ALLAHABAD BANK v. CANARA BANK AND ANR.

p. 1143 Copy page pinpoint

-- But the point here is that the occasion for such a claim by a secured creditor (here the Canara Bank) against realisations by other creditors (like A

the Allahabad Bank) under section 529A read with proviso (c) to section 529(1) can arise before the Tribunal only if the Canara Bank has stood outside winding up and realised amounts and if it shows that out of the amounts privately realised by it, some portion has been rateably taken away l>y the B liquidator under sub-clauses (a) and (b) of the proviso to section 529(1). It is only then that it can claim that it is to be re-imbursed at the same level as a secured creditor with priority over the realisations of other creditors lying in the Tribunal. None of these conditions is satisfied by Canara Bank. Thus, Canara Bank does not belong, to the class of secured creditors covered by section 529A(l)(b). c Therefore, the result is that the Canara Bank cannot rely on the words in section 19(19) vis, "to be distributed among its secured creditors" for claiming any amount lying in the Tribunal towards its security nor can it claim priority as against the Allahabad Bank. D If none of the conditions required for applying section 19(19) and section 529A is, therefore, satisfied, then the claim of Canara Bank before the Tribunal can only be on the basis of principles underlying section 73 CPC. There being no decree in its favour from any court or from any Tribunal, and ..the other conditions of section 73 not having been satisfied, no dividend can E be claimed out of monies realised at the instance of the Allahabad Bank, even if the All~abad Bank is an unsecured creditor.

We hold accordingly on points 4 and 5.

Point 6: F By the sale of Shed No.15, a sum of Rs.20 lakhs has been realised and is lying in this Court. Other sale proceeds in respect of previous sales are lying with the Recovery Officer. In view of our findings on points 1 to 5, no ' part of the said amounts is payable to the Canara Bank. G The next question is whether the amounts realised under the RDB Act at the instance of the appellant can be straightway released in its favour. Now, even if section 19(19) read with section 529A of the Companies Act does not help the respondent-Canara Bank, the said provisions can still have an impact on the appellant- Allahabad Bank which has no doubt a decree in its favour H

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A passed by the Tribunal. Its dues are unsecured. The 'workmen's dues' have priority over all other creditors, secured and unsecured because of section 529A(l)(a). There is no material before us to hold that workmen's dues of - the defendant company have all been paid. In view of the general principles laid down in National Textile Workers' Union etc. v. P.R.Ramakrishnan & ... -. t

B Others, AIR (1983) SC 75 there is an obligation resting on this Court to see that no secured or unsecured creditors including Banks or financial institu- tions, are paid before the workmen's dues are paid. We are, therefore, unable to release any amounts in favour of the appellant Bank straightway.

. We, therefore, direct the Registry of the Supreme Court to make over c the monies deposited in this Court pursuant to sale of Shed No.15, to the Debt Recovery Tribunal, Delhi and it will be for the said Tribunal to find out if there are any workmen's dues by issuing notice to the workmen or other persons/bodies which can furnish information in this behalf. The above monies to be sent from this Court as well as the monies realised by earlier sales,- in case they are not subject to any pending litigation - have to be first D released towards the workmen's dues. The balance remaining will then .be released in favour of the appellant Bank in accordance with law and subject to the various principles stated in this judgment. In case any machinery or goods pledged to the Canara Bank are lying in the two other sheds already sold, it will be open to the Canara Bank to move the Tribunal/Recovery E Officer for their removal and for an inventory. The impugned order of the High Court is set aside, the appeal is allowed and disposed of as stated above. There will be no order as to costs.

V.M. Appeal allowed.