TMI Blog1996 (2) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 ('the said Act'). The facts set out hereinafter do not apply to Mr. Hegde's client and are restricted only to this application. 3. The facts briefly stated are that the custodian had demanded from the Applicants herein a sum of Rs. 24,79,999 with interest thereon. This was the amount due and payable by the Applicants to Fairgrowth Financial Services Ltd., a notified party. The Applicants herein filed Miscellaneous Applicants No. 111 of 1994 praying for time to pay the amount and for return of certain shares which were pledged with Fairgrowth Financial Services Ltd. By an Order dated 7th July, 1994 the Applicants were permitted to make payment and on payment the shares were to be returned to them. 4. The Applicants then took out Miscellaneous Application No. 145 of 1995 for extension of time to make payment. By an order dated 23-3-1995 time for payment was extended till 31-12-1995. It was, however, clarified that if the Applicants failed to pay the amount within that time then the pledged shares were to be sold and net sale proceeds to be appropriated towards the dues of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company shall lie or be proceeded with further, except, with the consent of the Board, or, as the case may be, the Appellate Authority." 8. It is the submission of Mr. Mathew and Mr. Hegde that the Sick Companies Act prevails over every other law including the said Act. They submit that by virtue of section 22 on proceedings of any nature can lie against a Company in respect of whom an inquiry is pending under section 16. Mr. Mathew submits that the words 'or the like' in section 22 are very wide and would include all types of proceedings. 9. Both of them rely on the statement of objects and reasons of the Sick Companies Act wherein it is mentioned that the ill-effect of sickness in industrial companies results in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would have effect 'notwithstanding anything inconsistent therewith contained in any other law for the time being in force ' This Court resolved the conflict by considering the object and purpose of the two laws and giving precedence to the Banking Companies Act by observing: It is, therefore, desirable to determine the overriding effect of one or the other of the relevant provisions in these two Acts, in a given case, on much broader considerations of the purpose and policy underlying the two Acts and the clear intendment conveyed by the language of the relevant provisions therein.' (p. 615) As indicated by us, the special and specific purpose which motivated the enactment of section 14A and Chapter IIIA of the Delhi Rent Act would be wholly frustrated if the provisions of the Slum Clearance Act requiring permission of the competent authority were to prevail over them. Therefore, the newly introduced provisions of the Delhi Rent Act must hold the field and be given full effect despite anything to the contrary contained in the Slum Clearance Act. 21. For resolving such inter se conflict, one other test may also be applied though the persuasive force of such a test is but one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. In the present case the said Act is later. The said Act provides that its provisions are to prevail over any other Act. This would include the Sick Companies Act. If Legislature wanted to provide otherwise, they would have specifically so provided. 14. In this behalf it must be noted that the said Act was enacted in 1992. It was amended in 1994 to specifically give civil jurisdiction to this Court. The Sick Companies Act was already in existence. The Legislature was well aware that this Court was being given exclusive jurisdiction in respect of very large claims by Banks and financial institutions. The Legislature was well aware that when large claims are involved, the concerned counter-party may very well become a sick company if it was not already a sick company. The Legislature was aware of the existence of the Sick Companies Act. Yet while enacting the said Act the Legislature provided, in section 13, that the provisions of the said Act are to prevail over any other law for time being in force. Had the Legislature wanted to exclude the provisions of the Sick Companies Act from the ambit of the said Act, the Legislature would have specifically so provided. The fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner set down under section 11(2) of the said Act. This can only mean that the Legislature wanted the provisions of section 11(2) to prevail over the provisions of any other law including the Sick Companies Act. 16. Mr. Hegde submitted that on an interpretation such as this the provision of the Sick Companies Act would be nullified. He submitted that if the sick company is forced to pay the amounts due to Notified Parties then there may be no possibility of reconstruction/He submitted the public good sought to be achieved would be defeated. He submitted that it may then result in loss of production, loss of employment, loss of revenue and/or looking up of investible funds of Banks and Financial Institutions. He submitted that it is clear that the enactment seeking to achieve public good must prevail. 17. In my view, there is a clear conflict between the provisions of the two Acts. The intention of the Legislature being clear the provisions of the said Act would have to be given effect to. There is another reason for holding thus. It is a settled rule of interpretation that if one construction leads to a conflict, whereas on another construction the two Acts can be harmo-n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
