MAHARASHTRA TUBES LTD. versus STATE INDUSTRIAL AND INVESTMENT CORPORATION OF MAHARASHTRA LTD. AND ANR.

Citation: [1993] 1 S.C.R. 340 · Decided: 29-01-1993 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
MAHARASHTRA TUBES LTD. 
v. 
STATE INDUSTRIAL AND INVESTMENT CORPORATION OF 
MAHARASHTRA LTD. AND ANR. 
JANUARY 29, 1993 
[L.M. SHARMA, CJ. AND A.M. AHMADI, J.] 
State Finance Corporation Act, 1951~bject and scope of-Finance 
Corporation--Constitution-Purpose of 
Sick Industrial Companies (Special Provisions) Act, 1985-0bject and 
scope of 
State Finance Corporation Act, 1951-Section 46B and read with Sec-
D 
lions 22, of the Sick Industrial Companies (Special Provisions) Ac4 1985-
Both Special statutes-Distinction-Non-obstante clause of latter Act whether 
prevails over the non-obstante clause of former Act. 
E 
F 
G 
H 
Sick Industrial Companies (Special Provisions) Act, 1985-Section 2£-
0bject of-''Or the like'~ 'the like" "Proceedings"-Construction of 
State Finance Corporation Act, 1951-Sections 29, 31.read with sections 
22, 25 of the Sick Industrial Companies (Special Provisions) Ac4 1985-
Default in repayment of loan/advance-Question whether company a 'sick 
industry' pending in appeal u/s 25 of 1985 Act-Taking recourse u/s 29/31 of 
1951 Act for recovery of loan/advance-Legality of 
In July, 1982, the appellant-Company, incorporated under the Com-
panies Act, 1956 commenced manufacture of steel pipes/tubes etc. of 
various sizes and dimensions for export. 
By July, 1986, labour unrest, strikes, financial constraints, etc. neces-
sitated the cessation of manufacturing activities. 
On 28th August, 1988 the Company by its letter informed the Board 
for Industrial and Financial Reconstruction (BIFR) of its accumulated 
losses and sought financial assistance for revival of the unit. 
340 
, 
MAHARASIITRA TUBES v. STATE INVESTMENT CORPN. 
341 
The Director (Finance) of the BIFR desired the company to report. A 
the sickness in Form A and to take appropriate action under section 15(1) 
of the Sick Industrial Companies (Special Provisions) Act, 1985. The 
Company submitted the proposal in Form A. 
The BIFR held a preliminary hearing on 12th September, 1991, at 
which the company confirmed the information given in Form A. The Bench 
of the BIFR sought further information to enable it to form an opinion 
on the question whether or not the company was a sick industrial company 
under section 3(l)(o) of the 1985 Act. The Bench directed the company to 
submit the authenticated documents regarding the number of workers, 
audited/finalised accounts for the years 1989-90 and 1990-91 with detailed 
explanation in regard to the delay in making the reference and other 
discrepancies pointed out in the course of hearing. The Bench also directed 
the bank and other financial institutions to submit the reports regarding 
the conduct of the company and their role in providing necessary funds. 
On 20th July, 1992, considering the facts on record and submissions 
made, the BIFR dismissing the reference held that the company could not 
be held to be a sick industrial company under section 3(l)(o) of the 1985 
Act. 
B 
c 
D 
The respondent No. 1 thereafter initiated proceedings under section 
E 
29 of the State Financial Corporation Act, 1951 for taking possession or 
the factory premises of the company. 
On 20th August, 1992, the company liled an appeal under section 25 
of the 1985 Act against the order of the BIFR Bench and requested the 
respondent No. 1 not to proceed under section 29 of the 1951 Act, in view 
F 
of the provision in section 22(1) of 1985 Act. 
The respondent No. 1 sought the permission of the Appellate 
Authority under the 1985 Act, to take possession of the assets of the 
company. 
The action of the respondent No. 1 was challenged in a writ before 
the High Court. 
G 
The High Court dismissed the writ petition holding that the bar of 
section 22(1) of the 1985 Act did not apply to proceedings initiated under 
H 
342 
SUPREME COURT REPORTS 
(1993} 1 S.C.R. 
A 
section 29/31 of the 1951 Act. 
B 
c 
The view of the High Court was assailed in this appeal by special leave. 
The respondent No. 1 contended that the 1985 Act was a general 
statute covering a larger number of industrial conctrns than the 1951 Act 
and therefore the latter would prevail over the former in the event of 
confiict; that as the right conferred on the Financial Corporation by 
section 29 of the 1951 Act was not a legal proceeding but merely an action 
permitted by statute, section 22(1) of the 1985 Act would not apply because 
it only bars legal proceedings for the winding up of any industrial company 
or for execution, distress or the

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