There is no doubt that both are special laws. SICA
is a special law, which deals with the reconstruction
of sick companies and matters incidental thereto,
though it is general as regards other matters such
as recovery of debts. The RDDB Act is also a
special law, which deals with the recovery of money
due to banks or financial institutions, through a
special procedure, though it may be general as
regards other matters such as the reconstruction of
sick companies which it does not even specifically
deal with. Thus the purpose of the two laws is
different.
Parliament must be deemed to have had knowledge
of the earlier law i.e. SICA, enacted in 1985, while
enacting the RDDB Act, 1993. It is with a view to
prevent a clash of procedure, and the possibility of
contradictory orders in regard to the same entity
and its properties, and in particular, to preserve the
steps already taken for reconstruction of a sick
company in relation to the properties of such sick
company, which may be charged as security with
the banks or financial institutions, that Parliament
has specifically enacted sub-section (2). SICA had
been enacted in respect of specified and limited
companies i.e. those which owned industrial
undertakings specified in the Schedule to the IDR
Act, as mentioned earlier, whereas the RDDB Act
deals with all persons, who may have taken a loan
from a bank or a financial institution in cash or
otherwise, whether secured or unsecured, etc.
In view of the observations of this Court in the
decisions referred to and relied on by the learned
counsel for the parties we find that, the purpose of
the two enactments is entirely different. As observed
earlier, the purpose of one is to provide ameliorative
measures for reconstruction of sick companies, and
the purpose of the other is to provide for speedy
recovery of debts of banks and financial institutions.
Both the Acts are “special” in this sense. However,
with reference to the specific purpose of
reconstruction of sick companies, SICA must be
held to be a special law, though it may be
considered to be a general law in relation to the
recovery of debts. Whereas, the RDDB Act may be
considered to be a special law in relation to the
recovery of debts and SICA may be considered to
be a general law in this regard. For this purpose we
rely on the decision in LIC v. Vijay Bahadur [(1981)
1 SCC 315 : 1981 SCC (L&S) 111] . Normally the
latter of the two would prevail on the principle that
the legislature was aware that it had enacted the
earlier Act and yet chose to enact the subsequent
Act with a non obstante clause. In this case,
however, the express intendment of Parliament in
the non obstante clause of the RDDB Act does not
permit us to take that view. Though the RDDB Act is
the later enactment, sub-section (2) of Section 34
thereof specifically provides that the provisions of
the Act or the Rules made thereunder shall be in
addition to, and not in derogation of, the other laws
mentioned therein including SICA.” [at paras 36, 39,
40, and 48]
33. A conspectus of the aforesaid decisions shows that the
Sick Industrial Companies (Special Provisions) Act, 1985
prevails in all situations where there are earlier enactments with
non obstante clauses similar to the Sick Industrial Companies
(Special Provisions) Act, 1985. Where there are later
enactments with similar non obstante clauses, the Sick
Industrial Companies (Special Provisions) Act, 1985 has been
held to prevail only in a situation where the reach of the non
obstante clause in the later Act is limited – such as in the case
of the Arbitration and Conciliation Act, 1996 – or in the case of
the later Act expressly yielding to the Sick Industrial Companies
(Special Provisions) Act, 1985, as in the case of the Recovery
Of Debts Due To Banks And Financial Institutions Act, 1993.
Where such is not the case, as in the case of Special Courts
Act, 1992, it is the Special Courts Act, 1992 which was held to
prevail over the Sick Industrial Companies (Special Provisions)
Act, 1985.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS._614-615 OF 2016
(ARISING OUT OF SLP(CIVIL) NOS. 26170-26171 OF 2008)
M/S MADRAS PETROCHEM LTD.
& ANR. … APPELLANTS
VERSUS
BIFR & ORS. … RESPONDENTS
Citation;(2016)4 SCC1
R.F. Nariman, J.
Dated;January 29, 2016.
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