Allahabad Bank vs Canara Bank & Another

The Supreme Court addressed the interplay between the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDB Act) and the Companies Act, 1956, specifically sections 442, 537, and 446(1). The Court held that the Allahabad Bank, having obtained a decree under the RDB Act, must seek leave from the Company Court before proceeding with recovery actions, as the Company Court has the authority to stay such proceedings to determine creditor priorities in the event of winding up. The Court emphasized that the distribution of sale proceeds must consider the claims of all creditors, including the Canara Bank, which is pending before the same Tribunal.