JAY ENGINEERING WORKS LTD. versus INDUSTRY FACILITATION COUNCIL AND ANR.

Citation: [2006] SUPP. 6 S.C.R. 189 · Decided: 14-09-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

JAY ENGINEERING WORKS LTD. 
A 
v. 
INDUSTRY FACILITATION COUNCIL AND ANR. 
SEPTEMBER 14, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
B 
Sick Industrial Companies (Special Provisions) Act, 1985-Section 20-
lnterest on Delayed Payments to Small Scale and Ancillary Industrial 
Undertakings Act, 1993-C/aim made under 1993 Act against appellant- C 
company-Objected on the ground that it is sick company-Bank account of 
appellant attached-Dismissal of Writ Petition by appellant on the premise 
that 1993 Act would prevail over 1985 Act-Correctness of-Held, not correct-
Both the Acts operate in different fields-Adopting the rule of harmonious 
construction, 1993 Act would not prevail over the 1985 Act. 
Interpretation of statute-Rule of harmonious construction-If a case is 
covered by two Acts and question is posed by non obstante clause in both the 
Acts then question as to which Act would prevail gets solved by harmonious 
construction of the statutes. 
D 
RespondentNo.2 sold its products to the appellant-company during E 
the period 28.12.1996 and 3.6.2000. As the appellant-company became sick, 
reference was made in terms of Section IS of Sick Industrial Companies 
(Special Provisions) Act, 1985 on 8.4.1994. It was declared as sick unit by 
the BIFR (Board). A rehabilitation scheme was framed by the Board but 
it was declared to have failed by an order on 12.7.2001. By reason of the 
said order, however, IDBI was appointed as an operating agency. A fresh F 
report was submitted by the said operating agency on 20.3.2003, which 
was accepted by the Board whereupon a fresh rehabilitation scheme was 
sanctioned on 8.4.2003. 
Respondent No.2 filed a claim petition before the Council-respondent G 
No. I asking interest on delayed payment under the Interest on Delayed 
Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. 
Appellant-company objected on the ground that it was a sick company. 
It was rejected and respondent No.I passed an award. Execution was filed 
in Civil Court. The Bank Account of appellant-company was attached by 
189 
H 
190 
SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R. 
A the Court. Aggrieved appellant-company filed writ petition which was 
dismissed on the premise that the 1993 Act would prevail over the 1985 
Act. LPA against it was also dismissed. 
In appeal to this Court, appellant contended that both the 1985 Act 
and 1993 Act operate in different fields hence the 1993 Act could not 
B prevail over the 1985 Act. 
Allowing the appeal, the Court 
HELD: I. The Board in terms of its order dated 8.4.2003 approved 
the rehabilitation scheme. In the said Scheme, the award made in favour 
C of the Respondents finds place in the category of 'Dormant Creditors'. 
The liabilities of the Appellant vis-a-vis the Respondent No. 2 was, 
therefore, indisputably a subject matter of the said Scheme. The High 
Court committed an error in proceeding on the premise that the awarded 
amount had not been included and could not be included in the sanctioned 
D rehabilitation scheme, the same being part of transactions which took place 
after 21.11.1997 ignoring the revised scheme made in the year 2003. 
(193-F-H; 194-A( 
2. I. The Interest on Delayed Payments to Small Scale and Ancillary 
Industrial Undertakings Act, 1993 was enacted to provide for and regulate 
E the payment of interest on delayed payments to small scale and ancillary 
industrial undertakings and for matters connected therewith. The 
provisions of the 1993 Act, therefore, do not envisage a situation where 
an industrial company becomes sick and requires framing of a scheme for 
its revival. (194-F-G( 
F 
2.2. An award in relation to a claim of a small-scale industry if made 
by the Council would be governed by the provisions of the Arbitration 
and Conciliation Act, 1996. The award of the Council being an award, 
deemed to have been made under the provisions of 1996 Act, indisputably 
is being executed before the Civil Court. Execution of an award would 
G attract the provisions of Section 22 of the 1985 Act. Whereas an 
adjudicatory process of making an award under the 1993 Act may not 
come within the purview of the 1985 Act but once an award made is sought 
to be executed, it shall come into play. Once the awarded amount has been 
included in the Scheme approved by the Board, Section 22 of the 1985 
Act would apply. (194-G; 195-F-H) 
H 
JAY ENGINEERING WORKS LTD.'" INDUSTRY FAGdTA TION COUNCIL 
191 
3. The Sick Industrial Companies (

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