KSL & INDUSTRIES LTD. versus M/SARIHANTTHREADS LTD. & ORS.

Citation: [2014] 14 S.C.R. 1097 · Decided: 27-10-2014 · Supreme Court of India · Bench: H.L. DATTU · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2014] 14 S.C.R. 1097 
KSL& INDUSTRIES LTD. 
v. 
M/SARIHANTTHREADS LTD. & ORS. 
(Civil Appeal No. 5225 of 2008) 
OCTOBER 27, 2014 
[H. L. DATTU, CJI, S. A. BOBDE AND 
ABHAY MANOHAR SAPRE, JJ.] 
A 
B 
Sick Industrial Companies (Special Provisions) Act, 
1985- s. 22- Recovery of Debts Due to Banks and Financial C 
Institutions Act, 1993 - s.34 - Interpretation of two Acts -
Which of the two Acts to prevail, in view of non-obstante clause 
in both the legislation -Held: Provisions of SICA, in particular 
s. 22, would prevail over the provision for the recovery of debts 
· in the RDDB Act- Purpose of the two Acts is entirely different D 
and where actions under the two laws may seem to be in 
conflict, Parliament has wisely preserved the proceedings 
under the SICA, by specifically providing for sub-section (2), 
which lays down that the later Act RDDB shall be in addition 
to and not in derogation of the SICA. 
· 
E 
Allowing the appeal, the Court 
HELD: 1.1 The purpose of the two enactments-
Recovery of Debts Due to Banks and Financial 
Institutions Act, 1993 and the Sick Industrial Companies 
(Special Provisions) Act, 1985 is entirely different. The 
F 
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 G 
specific purpose of reconstruction of sick companies, 
the 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 H 
1097 
1098 
SUPREME COURT REPORTS 
[2014] 14 S.C.R. 
A of debts and the SICA may be considered to be a general 
law in this regard. 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 the 
B instant case, however, the express .intendment of 
Parliament in the non-obstante clause of the RDDB Act 
does not permitto take that view. Though the RDDB Act 
is the later enactment, sub-section (2) of Section 34 
specifically provides that the provisions of the Act or the 
C rules thereunder shall be in addition to, and not in 
derogation of, the other laws mentioned therein 
including SICA. (Para 49)(1120-C-H] 
1.2 The term "not in derogation" clearly expresses 
the intention of Parliament notto detractfrom or abrogate 
D the provisions of SICA in any way. This, in effect must 
mean that Parliament intended the proceedings under 
SICA for reconstruction of a sick company to go on and 
for that purpose further intended that all other 
proceedings against the company and its properties 
E should be stayed pending the process of reconstruction. 
· While the term "proceedings" under Section 22 did not 
originally include the RDDB Act, which was not there in 
existence. Section 22 covers proceedings under the 
RDDB Act. [Para ~0)(1121-A-C] 
F 
1.3 The purpose of the two Acts is entirely different 
and where actions under the two laws may seem to be 
in conflict, Parliament has wisely preserved the 
proceedings under the SICA, by specifically providing 
for sub-section (2), which lays down that the later Ac'i: 
G RDDB shall be in addition to and not in derogation of 
the SICA. That this conclusion has been guided by what 
is considered to be one of the most crucial principles of 
interpretation viz. giving effect to the intention of the 
. Legislature. The difficulty arose. mainly due to the 
H absence of specific words denoting the intention of 
KSL&INDUSTRIES LTD. v. M/SARIHANTTHREADS LTD. 1099 
Parliament to cover applications for recovery of debts A 
under the RDDB Act while enacting Section 22 of the 
SICA. The obvious reason for this absence is the fact 
that the SICA was enacted earlier. It is the duty of this 
Court to consider SICA, after the enactment of the RDDB 
Act to ascertain the true intent and purpose of providing B 
that no proceedings for execution or distraints or suits 
shall lie or be proceeded with. Undoubtedly, in the 
narrower sense an application for recovery of debt can 
be giving a restricted meaning i.e. a proceeding which 
commences on filing and terminates at the judgment. C 
However, there is no need to give su.ch a restricted 
meaning, since the true purp
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