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

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

SICA, particularly Section 22, prevails over the RDDB Act in regard to recovery proceedings against a sick company, based on Section 34(2) RDDB Act, which preserves the protection of SICA and prevents derogation of its purpose despite both Acts containing non-obstante clauses.

Parties
Appellant: KSL & Industries Ltd.; Respondent: M/s. Arihant Threads Ltd.; Respondent: Stressed Assets Stabilization Fund, Mumbai
Jurisdiction
India
Judgment Date
27 October 2014
Procedural Posture
Civil Appeal / Appeal From High Court Judgment, Referred to Larger Bench
Outcome
Appeal allowed
Legal Topics
Conflict of Statutes, Recovery of Debts, Sick Industrial Companies, Interpretation of Non Obstante Clauses
Corporate Law Banking Law Conflict of Statutes Recovery of Debts Sick Industrial Companies Interpretation of Non Obstante Clauses

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Parties

KSL & Industries Ltd.

Appellant

M/s. Arihant Threads Ltd.

Respondent

Stressed Assets Stabilization Fund, Mumbai

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment, Referred to Larger Bench

Legal Issues

  1. 1 Which statute prevails between Sick Industrial Companies (Special Provisions) Act, 1985 and Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in light of their non-obstante clauses
  2. 2 Applicability and scope of Section 22 SICA and Section 34 RDDB Act in debt recovery proceedings against a sick company

Ratio Decidendi

SICA, particularly Section 22, prevails over the RDDB Act in regard to recovery proceedings against a sick company, based on Section 34(2) RDDB Act, which preserves the protection of SICA and prevents derogation of its purpose despite both Acts containing non-obstante clauses.

Court Disposition

Appeal allowed

Orders

  • Judgment and Order dated 23.02.06 of the Delhi High Court is set aside
  • Writ petitions are dismissed