TMI Blog2020 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... tsoever that important functions relating to repairs and re-construction of dilapidated buildings are given to MHADA. Equally, there is no doubt that in a given set of circumstances, the Board may, on such terms and conditions as may be agreed upon, and with the previous approval of the Authority, handover execution of any housing scheme under its own supervision. However, when it comes to any clash between the MHADA Act and the Insolvency Code, on the plain terms of Section 238 of the Insolvency Code, the Code must prevail. This is for the very good reason that when a moratorium is spoken of by Section 14 of the Code, the idea is that, to alleviate corporate sickness, a statutory status quo is pronounced under Section 14 the moment a petition is admitted under Section 7 of the Code, so that the insolvency resolution process may proceed unhindered by any of the obstacles that would otherwise be caused and that are dealt with by Section 14. The statutory freeze that has thus been made is, unlike its predecessor in the SICA, 1985 only a limited one, which is expressly limited by Section 31(3) of the Code, to the date of admission of an insolvency petition up to the date that the Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. On 10.04.2008, a Tripartite Joint Development Agreement (hereinafter referred to as the Joint Development Agreement ) was entered into between the Society representing persons occupying 672 tenements, MHADA and the Corporate Debtor. iv. On 25.03.2011, a Loan Agreement was entered into and executed between the Union Bank of India and the Corporate Debtor for a sum of ₹ 200 Crores. v. On 09.11.2011, a Deed of Modification was entered into between the three parties to the Joint Development Agreement, as after carrying out the survey of the land in question, it was found that certain parcels of land, which were identified with certain city survey numbers, were omitted, as a result of which they were also added, now making the project for a total of 47 acres of land. vi. As a result of the Corporate Debtor defaulting in repayment of the loan to its financial creditor, namely, the Union Bank of India, an Insolvency Application under Section 7 of the Code, which was filed on 15.05.2017, was admitted on 24.07.2017, appointing an Interim Resolution Professional (i.e. the Appellant before us). A moratorium in terms of Section 14 was also declared by this order. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, as a result of which the entire discussion of Section 14(1)(d) would now become academic. However, it also decided: 14. On perusal of record, we find that pursuant to the Joint Development Agreement the land of the Maharashtra Housing and Area Development Authority was handed over to the Corporate Debtor and except for development work the Corporate Debtor has not accrued any right over the land in question. The land belongs to the Maharashtra Housing and Area Development Authority which has not formally transferred it in favour of the Corporate Debtor . Hence, it cannot be treated to be the asset of the Corporate Debtor for application of provisions of Section 14(1)(d) of the I B Code . 2. Mr. Dhruv Mehta, learned Senior Advocate appearing for the Appellant, has taken us through the Joint Development Agreement together with the Deed of Modification in great detail. His first submission is that it would be wholly incorrect to state that a mere license to enter had been granted. According to him, if these two documents were read as a whole, it is clear that legal possession was actually handed over to him in order to do three things: (1) construct te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the previous approval of the Authority, and such schemes have to be executed under the supervision of the Authority. This being the case, according to him, there is no question of any possession or occupation being handed over and, as a result, Section 14(1)(d) of the Code would not apply. He also strongly relied upon a recent judgment by my brother S. Ravindra Bhat, J. in Municipal Corporation of Greater Mumbai (MCGM) vs. Abhilash Lal Ors. (Civil Appeal No. 6350 of 2019), to buttress his proposition that Section 238 of the Code, which contains a non- obstante clause getting out of harm s way other statutes, cannot be extended beyond the provisions of the Code. He exhorted us to give full play to the MHADA Act, and if that were done it is obvious that any clash between the MHADA Act and the Insolvency Code would then have to be resolved, at least on the facts of this case, in favour of MHADA. He also referred to a Bombay High Court order dated 05.04.2018, in which it was stated that MHADA had taken symbolic possession on 05.04.2018. 4. Mr. Basava Prabhu Patil, learned Senior Advocate appearing on behalf of some of the homebuyers, also referred to and relied upon the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with any financial regulator; (b) a surety in a contract of guarantee to a corporate debtor. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. (emphasis supplied) Section 18, on which great reliance is placed, is also set out hereunder: 18. Duties of interim resolution professional. (1) The interim resolution professional shall perform the following duties, namely:- (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan: Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database. (4) The resolution applicant shall, pursuant to the resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Development Agreement as follows: 1.1.9 License Agreement shall mean and include an agreement by which a license will be granted in favour of the developer to enter upon the said land, to demolish the existing structures, to construct and erect new structures, to allot tenements in such constructed structures to the tenants and to do all other acts as are necessary for implementation of the project. 1.1.10 Project shall mean the building/s to be constructed by the developer and handed over to the society for housing the tenants and to MHADA in terms of this agreement but shall not mean and include the free sale buildings that the developer is entitled to develop and construct in terms of this agreement and in terms of the plan. 2.1.2 For the performance of the project, it is expressly agreed between the parties that: xxx xxx xxx (xxvi) It is agreed that the license will be granted to the Developer as per the requirement of the project. After completion of the development, the beneficiaries housing societies will have to enter into lease deed with MHADA. (xxvii) The Developer shall abide the terms of indemnity bond regarding the responsibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the recovery of any property . The property in this case consists of land, ad-measuring 47 acres, together with structures thereon that had to be demolished. Recovery would necessarily go with what was parted by the corporate debtor, and for this one has to go to the next expression contained in the said sub-section. 8. One thing is clear that owner or lessor qua property is then to be read with the expression occupied or in the possession of . One manner of reading this clause is to state that whether recovery is sought by an owner or lessor, the property should either be occupied by or be in the possession of the corporate debtor. The difficulty with this interpretation is that a lessor would not normally seek recovery of property occupied by a tenant having leased the property, a transfer of property has taken place in favour of a tenant, possession of which would then have to be recovered. This is where the latin maxim reddendo singula singulis comes in. In an earlier judgment of this Court reported in The Member, Board of Revenue vs. Arthur Paul Benthall [1955] 2 SCR 842, this Court dealt with two different expressions used in Sections 5 and 6 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a Full Bench of that High Court in Ulahannan Mathai v. State, AIR 1955 Tra- Co 82. The High Court interpreted the expression No Bill or amendment shall be introduced or moved in the proviso as requiring that the Bill should neither be introduced nor moved without the prior sanction of the President, and, since in the case of Act 5 of 1950, the Bill was moved for consideration, without the prior sanction of the President, on 23rd March, 1950, after the Constitution had come into force, there had been non-compliance with the proviso. The court rejected the contention put forward before it that what the proviso really stipulates is that no Bill shall be introduced or amendment moved in the Legislature of a State without the previous sanction of the President. That argument was advanced on the basis of the maxim reddendo singula singulis which, according to Black's Interpretation of Laws, means: Where a sentence in a statute contains several antecedents and several consequences, they are to be read distributively, that is to say, each phrase or expression is to be referred to its appropriate object. 14. The court based its decision on the view that, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on rather than the rule. The general rule is that when two different words are used by the same statute, prima facie one has to construe these different words as carrying different meanings. In Kanhaiyalal Vishindas Gidwani (1993) 2 SCC 144, this Court found that the words subscribed and signed had been used in the Representation of the People Act, 1951 interchangeably and, therefore, in that context the Court came to the conclusion that when the legislature used the word subscribed it did not intend anything more than signing . The words suit and proceeding have not been used interchangeably in SICA. Therefore, the reasons which persuaded this Court to give the same meaning to two different words in a statute cannot be applied here. xxx xxx xxx 26. Apart from the semantic difference between the words suit and proceeding there is the absence of expansive words or the like which appear after the expression proceedings , after the word suit . The exclusion of such omnibus expression after the word suit must be given some weight in interpreting the word. As held by this Court in LIC v. Escorts Ltd. (2001) 1 SCC 78: (SCC p. 313, para 63) The di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 up to the specified date, from a fund known as Conservation and Safety Fund, by such raising contractor prior to the appointed day, can be realised by the Central Government by virtue of their powers under sub-section (3) of Section 22 of the Nationalisation Act, to the exclusion of all other persons including such contractor and applied under sub-section (4) of Section 22 towards the discharge of the liabilities of the coking coal mine, which could not be discharged by the appointed day. In answering the aforesaid question, this Court distinguished Chief Inspector of Mines vs. Lala Karam Chand Thapar (1962) 1 SCR 9 in the context of raising contracts of coal in paragraphs 18 and 19 of the judgment; and such raising agreements by registered instruments being held not to amount to a lease, were held to be licenses coupled with a grant. This being the case, a raising contractor being in possession on behalf of an owner of property, or a lessee of a mine was held to be an occupier within the meaning of Section 2(1) of the Mines Act, 1952. In so holding, this Court went into various dictionary meanings of the word occupier and occupation and held as follows: 19. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal possession of the building by the tenant will, by itself, be not sufficient for refusing an order of eviction unless the tenant proves that there was a reasonable cause for his having ceased to occupy the building. xxx xxx xxx 25. The Court highlighted the distinction between the terms possession and occupy in the context of rent control legislation in the following words: (Ram Dass case (2004) 3 SCC 684, SCC pp. 687- 88, para 7) 7. The terms possession and occupy are in common parlance used interchangeably. However, in law, possession over a property may amount to holding it as an owner but to occupy is to keep possession of by being present in it. The rent control legislations are the outcome of paucity of accommodations. Most of the rent control legislations, in force in different States, expect the tenant to occupy the tenancy premises. If he himself ceases to occupy and parts with possession in favour of someone else, it provides a ground for eviction. Similarly, some legislations provide it as a ground of eviction if the tenant has just ceased to occupy the tenancy premises though he may have continued to retain possession thereof. The scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and observed: 4. The word occupy occurring in Section 11(4)(v) has got different meaning in different context. The meaning of the word occupy in the context of Section 11(4)(v) has to be understood in the light of the object and purpose of the Rent Control Act in mind. The rent control legislation is intended to give protection to the tenant, so that there will not be interference with the user of the tenanted premises during the currency of the tenancy. The landlord cannot disturb the possession and enjoyment of the tenanted premises. Legislature has guardedly used the expression occupy in Section 11(4)(v) instead of possession . Occupy in certain context indicates mere physical presence, but in other context actual enjoyment. Occupation includes possession as its primary element, and also includes enjoyment . The word occupy sometimes indicates legal possession in the technical sense; at other times mere physical presence. We have to examine the question whether mere physical possession would satisfy the word occupy within the meaning of Section 11(4)(v) of the Act. In our view mere physical possession of premises would not satisfy the meaning of occupat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him and it has even been suggested that the property which is let by the owner to a tenant, though not in the former's actual occupation, is in his constructive occupation just as it may be said that he is possessing it though indirectly through his tenant. Reference was made to the connotation of the term occupied as given at pages 83 and 84 of Volume 67 of Corpus Juris Secundum. The term has many meanings; in legal acceptation the term implies use and possession, and it has been said that it implies actual possession and not constructive possession, but it also has been held that occupied does not always require an actual occupancy, but it may sometimes permit a constructive occupancy. It is defined as meaning held in possession. Occupied is an appropriate word to use for the purpose of identifying land in actual possession, and when applied to a building, implies a substantial and practical use of the building for the purpose for which it is designed . 21. I do not consider that the above quotation with its many meanings, some of them self-contradictory, is of any real help, and it is clear that the meaning of the word varies according to the context of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute but what has been observed in most of these cases is that the term occupation is of a wider import than the term possession and means something more than legal possession, which may be either actual or constructive. More helpful are some cases which arose in the Punjab under section 60(1)(c) or (ccc) of the Code. 15. The conspectus of the aforesaid judgments would show that the expression occupied by would mean or be synonymous with being in actual physical possession of or being actually used by, in contra-distinction to the expression possession , which would connote possession being either constructive or actual and which, in turn, would include legally being in possession, though factually not being in physical possession. Since it is clear that the Joint Development Agreement read with the Deed of Modification has granted a license to the developer (Corporate Debtor) to enter upon the property, with a view to do all the things that are mentioned in it, there can be no gain saying that after such entry, the property would be occupied by the developer. Indeed, this becomes clear from the termination notice dated 12.01.2018, issued by MHADA to the developer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon for the purpose of housing as many occupiers of those properties as possible, and for providing alternative accommodation to other affected occupiers; 79. Power of Board to undertake building repairs, building reconstruction and occupiers housing and rehabilitation schemes. (1) The Authority may, on such terms and conditions as it may think fit to impose, entrust to the Board the framing and execution of schemes for building repairs or for reconstruction of buildings or for housing and rehabilitation of, dishoused occupiers, whether provided by this Act or not, and the Board shall thereupon undertake the framing and execution of such schemes as if it had been provided for by this Act. (2) The Board may, on such terms and conditions as may be agreed upon and with the previous approval of the Authority- (a) hand over the execution under its own supervision of any building repairs scheme, building reconstruction scheme, or dishoused occupier s housing scheme to a Municipal Corporation or to a co-operative society or to any other agency recognized for the purpose by the Board, as it may deem necessary, and (b) transfer by sale, exchange or otherwise i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period was for 60 months starting from the date excluding the monsoon period; (b) by Clauses 5 and 17, SevenHills could mortgage the property for securing advances from financial institutions for the construction of the project and thereafter towards its working. Such mortgage/charge or interest was subject to approval by MCGM. In the event the contract was to be terminated, it was agreed that MCGM would not in any manner be liable towards the mortgaged amount and all its rights and ownership would continue to vest in it free from encumbrances (Clause 17). 33. The show cause notice in this case preceded admission of the insolvency resolution process. In view of the clear conditions stipulated in the contract, MCGM reserved all its rights and its properties could not have therefore, in any manner, been affected by the resolution plan. Equally in the opinion of this Court, the adjudicating authority could not have approved the plan which implicates the assets of MCGM especially when SevenHills had not fulfilled its obligations under the contract. 18. The matter had come to this Court after the Adjudicating Authority had approved of a certain resolution plan, unlike in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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