Respondent in OSA 82/2009 Ponnusamy .. Appellant in OSA 61, 62, 63, 76 & 77/2009 vs
1.Subhash Kathuria Sole Proprietor Anitha International 55B, Rama Road, Industrial Area New Delhi 110 015. .. 1st Respondent in OSA 59, 77 & 82/2009
2.The Official Liquidator High Court Madras as Liquidator of Deve Sugars Limited (Company in Liquidation) High Court, Chennai 104. .. 2nd Respondent in OSA 59, 77 & 82/2009 and 1st respondent in OSA 60, 61, 62, 63 & 76/2009
3.Tapti Machines Private Limited 171C, Mittal Court, Nariman Point Mumbai 400 021 represented by its Authorised Signatory M.Gopal residing at 73/2, Nandidurga Road Bangalore 560 046. .. 3rd Respondent in OSA 59, 77/2009 and Appellant in OSA 82/2009
4.State Bank of Mysore Main Branch, B.H.Road Shimoga Represented by its Chief Manager .. 2nd Respondent in OSA 60, 61, 62, 63 & 76/2009
5.The Recovery Officer Debts Recovery Tribunal Bangalore, Krishi Bhavan Hudson Circle, Bangalore .. 3rd Respondent in OSA 60 & 76/2009 and 4th Respondent in OSA 61, 62 & 63/2009
6.Central Warehousing Corporation No.9, Mission Road, Bangalore 560 029. .. 4th Respondent in OSA 60 & 76/2009
7.Anita International 55-B, Rama Road Industrial Area New Delhi 110 015. .. 3rd Respondent in OSA 61, 62 & 63/2009 Original Side Appeals preferred under Order XXXVI Rule 9 of O.S. Rules read with
Section 483 of the Companies Act 1956 and Clause 15 of Letters Patent against the common order of this Court made in C.A.No.1811 of 2005, 854 of 2006 and 2740, 2741 and 2742 of 2007 in CP No.170 of 1995 dated 3.3.2009.
For Appellants : Mr.V.Prakash Senior Counsel for M/s.Ramapriya for Appellant in OSA 59 & 60/09 and R5 in OSA 76/09, R4 in OSA 77/09 & R3 in OSA 82/09 Mr.Karthik Seshadri for Appellant in OSA 61 to 63, 76 & 77/09 Mr.Sathish Parasaran for Appellant in OSA 82/09 & R3 in OSA 59 & 77/09 For Respondent : Mr.T.K.Seshadri Senior Counsel for Mr.P.B.Ramanujam for R1 in OSA 59, 77 & 82/09 & R3 in OSA 61, 62 & 63/09 ` Mr.AR.L.Sundaresan Senior Counsel for Mrs.K.Latha Parimala Vardhana Addl. O.L. for O.L.
For R2 in OSA 59, 76, 77, 82/09 & R1 in OSA 60 to 63/09 Mr.R.Ravichandran for R2 in OSA 60 to 63/09 COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.) All these appeals challenge a common order of the learned Single Judge of this Court made in C.A.Nos.1811 of 2005, 854 of 2006 and 2740 to 2742 of 2007 in C.P.Nos.170 of 1995.
2.All the above appeals have been filed under the following facts and circumstances:
(a) One M/s.Dev Sugars Limited was ordered to be wound up in C.P.No.170 of 1995 and C.P.No.35 of 1997 by an order dated 16.9.1999. An Official Liquidator was appointed who took possession of the assets of the company on 28.9.1999. State Bank of Mysore who extended financial assistance to the said company, in order to secure the outstanding dues, filed O.A.No.440 of 1997 before the Debt Recovery Tribunal (DRT), Bangalore, for recovery of a sum of Rs.22,31,78,558.55. After the decree was made in the said O.A., the Recovery Officer issued an official notice for the sale of the properties in various newspapers fixing the date of auction as 11.8.2005. Since the said company was ordered to be wound up, the Official Liquidator of the company raised his objections before the Tribunal at Bangalore. The auction was directed to be held by the Debt Recovery Tribunal. The applicant in C.A.No.1811/2005 a third party, participated in the auction and his offer of Rs.10.25 crores being the highest was accepted by the Recovery Officer. The applicant deposited 25% on the same day, and the balance amount was also deposited in time as directed by the Tribunal. The said auction sale was confirmed by the Recovery Officer on 12.9.2005, and a letter of confirmation was also issued to the applicant.
(b) The State Bank of Mysore obtained prior permission from the Court for selling the properties of the company. After the issuance of the sale confirmation letter, the applicant approached the Official Liquidator to hand over possession of the property of the company in liquidation. Since no action was taken by the Official Liquidator, the DRT by letter dated 26.10.2005 also wrote to the Official Liquidator directing him to withdraw the security personnel appointed by him to enable the DRT to hand over possession of the property. The Recovery Officer also wrote a letter on 23.9.2005 to the Chief Secretary, Government of Karnataka, to provide securities for the properties of the company in liquidation. A receiver was also appointed by the Recovery Officer to hand over possession. In such circumstances, the auction purchaser of the property filed C.A.No.1811/2005 seeking for a direction to the Official Liquidator to remove the Security Guards and hand over possession of the property.
(c) While the matter was pending, C.A.No.250 of 2006 was filed by M/s.Thungabadra Sugar Works Mazdoor Sangha, represented by its President to implead them as a party in C.A.No.1811/2005 alleging that State Bank of Mysore approached the Court for permission, and the Company Court in C.A.Nos.1251 to 1253 of 1999 permitted the applicant/Bank on 10.3.2000 in O.A.Nos.440 and 1300 of 1997 by imposing a condition that the leave granted was subject to the condition that the Official Liquidator was impleaded, and no coercive steps were taken against the assets of the company during or after the conclusion of the proceedings before the Tribunal; that the members of the Sangh were appointed as Security men by the Official Liquidator to protect the assets of company with effect from 1.8.2001 on a monthly salary basis; that the DRT, Bangalore, passed a decree in 2001 and ordered for sale by auction of the assets of the company on 1.10.2004; that the Worker's Union objected to the sale and filed a writ petition before the High Court of Karnataka seeking stay of the sale by auction proceedings as their salary and provident fund dues to the extent of Rs.15 crores were due from the company; that the High Court of Karnataka by an order dated 27.9.2004 made an interim order to the effect that the sale was subject to the result of the writ petition; that in view of the said order, the Recovery Officer of the DRT postponed the auction proceedings to be held on 1.10.2004; but, again the DRT called for the auction of the property by fixing the date as 11.8.2005; that the Sangh filed a fresh affidavit before the High Court, Karnataka, in W.P.No.37991 of 2004 objecting to the methods adopted by the DRT; that apart from that, M/s.Tapti Machinery who are the petitioners for winding up of the company and also a creditor of the company objected to the sale and filed objections separately before the Official Liquidator and also before the DRT, Bangalore; that all the objections were rejected by the DRT and the sale was conducted and confirmed in favour of the applicant in C.A.No.1811/2005 who was the successful bidder; that the successful bidder filed a petition before the High Court of Karnataka to implead them as a party in the writ petition and the same was allowed; that after getting himself impleaded in the writ petition, the applicant herein filed a petition to quash the writ petition, but the High Court by order dated 2.12.2005 dismissed that petition filed by the auction purchaser, and under the circumstances, the Sangh is a necessary party.
(d) The said application was allowed as prayed for, and thus the Sangh has become a party. On being impleaded, the Sangh filed a counter affidavit opposing the said application that the property was sold in total violation of the procedures and also interim orders passed by the Court.
(e) Another application in C.A.No.253 of 2006 was filed by M/s.Tapti Machineries (P) Ltd., to implead them as a party in C.A.No.1811 of 2005. The same was allowed by the Court on 1.3.2006 as prayed for. On being impleaded it has filed a counter affidavit stating that they filed C.P.No.35 of 1997 for winding up of the company and C.P.No.170 of 1995 was filed by M/s.Simcom Ltd.; that by order dated 16.9.1999, the Court ordered winding up of the company, and the Official Liquidator was appointed to take possession of the property of the company in liquidation; that the properties were sold for a meagre value of Rs.10.25 crores while it was valued based on Government valuation at Rs.57 crores; that the respondent also filed a writ petition in W.P.No.26564 of 2005 before the High Court of Karnataka challenging the sale proceedings, and the same was also pending; that they were also taking steps for revival of the company; that an application was also filed to that effect before this Court; that the proper and necessary procedure was not followed by the Recovery Officer while selling the property in auction sale which is in the custody of the Official Liquidator; that under the circumstances, the sale had no legal sanctity and hence the application was to be dismissed.
(f) The Official Liquidator filed a report on 31.1.2006 wherein he has stated that he took possession of the available assets of the company on 28.9.1999; that after taking possession, the premises were locked and sealed; that he also appointed the Mazdoor Sangh to safeguard the assets of the company in liquidation with effect from 28.9.1999; that they withdrew their services in the month of December 1999 for the non-payment of the security charges; that on 30.7.2001, a meeting was conducted, and it was decided to appoint M/s.Tungabadra Sugar Works Mazdoor Sangh to safeguard the premises with effect from 1.8.2001 and to make the payment out of the rent amount collected from the Central Warehousing Corporation; that he filed his objections before the DRT, Bangalore, on 1.10.2004, in response to the sale proclamation issued by the DRT; that when the DRT issued a proclamation of sale of property for the second time fixing the date of auction as 11.8.2005, again objections were filed by the Official Liquidator putting forth his objections to the sale; that the valuation of the property has been made on 24.3.2003 by a valuer without the knowledge of the official liquidator; that the inventory report dated 25.11.2004, also revealed that the valuation of the property has been done without the knowledge of the Official Liquidator; that in view of the order passed by the Company Court on 10.3.2000 in C.A.Nos.1251 to 1253 of 1999, the sale conducted by the DRT, Bangalore, without the participation and presence of the Official Liquidator is vitiated; that he has also received the copies of the letters addressed to the CBI by the ex-shareholders/directors/promoters of the company in liquidation wherein certain allegations against the Recovery Officer have been made; that under the circumstances, the Official Liquidator sought for a fresh sale by the DRT with the association of the Official Liquidator, and the sale proceeds should be deposited with this Court.
(g) Apart from filing the above report, the Official Liquidator has also made an application in C.A.No.854 of 2006 to set aside the sale confirmed by the DRT and to direct the third respondent Central Warehousing Corporation to remit the arrears of rent to the Official Liquidator and also to permit the Official Liquidator to sell the assets of the company in liquidation afresh.
(h) The first respondent Bank filed a counter questioning the maintainability of C.A.No.854 of 2006.
(i) The learned Single Judge heard the Counsel on either side, allowed C.A.No.1811 of 2005 and dismissed C.A.Nos.854 of 2006 and 2740 to 2742 of 2007. Hence these appeals at the instance of the respective parties.
3.Advancing arguments on behalf of the appellant Sangh in OSA Nos.59 and 60 of 2009, the learned Senior Counsel Mr.V.Prakash would submit that it is pertinent to note that the appellant had very vehemently objected to the auction fixed by the Recovery Officer and filed a writ petition immediately when the first auction was called for and also filed objections before the Recovery Officer when the second auction was called; that the company in liquidation had not paid salaries and wages to the workmen and also statutory payments like gratuity, bonus, EPF Contributions; that the appellant is very interested in ensuring that the assets of the company in liquidation fetched the best price possible; that without reference to the official liquidator, no valuation could be done; that the valuation based on which the upset price came to be fixed by the Recovery Officer was unacceptable and too low; that in the instant case, since the affected party is the official liquidator who is holding the assets in trust for so many claimants, the Company Court's jurisdiction under Sec.446 does not get ousted; that there appears to be serious collusion between the successful bidder and the Recovery Officer; that there was no proper information to the public on the proposed auction, and under the circumstances, the auction sale already conducted has got to be set aside.
4.Advancing arguments on behalf of the appellant in OSA Nos.61 to 63, 76 and 77 of 2009, the learned Counsel Mr.Karthik Seshadri would submit that the order of the Company Court made in CA Nos.1251 to 1253 of 1999 dated 10.3.2000, was not varied or modified till date and hence without the leave of this Court no coercive steps like auction sale, is possible in law; that the proposed auction has been challenged by the Workers' Union even as early as 2004 before the High Court of Karnataka; that the auction held on 11.8.2005 was the subject matter of challenge before the DRT at Bangalore; that since the successful bidder had approached this Court in CA No.1811/2005, the DRT did not pass final orders in the appeal before it; that under the circumstances, the learned Single Judge has erred in coming to the conclusion that there was no challenge to the auction held on 11.8.2005; that the report filed by the official liquidator would go to show that no consultation whatsoever had been undertaken either by the DRT or the secured creditor; that there was no consultation at all, and hence the auction would not bind the first respondent; that it is pertinent to note that only one person participated in the auction namely Subhash Katuria of the third respondent; that the price of Rs.10.25 crores was grossly undervalued considering the Government Gazette value namely Rs.57.25 crores; that there was no proper valuation at all; that apart from that, there was no proper information to the public on the proposed auction, and hence the order of the learned Single Judge has got to be set aside and the auction sale be set aside.
5.The learned Counsel Mr.Sathish Parasaran appearing for the appellant in OSA No.82 of 2009 would submit that the auction proceedings were challenged not by one party but by several others including the Official Liquidator, Workers' Union, Central Warehousing Corporation and the appellant herein; that the auction itself was hurriedly and irregularly conducted by the Recovery Officer during the pendency of the above proceedings; that the valuation report and the inventory report were prepared without notice to or involvement of the Official Liquidator; that the said valuation was imaginary; that the impugned order is vitiated in view of the pendency of the appeals before the DRT challenging the auction; that it is pertinent to note that both the conduct of the auction sale and its confirmation by the Recovery Officer himself and the illegality of the auction were yet to be determined by the DRT in the appeal preferred by the appellant; that the orders of the Recovery Officer were passed subsequent to the winding up order passed by the Company Court; that the auction is clearly violative of the earlier directions of this Court issued on 10.3.2000; that no notice of proclamation of sale was served on the official liquidator; that the Recovery Officer rejected the objection memo dated 30.9.2004 filed by the official liquidator in a casual manner and without assigning any cogent reasons; that it is pertinent to note that as per
Section 456 of the Companies Act, all the properties of a company in liquidation shall be deemed to be in the custody of the High Court; that the Official Liquidator has to safeguard the interest of the workmen, preferential creditors and other credits in accordance with law; that in the instant case, the Recovery Officer has acted against law and in a manner detrimental to the interest of the workmen, Government and other creditors of the second respondent, and hence the order of the learned Single Judge has got to be set aside.
6.The learned Senior Counsel Mr.T.K.Seshadri, appearing for the first respondent successful bidder put forth the very same contentions in sustaining the order of the learned Single Judge.
7.This Court also heard the learned Senior Counsel Mr.AR.L.Sundaresan appearing on behalf of the Official Liquidator and also the learned Counsel Mr.R.Ravichandran for the second respondent bank.
8.As could be seen above, by an order dated 16.9.1999 made in CP Nos.170/95 and 35/97 by this Court one M/s.Deve Sugars Limited was ordered to be wound up, and the Official Liquidator attached to this Court, was appointed as the Official Liquidator of the company with directions to take charge of all the assets and effects of the company in liquidation. The Official Liquidator accordingly took possession of the assets of the company situated at Harige, Shimoga District, Karnataka State, on 28.9.1999 in the presence of the Deputy Commissioner, Shimoga and the Chief Manager of the State Bank of Mysore, one of the secured creditors of the company. Due to the default in payment of the outstanding dues, the State Bank of Mysore, the second respondent herein, filed OA 440 of 1997 before the Debt Recovery Tribunal, Bangalore, whereby a decree was granted against the company in liquidation to pay a sum of Rs.22,31,78,558.55. Pursuant to the grant of the application and also the certificate, the Recovery Officer issued an order under Rule 38 and Rule 52(2) of the second schedule to the Income Tax Act, 1961 and brought the property owned by the company in liquidation for sale. It cannot be disputed that when the immovable property of the company under liquidation was brought for sale, it stood vested with the Official Liquidator appointed by the Court and in respect of which he has also taken possession. It is pertinent to note that in C.A.Nos.1251 to 1253 of 1999 filed at the instance of the State Bank of Mysore seeking leave to the petitioner bank to proceed and prosecute further O.A.No.440 of 1997 filed by them against the respondent company in the Debt Recovery Tribunal at Bangalore, the Court made the following order:
"Leave is granted subject to the condition that the Official Liquidator is impleaded and no coercive steps against the assets of the company during or after the conclusion of the proceedings before the Tribunal."
9.Now, at this juncture it is pertinent to point out that the above order was never varied, altered or set aside. Pursuant to the said order, the Official Liquidator was also made as a party in C.A.No.440/97. He has put forth his objections. There is nothing to indicate that any of his objections were considered by the Recovery Officer at any point of time. It remains to be stated that a valuation report was prepared on 24.3.2003, and an inventory report was also prepared on 25.11.2004 in respect of the company under winding up. But, no material was placed before the Court to indicate that any notice was given to the Official Liquidator before making valuation of the property. During the relevant time, as pointed out earlier, the entire assets of the company under liquidation was in the exclusive custody and possession of the Official Liquidator. It should be further added that the premises was actually kept under the seal of the Official Liquidator. It is a matter of surprise to note that how the property in the person and exclusive custody of the Official Liquidator could be valued and inventory could be taken even without a notice to him and in his absence and that too when the premises is kept under his seal. It would be indicative of the fact that the valuation and inventory report could have been prepared hastily. Hence those reports could not reflect the real and actual value of the property brought for sale. A memo was filed by the Official Liquidator on 30.9.2004 itself notifying that he has taken possession of the property of the company in liquidation on 28.9.1999 itself and requesting that the sale fixed on 1.10.2004 could be deferred. He has also asked for conduct of the sale of the property jointly. Even the valuation of the property at this juncture can be commented as not only improper and incorrect, but also imaginary.
10.While the proceedings were pending in the hands of the Recovery Officer, W.P.No.37991 of 2004 was filed by Tungabhadra Sugar Works Mazdoor Sangha, a Trade Union and others before the High Court of Judicature at Karnataka whereby the petitioners therein complaining that the Official Liquidator who was the custodian of the property belonging to the company under liquidation failed to protect the company and property of the company under liquidation and hence the auction sale in favour of the third respondent herein namely Anitha International, was null and void and also for a mandamus directing the Recovery Officer not to hand over possession. The following part of the judgment of the Karnataka High Court in WP Nos.26564/2005 and 37991/2004 runs as follows:
"16...It is not in dispute that the official liquidator had filed objections to the proclamation of sale. The said objections was rejected by the Recovery Officer. It is useful to extract the observation made by the Recovery Officer while rejecting the objections of the official liquidator.
"While issuing order of proclamation of sale, I considered the memo dated 30.9.04 filed by the Official Liquidator, appointed by the Hon'ble High Court of Chennai, on 01.10.04. The contentions raised therein are in total contrast to the provisions contained in the Second Schedule to the Income Tax Act as well as the Certificate Proceedings. Recovery Officer has to get guided by the provisions made under S.29 as well as S.19(19) of RDDB Act, 1993. Also the guidelines laid down by the Hon'ble Supreme Court of India in Civil Appeal No.2536 of 2000 between Allahabad Bank and Canara Bank, codifying the jurisdiction of Recovery Officer as "exclusive" and its direction to the matter of distribution of sale proceeds (para 50) shall be followed in this case. Hence the contentions of the Official Liquidator are rejected and disposed off as against the principles codified by Hon'ble Supreme Court of India."
17.A perusal of the order which is cryptic would give a clear indication that the Recovery Officer has not applied his mind at all to the contentions raised by the official liquidator. It is no doubt true that the official liquidator is not before this court. But that by itself does not necessarily mean that the order of rejecting the objections of the official liquidator can be sustained. The other objector before the Recovery Officer is the petitioner in the companion writ petition i.e., workers union in respect of their dues from the second respondent company...
18.A perusal of the proceedings before the Recovery Officer would disclose that the objections of the official liquidator as well as of the workers union has been rejected and that has been done in a casual and lackadaisical manner."
11.It is brought to the notice of the Court that the recovery officer has issued paper publication in respect of the inspection of the properties of the company under winding up by intending purchasers by auction sale scheduled on 11.8.2005 just on the previous day of the auction namely 10.8.2005. Even on the day of paper publication, the recovery officer has registered only two bidders and has closed the registration very day. It is contended by the appellants' side that though there were two bidders by name, in reality they were one and the same, the Sale Proprietor of Anitha International, Subhash Kathuria, and hence the auction and the bidding among two bidders were simply a farce. This Court is able to see that the auction sale was hurriedly conducted by the Recovery Officer, and that too pending the proceedings, and the same was subject to the outcome of the proceedings. The recovery officer has also affirmed the sale on 12.9.2005. He could not plead no knowledge of the pendency of the proceedings. At this juncture, it becomes necessary to indicate that this Court by order dated 10.3.2000 in C.A.Nos.1251 to 1253/99 made by the State Bank of Mysore, granted leave to proceed and prosecute the petition in O.A.No.440/97 pending on the file of the Debt Recovery Tribunal, Bangalore, subject to the condition that the Official Liquidator was to be impleaded and there shall be no coercive steps against the assets of the company during or after the conclusion of the proceedings before the Tribunal. The very reading of the order would make it explicit that the Official Liquidator should be made as a party to the proceedings since the entire assets of the company under liquidation was actually vested with the Official Liquidator appointed by this Court, and apart from that, it was also made clear that no coercive steps should be proceeded against the assets of the company during or after the conclusion of the proceedings before the Tribunal. In the face of the above order i.e., not to take any coercive steps against the assets of the company during or after the conclusion of the proceedings before the Tribunal, the secured creditor bank who was the applicant in the O.A., in the considered opinion of the Court, could not proceed against the assets of the company either by bringing the property for sale or otherwise. The said order has become final. Needless to say it would be binding upon the creditor bank. The same was never varied or altered. Under such circumstances, the contention of the second respondent bank that the D.R.T. in exercise of its powers can bring the property for sale, and it has sold the same by public auction accordingly cannot be countenanced.
12.The contention put forth by the learned Counsel for the second respondent that the Official Liquidator filed C.A.No.854 of 2006 seeking to set aside the auction sale made by the Recovery Officer, and the same has been dismissed on merits and if at all, the Official Liquidator can be the party really aggrieved by the order; but, he has not chosen to prefer an appeal cannot be countenanced. It is true that the Official Liquidator has not preferred an appeal. When C.A.No.854 of 2006 filed by him seeking to set aside the sale was dismissed, it is pertinent to point out that he is shown as one of the respondents in the appeals preferred by others, and hence he was entitled to be heard. Apart from that, the property of the company under winding up stood vested in the hands of the Official Liquidator in order to satisfy the rights and interest of the creditors of the company. Under such circumstances, as far as the official liquidator is concerned, as respondent he was entitled to put forth his case, and equally all other appellants can also be considered as parties aggrieved by the order of the learned Single Judge dismissing the respective applications.
13.Much reliance was placed on the decision of the Apex Court reported in 2000 (4) SCC 406 (ALLAHABAD BANK V. CANARA BANK). At this juncture, the learned Senior Counsel for the first respondent would contend that the sale proceedings with regard to the assets of the company in liquidation will have to be continued only by the DRT and not by the Official Liquidator; that the Official Liquidator is to be consulted by the recovery officer while finalising the secured assets and for the purpose of distribution of sale proceeds; that in a given case where the recovery certificate was not issued by the DRT, but the proceedings for recovery of the debts were pending before the DRT, the Official Liquidator cannot proceed and dispose of the immovable assets which were secured in favour of the banks and financial institutions; that once the recovery certificate was issued by the DRT in favour of the banks and financial institutions who were secured creditors, then the sale of the immovable properties cannot be carried out by the Official Liquidator in a winding up proceedings, and such sale is to be conducted only by the Recovery Officer in execution of the recovery certificate issued by the DRT; that the recovery officer could sell the property but only after issuing notice to the official liquidator and after hearing him; that in the instant case, pursuant to the directions of the court, the official liquidator was made a party who has made his objections, and the same was also considered and thereafter the recovery officer has proceeded with the sale of the property; that to ensure proper working with the scheme under the SFC Act, it is necessary to associate the Official Liquidator with the process of sale so that he could 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; that in the instant case, it cannot be disputed that the official liquidator was a party to the proceedings and his objections were taken; that Sec.446 of the Companies Act has no application in the present case once RDB Act applies because Sec.34 expressly envisages over-riding effect to the provisions of 1993 Act; that RDB Act 1993 is a special law and hence would prevail over the general law in the Companies Act; that once the sale is confirmed by the Recovery Officer and the sale certificate was issued, it cannot be stated to be illegal or void; that sanctity should be attached to the auction sale conducted for recovery of the debts due to the banks and financial institutions; and that if such sales are disputed in courts for extraneous reasons, the intending purchasers would be forced to think twice before participating in the auction sale as they are also purchasing litigation.
14.The learned Senior Counsel would conclude that law is settled by the Supreme Court that the secured creditor need not get any leave from Company Court to proceed with the sale of the assets in liquidation and the official liquidator in the instant case was a party, and notice has been issued to him by the secured creditor; that under the circumstances, the order of the Company Court dated 10.3.2000, does not render the sale not binding on the company in liquidation; that the auction in question was not challenged by any one; that the same was confirmed by the recovery officer on 12.9.2005 and hence it has got to be affirmed.
15.In support of the contentions put forth by the learned Counsel for the appellants, they relied on two decisions of the Apex Court reported in (2005) 8 SUPREME COURT CASES 190 (RAJASTHAN STATE FINANCIAL CORPN. AND ANOTHER V. OFFICIAL LIQUIDATOR AND ANOTHER) and in (2008) 7 SUPREME COURT CASES 738 (M.V.JANARDHAN REDDY V. VIJAYA BANK AND OTHERS).
16.In order to solve the controversy, it would be more apt and appropriate to reproduce the relevant part of the judgments relied on by both the parties. In the decision reported in (2000) 4 SCC 406 (ALLAHABAD BANK V. CANARA BANK), the Apex Court has held 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 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 Articles 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 certificate 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:
34. (1) Act to have overriding effect.(1) Save as provided under sub-section (2), the provisions of this Act shall have 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.
24. There is one more reason as to why it must be held that the jurisdiction of the Recovery Officer is exclusive. The Tiwari Committee which recommended the constitution of a Special Tribunal in 1981 for recovery of debts due to banks and financial institutions stated in its report that the exclusive jurisdiction of the Tribunal must relate not only in regard to the adjudication of the liability but also in regard to the execution proceedings. It stated in Annexure XI of its report that all execution proceedings must be taken up only by the Special Tribunal under the Act. In our opinion, in view of the special procedure for recovery prescribed in Chapter V of the Act, and
Section 34, execution of the certificate is also within the exclusive jurisdiction of the Recovery Officer.
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.
30. Learned Attorney General has, in this connection, relied upon Damji Valji Shah v. LIC of India1 to contend that for initiating and continuing proceedings under the RDB Act, no leave of the Company Court is necessary under
Section 446. In that case, a Tribunal was constituted under the Life Insurance Corporation Act, 1956. Question was whether under
Section 446 of the Companies Act, 1956, the said proceedings could be stayed and later be transferred to the Company Court and adjudicated in that Court. It was held that the said proceedings could not be transferred.
Section 15 of the Life Insurance Corporation Act, 1956 which we may say, roughly corresponds to Section 17 of the RDB Act enabled Life Insurance Corporation of India to file a case before a Special Tribunal and recover various amounts from the erstwhile life insurance companies in certain respects.
Section 41 of the LIC Act conferred exclusive jurisdiction on the said Tribunal just like Section 18 of the RDB Act, 1993. There the Company was ordered to be wound up by an order of the Company Court passed under
Section 446(1) on 9-1-1959. The claim was filed by LIC against the Company and its Directors before the Tribunal in 1962. The respondents before the Tribunal contended that the claim could not have been filed in the Tribunal without the leave of the Company Court under
Section 446(1). This Court rejected the said contention and held that though the purpose of
Section 446 was to enable the Company Court to transfer proceedings to itself and to dispose of the suit or proceedings so transferred, unless the Company Court had jurisdiction to decide the questions which were raised before the LIC Tribunal, there was no purpose of requiring leave of the Company Court or permitting transfer. It was held by this Court:
In view of
Section 41 of the LIC Act, the Company Court has no jurisdiction to entertain and adjudicate upon any matter which the Tribunal is empowered to decide or determine under that Act. It is not disputed that the Tribunal has jurisdiction under the Act to entertain and decide matters raised in the petition filed by the Corporation under
Section 15 of the LIC Act. It must follow that the consequential provisions of sub-section (1) of
Section 446 of the Companies Act will not operate on the proceedings which be pending before the Tribunal or which may be sought to be commenced before it. (emphasis supplied) Just as the Company Court was held incompetent to stay or transfer and decide the claims made before the LIC Tribunal because the Company Court could not decide the claims before the LIC Tribunal, the said Court cannot, in our view, decide the claims of banks and financial institutions. On the same parity of reasoning as in Damji Valji Shah case1 there is no need for the appellant to seek leave of the Company Court to proceed with its claim before the Debts Recovery Tribunal or in respect of the execution proceedings before the Recovery Officer. 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:
[T]he provisions of the special Act, i.e., the LIC Act will override the provisions of the general Act, viz., the Companies Act which is an Act relating to companies in general. We are of the view that the appellants 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.
34. While it is true that the principle of purposive interpretation has been applied by the Supreme Court in favour of jurisdiction and powers of the Company Court in Sudarsan Chits (I) Ltd. case3, and other cases the said principle, in our view, cannot be invoked in the present case against the Debts Recovery Tribunal in view of the superior purpose of the RDB Act and the special provisions contained therein. In our opinion, the very same principle mentioned above equally applies to the Tribunal/Recovery Officer under the RDB Act, 1993 because the purpose of the said Act is something more important than the purpose of
Sections 442,446 and
537 of the Companies Act. It was intended that there should be a speedy and summary remedy for recovery of thousands of crores which were due to the banks and to financial institutions, so that the delays occurring in winding-up proceedings could be avoided.
38. At the same time, some High Courts have rightly held that the Companies Act is a general Act and does not prevail under the RDB Act. They have relied upon Union of India v. India Fisheries (P) Ltd.4.
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 Corpn. of Maharashtra Ltd.6 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 Act is a special one. (SCC p. 157, para 9) 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.
49. The decision of the Rajasthan High Court in Rajasthan Finance Corpn. v. Official Liquidator16 relied upon for the respondent cannot be of any help. That was a case which concerned itself with the State Finance Corporation Act, 1951.
Section 537 of the Companies Act was applied and it was held that the Companies Act did not yield to the provisions of the State Finance Corporation Act, 1951. There was no provision in the State Finance Corporation Act, 1951 like
Section 34 which gave overriding effect to its provisions.
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 on 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 529-A 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."
17.Following the above judgment of the Apex Court, the learned Single Judge has agreed with the contentions of the second respondent bank to hold that the sale has become final since it has already been confirmed by the recovery officer, and the sale has become complete and absolute and hence the auction purchaser was entitled to take possession of the property.
18.The Apex Court in a judgment rendered in (2008) 7 SCC 738 (M.V.JANARDHAN REDDY V. VIJAYA BANK AND OTHERS) had an occasion to consider an identical situation as found in the instant case, and it becomes necessary to reproduce the following paragraphs in the judgment which would speak of the factual position that took place in that case.
"3.. To appreciate the controversy raised in the present appeal, few relevant facts may be stated:
Vijaya Bank, Respondent 1 herein (the Bank, for short) filed Original Suit No. 57 of 1989 in the Court of Subordinate Judge, Bhongir against M/s Kran Organics Chemicals (P) Ltd. (in liquidation) (the Company, for short) for recovery of Rs.94,50,524 as also another suit being Original Suit No. 61 of 1989 in the same court for recovery of Rs.6,43,962. Both the suits were decreed by a common judgment dated 24-7-1993. The Bank filed execution applications which were transferred to the Debts Recovery Tribunal on establishment of the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Recovery certificates were issued in favour of the Bank and the Bank was allowed to execute the decree.
4. Since the matter was pending in the Company Court and the Official Liquidator was appointed, the Bank made an application, being Company Application No. 219 of 1996 in Company Petition No. 18 of 1990 in accordance with the provisions of
Section 446 of the Companies Act, 1956 (hereinafter referred to as the Act) read with Rule 117 of the Companies (Court) Rules, 1959 (hereinafter referred to as the Rules) for granting leave to proceed with the sale of the property of the Company.
5. The Company Court vide its order dated 13-8-1999 granted the permission.
6. The Bank then took steps for sale of land and building of the Company. It got valuation report from approved valuer, assessed market value and realisable value, submitted copies of judgment, recovery certificate and valuation report, etc. to the Official Liquidator. It made an application being Company Application No. 187 of 2005 to the Company Court under
Sections 446 and
457 of the Act read with Rule 9 of the Rules praying for acceptance of the valuation report and permit the Bank to sell the property by conducting auction through Recovery Officer, Debts Recovery Tribunal, Hyderabad.
7. On 2-2-2005, the Bank published a notice fixing date of sale as 13-3-2005. A public notice was issued in Vaartha on 9-2-2005. Reserve price was fixed at Rs.45 lakhs. No bidder, however, came forward and auction could not be effected. Same thing was repeated in auction-sales scheduled to be held on 29-5-2005, 8-7-2005 and 14-9-2005. In an auction held on 19-12-2005, the appellant had offered Rs.67.50 lakhs which was the highest bid and it was accepted. The Bank made an application in January 2006 being Company Application No. 73 of 2006 requesting the Company Court to allow the Recovery Officer of the Tribunal to confirm the sale in favour of the appellant and to permit him to issue sale certificate. On 13-2-2006, the Recovery Officer confirmed the sale. It was stated in the said order that the purchasers had purchased the property for a sum of Rs.67,50,000 at a public auction held on 19-12-2005. Full amount of the sale consideration was paid on 3-1-2006. It was then stated:
Accordingly, the said sale is hereby confirmed.
8. According to the appellant, on 23-2-2006, the Official Liquidator submitted a report to the Honble Court wherein he also stated that there was no impediment in confirming the sale. Sale certificate was issued in favour of the appellant on 2-3-2006. The sale was registered on 16-3-2006. On 17-3-2006, however, the Company Judge set aside the sale without issuing notice and without affording an opportunity of hearing to the appellant observing that the sale was not properly conducted and was confirmed without an order from the court. The sale was, therefore, set aside.
9. It appears that an application was made by the appellant to recall the said order. Meanwhile, the Company Judge issued direction to the Official Liquidator to sell the property. Notice was issued by the Official Liquidator for sale of property. The appellant, however, approached the Division Bench of the High Court by filing Original Side Appeal No. 28 of 2006 complaining that an order passed by the Company Judge setting aside the sale was illegal, unlawful, violative of principles of natural justice and fair play inasmuch as no notice was issued and no opportunity of hearing was afforded before passing the said order which adversely affected the appellant. The Division Bench upheld the contention of the appellant, allowed the appeal filed by him and set aside the order passed by the Company Judge. The matter was again ordered to be placed before the learned Company Judge for passing an appropriate order in accordance with law.
10. The learned Company Judge, thereafter, heard the parties and by an order dated 8-9-2006 set aside the sale which was in favour of the appellant and ordered that the amount deposited by the appellant be refunded to him. The appellant approached the Division Bench of the High Court but the Division Bench also dismissed the appeal. The said order is challenged in the present appeal.
11. On 12-2-2007 notice was issued by this Court. The matter thereafter appeared on the board from time to time. Status quo was also granted. Parties were permitted to file replies and a direction was issued to the Registry to place the matter for final hearing on a non-miscellaneous day and that is how the matter has been placed before us."
19.As regards the above case which was in the hands of Their Lordships of the Supreme Court, it is necessary to mention the following which were available in the factual position of that case.
(a) Pursuant to a common judgment in the year 1993, directing the company in liquidation to make payment of Rs.6,43,962/- to the creditor company, the secured creditor filed execution application which was transferred to the recovery tribunal constituted under the RDB Act. The recovery certificates were issued in favour of the bank, and the bank was allowed to execute the decree. Since the matter was pending in the company court and the official liquidator was also appointed, the bank made an application before the company court for getting leave to proceed with the sale of the properties of the company. On the permission granted by the company court, the bank took steps for sale of the building of the company. It placed the recovery certificate and the valuation report etc., to the official liquidator and also made an application before the company court under
Sections 446 and
457 of the Act read with Rule 9 of the Rules praying for acceptance of the valuation report and to permit the bank to sell the property by conducting auction through the Recovery Officer, Debt Recovery Tribunal, Hyderabad. The bank gave notice through publication fixing the date of sale, and the reserve price was also fixed. Since there was no bidder, the same procedure was followed again for the auction sale scheduled to be held on different dates. In an auction held on 19.12.2005, the appellant therein has offered Rs.67.50 lakhs which was the highest bid on that day, and the bank has also accepted the same. The bank made another application before the company court requesting to allow the recovery officer to confirm the sale in favour of the appellant therein and to permit him to issue the sale certificate. Accordingly, the recovery officer confirmed the sale. The Official Liquidator also filed a report before the company court that there was no impediment for confirming the sale. A sale certificate was also issued in favour of the appellant therein, and the same was also registered. But, the learned Company Judge set aside the sale since, in his opinion, the sale was not properly conducted and confirmed without the order of the court.
(b) In an appeal made by the appellant before the Division Bench, the said order was originally set aside stating that no proper opportunity was given to the appellant. The learned Company Judge took up the matter for the second time and after hearing both sides, took the view that the sale was to be set aside and ordered the amount deposited by the appellant to be refunded to him. Aggrieved appellant took the matter before the Division Bench. The Division Bench dismissed the appeal. Under such circumstances, the matter came before the Supreme Court.
20.At this juncture, it is pertinent to point out that as found in the case reported in (2008) 7 SCC 738 referred to above, the second respondent bank in the instant case, sought for leave to proceed with the sale of the property of the company. The company court made an order on 10.3.2000 as referred to above, granting permission on condition that the official liquidator must be made a party, and apart from that, the secured creditor should not adopt coercive process against the assets of the company during or after the conclusion of the proceedings before the Tribunal. Needless to say the sale of the property cannot but be a coercive process for recovery of the amount. In the considered opinion of the Court, the case of the appellants in this case, is on a better footing for the reasons that in the case referred to above namely (2008) 7 SCC 738, though the matter was pending before the DRT and also the recovery officer, the valuation report was filed along with the recovery certificate before the official liquidator. An application was also filed before the company court seeking permission to sell the property by conducting auction through the Recovery Officer, DRT. But, in the instant case, no one of the above procedures was followed. On the contrary, even the objections made by the official liquidator, who was a party to the recovery proceedings, was not even taken for consideration. The recovery officer did not even care to consider the same which necessitated the learned Single Judge of the Karnataka High Court to make a comment that it has been done in a casual and lackadaisical manner. In the case before the Apex Court as referred to above, it was contended by the appellant therein that the auction was held in accordance with law by the authorities and upset price was fixed, and the appellant was the highest bidder, and the same was accepted, and the entire amount was paid, and then the sale was confirmed, and hence it could not be interfered with and set aside by the Court as urged by the learned Senior Counsel for the first respondent in the instant case. It was contended by the respondent's side in that case that the recovery officer had no power, authority or jurisdiction to confirm the sale, and order of confirming the sale made by him was therefore without power or authority, and apart from that, company proceedings were pending before the company court since the company was ordered to be wound up and the official liquidator appointed was in charge of the assets of the company, and he was not taken in confidence nor was he associated with the auction of assets and properties of the company in liquidation and hence the action taken by the recovery officer was contrary to law. The very same contentions are now raised by the appellants in the instant case. It is pertinent to point out that in the case referred to above, the official liquidator has expressed that since he was not associated with the proceedings of sale, he had no comments to offer. But, in the case on hand, the official liquidator has raised all his objections before the recovery officer and that too before the confirmation of the sale, and he has also filed a detailed report expressing his surprise that when the property was in his possession and under his seal, lock and key how the immovable property was valued and also the inventory was taken. It would be more apt and appropriate to reproduce the following paragraph of the judgment of Their Lordships of the Apex Court reported in (2008) 7 SCC 738 which in the considered opinion of the Court would directly apply to the present facts of the case.
"21.Having heard the learned Counsel for the parties and having given anxious consideration to the facts and circumstances in their entirety, in our opinion, it cannot be said that by setting aside sale, either the learned Company Judge or the Division Bench has committed any illegality which deserves interference in exercise of discretionary power under
Article 136 of the Constitution."
21.At the risk of repetition, the Court has to reproduce the order of the company court dated 10.3.2000 which reads as follows:
"Leave is granted subject to the condition that the Official Liquidator is impleaded and no coercive steps against the assets of the company during or after the conclusion of the proceedings before the Tribunal."
22.The second respondent bank having applied to the company court and obtained an order as above, cannot ignore the same. Such an order would be binding on the recovery officer also. It makes abundantly clear that the assets of the company should not be proceeded with by exercise of coercive process which would include the sale of the property by auction. Hence it is not open to the recovery officer either to conduct the sale or confirm the same since it was in clear violation and inconsistent with the order of the company court made on 10.3.2000. The second respondent bank cannot take advantage of the confirmation of the sale by the recovery officer who, in the considered opinion of the court, has acted in violation of the orders of this court and did not possess power to confirm the same. The Apex Court has held in paragraph 28 of the said judgment ((2008) 7 SCC 738) that in our opinion the company court was right in passing the fresh order after hearing the parties, and since the company was in liquidation and the 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. But, in the case on hand, he was not allowed to be associated, and even the valuation of the assets were taken without his knowledge and also the objections raised by him were rejected. Following the decision of the Apex Court referred to above, the Court without any hesitation has to set aside the sale.
23.Speaking of the necessity of the association of the official liquidator in the process of sale, the Apex Court in a judgment reported in (2005) 8 SCC 190 has held thus:
"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 Ltd. The Debts 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."
24.In view of the above position of law laid down by the Apex Court, the sale by the recovery officer and subsequent confirmation have got to be set aside in view of the non-association of the official liquidator in the process of sale which would ensure a proper price for the assets of the company in order to safeguard the interest of all creditors secured and unsecured and also the worker's union, and also it was in violation of the order of the company court referred to above.
25.Hence, the following judgment is made:
(i)The auction sale in question is set aside;
(ii)The auction purchaser is entitled to refund of the monies paid by him towards the auction sale which is now set aside;
(iii)In the interest of all the creditors and also the workers' union, a fresh sale is ordered to be made by the Recovery Officer after following the procedural formalities and after preparation of a fresh valuation done by the panel of valuers appointed by the Company Court with the association of the official liquidator and on acceptance of the same by the Company Court in order to ensure a proper price is fetched for the assets of the company in liquidation.
26.In the result, all these original side appeals are allowed, setting aside the order of the learned Single Judge and leaving the parties to bear their costs. Consequently connected MPs are closed.
nsv