# MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY THROUGH ITS CHAIRMAN & ANR

- **Citation:** [2020] 4 S.C.R. 305
- **Court:** Supreme Court of India
- **Decided:** 2020-02-19
- **Case number:** Civil Appeal No. 12248 of 2018
- **Bench:** R. F. Nariman, S. Ravindra Bhat, V. Ramasubramanian
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mr-rajendra-k-bhutta-v-maharashtra-housing-and-area-development-authority-34433
- **Pages:** 31

## Headnote

Insolvency and Bankruptcy Code, 2016 - s.14(1)(d) -
Interpretation of a Tripartite Joint Development Agreement was
entered into between the society representing persons occupying
tenements, Maharashtra Housing and Area Development Authority
(MHADA) and the Corporate Debtor in a project for the
development of 47 acres of land - The Corporate Debtor entered
into a Loan Agreement with a bank for a sum of Rs. 200 crores -
The Corporate Debtor defaulted in repayment of loan - Consequent
to which, an application u/s.7 of the Code was admitted, appointing
interim resolution professional and a moratorium u/s. 14 was also
declared - After the imposition of the moratorium period u/s. 14,
the MHADA issued a termination notice of the Joint Development
Agreement to the Corporate Debtor - It was further stated that the
Corporate Debtor would have to hand over possession to MHADA,
which would then enter upon the plot and take possession of the
land including all structures thereon - The Appellant-Interim
Resolution Professional filed an application before the NCLT to
restrain MHADA from taking over possession of the land till
completion of the CIRP - The NCLT dismissed the said applciation
and stated that s.14(1)(d) does not cover licences to enter upon
land in pursuance of the Joint Development Agreements - The
NCLAT held that the land belonged to the MHADA and which was
not formally transferred in favour of the Corporate Debtor and
hence, it cannot be treated to be the asset of the 'Corporate Debtor'
for application of the provisions of s.14(1)(d) of the Code - Before
the Supreme Court, the appellant contended that it is wholly incorrect
to state that a mere 'licence to enter' was granted, the reading of
[2020] 4 S.C.R. 305
305
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the relevant documents as a whole clearly show that the legal
possession was actually handed over to the Corporate Debtor - It
was further contended that any recovery of a property by an owner
where such property is 'occupied by' the Corporate Debtor would
clearly fall with s.14(1)(d) - Held: A bare reading of s.14(1)(d) of
the Code would make it clear that it does not deal with any of the
assets or legal right or beneficial interest in such assets of the
Corporate Debtor - Where recovery of property is to be made by
an owner u/s.14(1) (d), such recovery would be of property that is
'occupied by' a Corporate Debtor - The expression 'occupied by'
would mean or be synonymous with being in actual physical
possession or being actually used by - In the instant case, it is
clear that the Joint Development Agreement read with the Deed of
modification has granted a license to the developer (Corporate
Debtor) to enter upon the property, with a view to do all things that
are mentioned in it, there can be no gainsaying that after such entry,
the property would not be 'occupied by' the developer - Therefore,
the impugned judgment of NCLAT is set aside and the NCLT is
directed to dispose of the resolution professional's application.
Maxims - reddendo singula singulis - discussed.
Words and Phrases - 'occupied by' and 'possession' -
discussed.
Allowing the appeal, the Court
HELD: 1. The provisions of the Joint Development
Agreement would show that, at the very least, a license is granted
in favour of the developer to enter upon the land to demolish
existing structures, construct and erect new structures, and allot
to erstwhile tenants, tenements in such constructed structures
in three categories - (1) the earlier tenants/licensees of structures
that were demolished; (2) tenements to be allotted free of cost
to Maharashtra Housing and Area Development Authority
(MHADA); and (3) what is referred to as "free sale component"
which the developers then sell and exploit to recover or recoup
cost and make profit. It is wholly unnecessary for this Court to
refer to any other clauses of the Joint Development Agreement.
It is also not necessary for the purpose of this case to state

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305
MR. RAJENDRA K. BHUTTA
v.
MAHARASHTRA HOUSING AND AREA
DEVELOPMENT AUTHORITY THROUGH ITS
CHAIRMAN & ANR.
(Civil Appeal No. 12248 of 2018)
FEBRUARY 19, 2020
[R. F. NARIMAN, S. RAVINDRA BHAT AND
V. RAMASUBRAMANIAN, JJ.]
Insolvency and Bankruptcy Code, 2016 - s.14(1)(d) -
Interpretation of a Tripartite Joint Development Agreement was
entered into between the society representing persons occupying
tenements, Maharashtra Housing and Area Development Authority
(MHADA) and the Corporate Debtor in a project for the
development of 47 acres of land - The Corporate Debtor entered
into a Loan Agreement with a bank for a sum of Rs. 200 crores -
The Corporate Debtor defaulted in repayment of loan - Consequent
to which, an application u/s.7 of the Code was admitted, appointing
interim resolution professional and a moratorium u/s. 14 was also
declared - After the imposition of the moratorium period u/s. 14,
the MHADA issued a termination notice of the Joint Development
Agreement to the Corporate Debtor - It was further stated that the
Corporate Debtor would have to hand over possession to MHADA,
which would then enter upon the plot and take possession of the
land including all structures thereon - The Appellant-Interim
Resolution Professional filed an application before the NCLT to
restrain MHADA from taking over possession of the land till
completion of the CIRP - The NCLT dismissed the said applciation
and stated that s.14(1)(d) does not cover licences to enter upon
land in pursuance of the Joint Development Agreements - The
NCLAT held that the land belonged to the MHADA and which was
not formally transferred in favour of the Corporate Debtor and
hence, it cannot be treated to be the asset of the 'Corporate Debtor'
for application of the provisions of s.14(1)(d) of the Code - Before
the Supreme Court, the appellant contended that it is wholly incorrect
to state that a mere 'licence to enter' was granted, the reading of
[2020] 4 S.C.R. 305
305
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the relevant documents as a whole clearly show that the legal
possession was actually handed over to the Corporate Debtor - It
was further contended that any recovery of a property by an owner
where such property is 'occupied by' the Corporate Debtor would
clearly fall with s.14(1)(d) - Held: A bare reading of s.14(1)(d) of
the Code would make it clear that it does not deal with any of the
assets or legal right or beneficial interest in such assets of the
Corporate Debtor - Where recovery of property is to be made by
an owner u/s.14(1) (d), such recovery would be of property that is
'occupied by' a Corporate Debtor - The expression 'occupied by'
would mean or be synonymous with being in actual physical
possession or being actually used by - In the instant case, it is
clear that the Joint Development Agreement read with the Deed of
modification has granted a license to the developer (Corporate
Debtor) to enter upon the property, with a view to do all things that
are mentioned in it, there can be no gainsaying that after such entry,
the property would not be 'occupied by' the developer - Therefore,
the impugned judgment of NCLAT is set aside and the NCLT is
directed to dispose of the resolution professional's application.
Maxims - reddendo singula singulis - discussed.
Words and Phrases - 'occupied by' and 'possession' -
discussed.
Allowing the appeal, the Court
HELD: 1. The provisions of the Joint Development
Agreement would show that, at the very least, a license is granted
in favour of the developer to enter upon the land to demolish
existing structures, construct and erect new structures, and allot
to erstwhile tenants, tenements in such constructed structures
in three categories - (1) the earlier tenants/licensees of structures
that were demolished; (2) tenements to be allotted free of cost
to Maharashtra Housing and Area Development Authority
(MHADA); and (3) what is referred to as "free sale component"
which the developers then sell and exploit to recover or recoup
cost and make profit. It is wholly unnecessary for this Court to
refer to any other clauses of the Joint Development Agreement.
It is also not necessary for the purpose of this case to state as to
whether an interest in property is or is not created by the said
Joint Development Agreement. [Paras 6][320-A-C]
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MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREA
DEVELOPMENT AUTHORITY THR. ITS CHAIRMAN
2. A bare reading of Section 14(1)(d) of the Insolvency and
Bankruptcy Code, 2016 would make it clear that it does not deal
with any of the assets or legal right or beneficial interest in such
assets of the corporate debtor. For this reason, any reference to
Sections 18 and 36, as was made by the NCLT, becomes wholly
unnecessary in deciding the scope of Section 14(1)(d), which
stands on a separate footing. Under Section 14(1)(d) what is
referred to is the "recovery of any property". The 'property' in
this case consists of land, ad-measuring 47 acres, together with
structures thereon that had to be demolished. 'Recovery' would
necessarily go with what was parted by the corporate debtor, and
for this, one has to go to the next expression contained in the
said sub-section. [Para 7][320-D-E]
3. The conspectus of the Supreme Court judgments would
show that the expression "occupied by" would mean or be
synonymous with being in actual physical possession of or being
actually used by, in contra-distinction to the expression
"possession", which would connote possession being either
constructive or actual and which, in turn, would include legally
being in possession, though factually not being in physical
possession. Since it is clear that the Joint Development
Agreement read with the Deed of Modification has granted a
license to the developer (Corporate Debtor) to enter upon the
property, with a view to do all the things that are mentioned in it,
there can be no gain saying that after such entry, the property
would not be "occupied by" the developer. [Para 15][331-E-F]
4. There is no doubt whatsoever that important functions
relating to repairs and re-construction of dilapidated buildings
are given to MHADA. Equally, there is no doubt that in a given
set of circumstances, the Board may, on such terms and conditions
as may be agreed upon, and with the previous approval of the
Authority, handover execution of any housing scheme under its
own supervision. However, when it comes to any clash between
the Maharashtra Housing and Area Development Act, 1976 and
the Insolvency Code, on the plain terms of Section 238 of the
Insolvency Code, the Code must prevail. This is for the very
good reason that when a moratorium is spoken of by Section 14
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of the Code, the idea is that, to alleviate corporate sickness, a
statutory status quo is pronounced under Section 14 the moment
a petition is admitted under Section 7 of the Code, so that the
insolvency resolution process may proceed unhindered by any of
the obstacles that would otherwise be caused and that are dealt
with by Section 14. The statutory freeze that has thus been made
is, unlike its predecessor in the SICA, 1985 only a limited one,
which is expressly limited by Section 31(3) of the Code, to the
date of admission of an insolvency petition up to the date that the
Adjudicating Authority either allows a resolution plan to come
into effect or states that the corporate debtor must go into
liquidation. For this temporary period, at least, all the things
referred to under Section 14 must be strictly observed so that
the corporate debtor may finally be put back on its feet albeit
with a new management. [Para 16][333-F-H; 334-A-B]
The Member, Board of Revenue v. Arthur Paul Benthall
[1955] 2 SCR 842; Koteswar Vittal Kamath v. K.
Rangappa Baliga & Co. (1969) 1 SCC 255 : [1969] 3
SCR 40; Kailash Nath Agarwal and Ors. v. Pradeshiya
Industrial & Investment Corporation of U.P. Ltd and
Anr. (2003) 4 SCC 305 : [2003] 1 SCR 1159; Industrial
Supplies Pvt. Ltd. and Anr. v. Union of India and Ors.
(1980) 4 SCC 341 : [1981] 1 SCR 375; Chief Inspector
of Mines v. Lala Karam Chand Thapar [1962] 1 SCR
9; Dunlop India Limited v. A.A. Rahna and Anr. (2011)
5 SCC 778 : [2011] 5 SCR 1080 - relied on.
Municipal Corporation of Greater Mumbai (MCGM)
v. Abhilash Lal & Ors. (2020) 13 SCC 234; Sushil
Kumar Agarwal v. Meenakshi Sadhu and Ors. (2019)
2 SCC 241 : [2018] 12 SCR 756 - distinguished.
Ude Bhan and Others v. Kapoor Chand and Others
AIR (1967) P&H 53 (FB) - referred to.
Case Law Reference
[2018] 12 SCR 756
distinguished
Paras 4, 19
[1955] 2 SCR 842
relied on
Para 8
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MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREA
DEVELOPMENT AUTHORITY THR. ITS CHAIRMAN
[1969] 3 SCR 40
relied on
Para 9
[2003] 1 SCR 1159
relied on
Para 10
[1981] 1 SCR 375
relied on
Para 12
[1962] 1 SCR 9
relied on
Para 12
[2011] 5 SCR 1080
relied on
Para 13
(2020) 13 SCC 234
distinguished
Paras 3, 17
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12248
of 2018.
From the Judgment and Order dated 14.12.2018 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No. 119 of 2018.
Dhruv Mehta, Sr. Adv., Ashish Verma, Ms. Avika Madhur, Daksh
Wadhawan, Prashant Chaudhary, Advs. for the Appellant.
Dushyant Dave, Basava Prabhu S. Patil, Sr. Advs., Chirag M.
Shroff, Ms. Yashika Verma, Ms. Abhilasha Bharti, Pawanshree Agrawal,
Ms. Abhipsa Anamik, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. This appeal raises a question as to the correct interpretation of
Section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016
(hereinafter referred to as "the Code"). The facts necessary to appreciate
the setting in which this question arises are as follows:
i.
On 01.11.2007, a Resolution bearing No. 6280 was passed by
the Maharashtra Housing and Area Development Authority
(hereinafter referred to as 'the MHADA') to execute a joint
development agreement with the Corporate Debtor, i.e. Guru
Ashish Construction Private Limited, and Goregaon Siddharth
Nagar Sahakar Griha Nirman Sanstha Limited (a Society for
persons who are displaced and who are to be re-housed in the
project for joint development of land, ad-measuring about 40
acres), which envisaged re-development insofar as 672
tenements in Siddharth Nagar, Goregaon, Mumbai were
concerned.
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ii. On 03.03.2008, the Maharashtra State Government granted
its approval to the aforesaid Resolution.
iii. On 10.04.2008, a Tripartite Joint Development Agreement
(hereinafter referred to as the "Joint Development
Agreement") was entered into between the Society
representing persons occupying 672 tenements, MHADA and
the Corporate Debtor.
iv. On 25.03.2011, a Loan Agreement was entered into and
executed between the Union Bank of India and the Corporate
Debtor for a sum of Rs. 200 Crores.
v. On 09.11.2011, a Deed of Modification was entered into
between the three parties to the Joint Development Agreement,
as after carrying out the survey of the land in question, it was
found that certain parcels of land, which were identified with
certain city survey numbers, were omitted, as a result of which
they were also added, now making the project for a total of 47
acres of land.
vi. As a result of the Corporate Debtor defaulting in repayment
of the loan to its financial creditor, namely, the Union Bank of
India, an Insolvency Application under Section 7 of the Code,
which was filed on 15.05.2017, was admitted on 24.07.2017,
appointing an Interim Resolution Professional (i.e. the Appellant
before us). A moratorium in terms of Section 14 was also
declared by this order.
vii. On 12.01.2018 - after the imposition of the moratorium period
under Section 14 of the Code - MHADA issued a termination
notice to the Corporate Debtor stating that upon expiry of 30
days from the date of receipt of the notice, the Joint
Development Agreement as modified would stand terminated.
It was further stated that the Corporate Debtor would have to
handover possession to MHADA, which would then enter upon
the plot and take possession of the land including all structures
thereon.
viii.One hundred and eighty days from the start of the Corporate
Insolvency Resolution Process (hereinafter referred to as "the
CIRP") expired on 19.01.2018. The NCLT, by order dated
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MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREA
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24.01.2018, extended the CIRP period by ninety days, as is
permissible under the Code.
ix. On 01.02.2018, the Appellant filed M.A. No. 96 of 2018, seeking
a direction from the NCLT to restrain MHADA from taking
over possession of the land till completion of the CIRP,
contending that such a recovery of possession was in
derogation of the moratorium imposed under Section 14 of the
Code. The NCLT, by order dated 02.04.2018, dismissed the
aforesaid application, stating that Section 14(1)(d) of the Code
does not cover licenses to enter upon land in pursuance of
Joint Development Agreements, stating that such licenses
would only be 'personal' and not interests created in property.
An appeal against this order was preferred to the NCLAT.
x. Meanwhile, in a parallel proceeding, on 18.04.2018, the amount
of time taken by the NCLT in deciding the application under
Section 7 under the Code, being 55 days, was sought to be
omitted from the total number of days allowable under the
Code. This application was partially granted, excluding 38 out
of 55 days. An appeal to the NCLAT proved successful,
whereby the NCLAT, by order dated 09.05.2018, allowed the
appeal and allowed the entire 55 days so taken before the
NCLT to be excluded.
xi. On 03.07.2018, the Appellant filed an approved Resolution Plan
before the NCLT, Mumbai by way of I.A. No. 21433 of 2018.
We are informed that this was within the extended period of
55 days so granted by the NCLAT. It may only be mentioned
that the Resolution Plan was approved by 86.16% of the
Committee of Creditors. Ultimately, the NCLAT, by the
impugned order dated 14.12.2018, (after omitting to refer to
the order dated 09.05.2018), stated that 270 days are over, as
a result of which the entire discussion of Section 14(1)(d) would
now become academic. However, it also decided:
"14. On perusal of record, we find that pursuant to the
'Joint Development Agreement' the land of the 'Maharashtra
Housing and Area Development Authority' was handed over
to the 'Corporate Debtor' and 'except for development
work' the 'Corporate Debtor' has not accrued any right
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over the land in question. The land belongs to the
'Maharashtra Housing and Area Development Authority'
which has not formally transferred it in favour of the
'Corporate Debtor'. Hence, it cannot be treated to be the
asset of the 'Corporate Debtor' for application of provisions
of Section 14(1)(d) of the 'I&B Code'."
2. Mr. Dhruv Mehta, learned Senior Advocate appearing for the
Appellant, has taken us through the Joint Development Agreement
together with the Deed of Modification in great detail. His first submission
is that it would be wholly incorrect to state that a mere 'license to enter'
had been granted. According to him, if these two documents were read
as a whole, it is clear that legal possession was actually handed over to
him in order to do three things: (1) construct tenements which were to
be handed over to MHADA free of cost; (2) construct tenements in
which the 672 occupiers of the erstwhile tenements were to be housed;
and (3) thereafter recoup costs and make profit by sale of what was
called the 'free sale component' that would be left over. Apart from the
above, he went through the NCLT order dated 02.04.2018 in great detail,
and stated that there is a conceptual confusion in the said order, inasmuch
as Section 14(1)(b) of the Code was not the subject-matter of
consideration, in which case it would have been necessary to see other
sections dealing with "assets" that pertain to the Corporate Debtor, such
as Sections 18 and 36 of the Code. If Section 14(1)(d), on the other
hand, were to be seen, it does not mention the expression "assets" at all
but only refers to "property", which according to Mr. Mehta was defined
extremely widely. He argued that, in any event, on the plain language of
Section 14(1)(d), it was not necessary for him to make out any case as
to legal possession having been handed over to him, as the expression
used by Section 14(1)(d) and applied to the facts of his case is '... is
occupied by'. He argued that applying the latin maxim reddendo singula
singulis, it is clear that any recovery of a property by an owner where
such property is 'occupied by' the Corporate Debtor would clearly fall
within Section 14(1)(d), the expression "...or in the possession of"
going with the expression "lessor" and not "owner". This being the case,
he contended that it is clear that when two expressions of different
import are used within the same sub-section, they are meant to mean
different things. The expression 'occupied' would have to be confined
to physical occupation or use, and not to legal possession, which is a
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DEVELOPMENT AUTHORITY THR. ITS CHAIRMAN [R. F. NARIMAN, J.]
separate concept in law. He cited a number of authorities to buttress his
arguments.
3. Mr. Dushyant Dave, learned Senior Advocate appearing on
behalf of MHADA, painstakingly took us through the various provisions
of the Maharashtra Housing and Area Development Act, 1976
(hereinafter referred to as the "MHADA Act"). He relied, in particular,
upon the various clauses in the preamble and then referred to Sections
4, 5, 37, 66 and 74 and relied strongly upon Sections 76 and 79 of the
MHADA Act to argue that joint development schemes that the Authorities
concerned enter into with the builders must first be with the previous
approval of the Authority, and such schemes have to be executed under
the supervision of the Authority. This being the case, according to him,
there is no question of any possession or occupation being handed over
and, as a result, Section 14(1)(d) of the Code would not apply. He also
strongly relied upon a recent judgment by my brother S. Ravindra Bhat,
J. in Municipal Corporation of Greater Mumbai (MCGM) vs.
Abhilash Lal & Ors. (Civil Appeal No. 6350 of 2019), to buttress his
proposition that Section 238 of the Code, which contains a non-obstante
clause getting out of harm's way other statutes, cannot be extended
beyond the provisions of the Code. He exhorted us to give full play to
the MHADA Act, and if that were done it is obvious that any clash
between the MHADA Act and the Insolvency Code would then have to
be resolved, at least on the facts of this case, in favour of MHADA. He
also referred to a Bombay High Court order dated 05.04.2018, in which
it was stated that MHADA had taken symbolic possession on 05.04.2018.
4. Mr. Basava Prabhu Patil, learned Senior Advocate appearing
on behalf of some of the homebuyers, also referred to and relied upon
the judgment of my brother S. Ravindra Bhat, J. Both Mr. Dave and Mr.
Patil referred to and relied upon a recent judgment of this Court in Sushil
Kumar Agarwal vs. Meenakshi Sadhu and Others (2019) 2 SCC
241 in which, in the context of specific performance, development
agreements were categorized into three types, and it was stated that
where interests in property were not created by any category, such
agreements could not be specifically performed.
5. Having heard the learned senior counsel appearing for all the
parties, it is necessary to first set out some of the provisions of the Code.
Section 3(27) reads as follows:
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"3. Definitions. In this Code, unless the context otherwise
requires,-
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(27) "property" includes money, goods, actionable claims, land
and every description of property situated in India or outside India
and every description of interest including present or future or
vested or contingent interest arising out of, or incidental to,
property;"
Section 14 is set out as follows:
"14. Moratorium.
(1) Subject to provisions of sub-sections (2) and (3), on the
insolvency commencement date, the Adjudicating Authority shall
by order declare moratorium for prohibiting all of the following,
namely:-
(a) the institution of suits or continuation of pending suits or
proceedings against the corporate debtor including execution of
any judgment, decree or order in any court of law, tribunal,
arbitration panel or other authority;
(b) transferring, encumbering, alienating or disposing of by the
corporate debtor any of its assets or any legal right or beneficial
interest therein;
(c) any action to foreclose, recover or enforce any security interest
created by the corporate debtor in respect of its property including
any action under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (54 of
2002);
(d) the recovery of any property by an owner or lessor where
such property is occupied by or in the possession of the corporate
debtor.
(2) The supply of essential goods or services to the corporate
debtor as may be specified shall not be terminated or suspended
or interrupted during moratorium period.
(3) The provisions of sub-section (1) shall not apply to-
(a) such transaction as may be notified by the Central Government
in consultation with any financial regulator;
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(b) a surety in a contract of guarantee to a corporate debtor.
(4) The order of moratorium shall have effect from the date of
such order till the completion of the corporate insolvency resolution
process:
Provided that where at any time during the corporate insolvency
resolution process period, if the Adjudicating Authority approves
the resolution plan under sub-section (1) of section 31 or passes
an order for liquidation of corporate debtor under section 33, the
moratorium shall cease to have effect from the date of such
approval or liquidation order, as the case may be."
(emphasis supplied)
Section 18, on which great reliance is placed, is also set out
hereunder:
"18. Duties of interim resolution professional.
(1) The interim resolution professional shall perform the following
duties, namely:-
(a) collect all information relating to the assets, finances and
operations of the corporate debtor for determining the financial
position of the corporate debtor, including information relating to-
(i) business operations for the previous two years;
(ii) financial and operational payments for the previous two years;
(iii) list of assets and liabilities as on the initiation date; and
(iv) such other matters as may be specified;
(b) receive and collate all the claims submitted by creditors to
him, pursuant to the public announcement made under sections
13 and 15;
(c) constitute a committee of creditors;
(d) monitor the assets of the corporate debtor and manage its
operations until a resolution professional is appointed by the
committee of creditors;
(e) file information collected with the information utility, if
necessary; and
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(f) take control and custody of any asset over which the corporate
debtor has ownership rights as recorded in the balance sheet of
the corporate debtor, or with information utility or the depository
of securities or any other registry that records the ownership of
assets including-
(i) assets over which the corporate debtor has ownership rights
which may be located in a foreign country;
(ii) assets that may or may not be in possession of the corporate
debtor;
(iii) tangible assets, whether movable or immovable;
(iv) intangible assets including intellectual property;
(v) securities including shares held in any subsidiary of the
corporate debtor, financial instruments, insurance policies;
(vi) assets subject to the determination of ownership by a court or
authority;
(g) to perform such other duties as may be specified by the Board.
Explanation.-For the purposes of this section, the term "assets"
shall not include the following, namely:-
(a) assets owned by a third party in possession of the corporate
debtor held under trust or under contractual arrangements including
bailment;
(b) assets of any Indian or foreign subsidiary of the corporate
debtor; and
(c) such other assets as may be notified by the Central Government
in consultation with any financial sector regulator."
Section 31 which indicates the period of moratorium is also
important and is set out as follows:
"31. Approval of resolution plan.
(1) If the Adjudicating Authority is satisfied that the resolution
plan as approved by the committee of creditors under sub-section
(4) of section 30 meets the requirements as referred to in subsection (2) of section 30, it shall by order approve the resolution
plan which shall be binding on the corporate debtor and its
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employees, members, creditors, including the Central Government,
any State Government or any local authority to whom a debt in
respect of the payment of dues arising under any law for the time
being in force, such as authorities to whom statutory dues are
owed, guarantors and other stakeholders involved in the resolution
plan:
Provided that the Adjudicating Authority shall, before passing an
order for approval of resolution plan under this sub-section, satisfy
that the resolution plan has provisions for its effective
implementation.
(2) Where the Adjudicating Authority is satisfied that the resolution
plan does not confirm to the requirements referred to in sub-section
(1), it may, by an order, reject the resolution plan.
(3) After the order of approval under sub-section (1),-
(a) the moratorium order passed by the Adjudicating Authority
under section 14 shall cease to have effect; and
(b) the resolution professional shall forward all records relating to
the conduct of the corporate insolvency resolution process and
the resolution plan to the Board to be recorded on its database.
(4) The resolution applicant shall, pursuant to the resolution plan
approved under sub-section (1), obtain the necessary approval
required under any law for the time being in force within a period
of one year from the date of approval of the resolution plan by the
Adjudicating Authority under sub-section (1) or within such period
as provided for in such law, whichever is later:
Provided that where the resolution plan contains a provision for
combination, as referred to in section 5 of the Competition Act,
2002 (12 of 2003), the resolution applicant shall obtain the approval
of the Competition Commission of India under that Act prior to
the approval of such resolution plan by the committee of creditors."
Section 36(4) which is also relied upon, particularly by the NCLT
judgment, is set out as follows:
"36. Liquidation estate.
(4) The following shall not be included in the liquidation estate
assets and shall not be used for recovery in the liquidation:-
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(a) assets owned by a third party which are in possession of the
corporate debtor, including-
(i) assets held in trust for any third party;
(ii) bailment contracts;
(iii) all sums due to any workman or employee from the provident
fund, the pension fund and the gratuity fund;
(iv) other contractual arrangements which do not stipulate transfer
of title but only use of the assets; and
(v) such other assets as may be notified by the Central Government
in consultation with any financial sector regulator;
(b) assets in security collateral held by financial services providers
and are subject to netting and set-off in multi-lateral trading or
clearing transactions;
(c) personal assets of any shareholder or partner of a corporate
debtor as the case may be provided such assets are not held on
account of avoidance transactions that may be avoided under this
Chapter;
(d) assets of any Indian or foreign subsidiary of the corporate
debtor; or
(e) any other assets as may be specified by the Board, including
assets which could be subject to set-off on account of mutual
dealings between the corporate debtor and any creditor."
6. The Joint Development Agreement, in the present case, makes
it clear that a license is granted to the developer (i.e. the Corporate
Debtor) to enter upon the land, demolish the existing structures and to
construct and erect new structures and allot tenements. This is done in
the Joint Development Agreement as follows:
"1.1.9 License Agreement shall mean and include an agreement
by which a license will be granted in favour of the developer to
enter upon the said land, to demolish the existing structures, to
construct and erect new structures, to allot tenements in such
constructed structures to the tenants and to do all other acts as
are necessary for implementation of the project.
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1.1.10 Project shall mean the building/s to be constructed by the
developer and handed over to the society for housing the tenants
and to MHADA in terms of this agreement but shall not mean
and include the free sale buildings that the developer is entitled to
develop and construct in terms of this agreement and in terms of
the plan."
"2.1.2 For the performance of the project, it is expressly agreed
between the parties that:
xxx xxx xxx
(xxvi) It is agreed that the license will be granted to the Developer
as per the requirement of the project. After completion of the
development, the beneficiaries housing societies will have to enter
into lease deed with MHADA.
(xxvii) The Developer shall abide the terms of indemnity bond
regarding the responsibility and risk for implementation, execution
and completion of the project and specification and quality of work
to be executed which is submitted to the VP and CEO/MHADA.
xxx xxx xxx
(xxxix) For the purpose of rehabilitation of the tenants and
implementing the project, MHADA hereby grants the license in
the favour of the Developer to enter upon the said land, to demolish
the existing structures, to construct and erect new structures, to
allot tenements in such constructed structures to the tenants and
to do all other acts as are necessary for implementation of the
project. After completion of the project by the Developer and
recovery of all the dues by MHADA, MHADA shall execute
separate lease deeds in favour of the Society and in favour of the
Developer of free sale tenements constructed by the Developer.
All the tenements both Rehab and sale will have to be allotted on
ownership basis.
xxx xxx xxx
(xlvi) The Developer will be permitted to use their share of 50%
of the built-up area for non-residential purpose. For this purpose,
additional premium will not be charged by MHADA."
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The aforesaid provisions of the Joint Development Agreement
would show that, at the very least, a license is granted in favour of the
developer to enter upon the land to demolish existing structures, construct
and erect new structures, and allot to erstwhile tenants, tenements in
such constructed structures in three categories - (1) the earlier tenants/
licensees of structures that were demolished; (2) tenements to be allotted
free of cost to MHADA; and (3) what is referred to as "free sale
component" which the developers then sell and exploit to recover or
recoup cost and make profit. It is wholly unnecessary for us to refer to
any other clauses of the Joint Development Agreement. It is also not
necessary for the purpose of this case to state as to whether an interest
in property is or is not created by the said Joint Development Agreement.
7. A bare reading of Section 14(1)(d) of the Code would make it
clear that it does not deal with any of the assets or legal right or beneficial
interest in such assets of the corporate debtor. For this reason, any
reference to Sections 18 and 36, as was made by the NCLT, becomes
wholly unnecessary in deciding the scope of Section 14(1)(d), which
stands on a separate footing. Under Section 14(1)(d) what is referred to
is the "recovery of any property". The 'property' in this case consists of
land, ad-measuring 47 acres, together with structures thereon that had
to be demolished. 'Recovery' would necessarily go with what was parted
by the corporate debtor, and for this one has to go to the next expression
contained in the said sub-section.
8. One thing is clear that "owner or lessor" qua "property" is then
to be read with the expression "occupied or in the possession of". One
manner of reading this clause is to state that whether recovery is sought
by an owner or lessor, the property should either be occupied by or be in
the possession of the corporate debtor. The difficulty with this
interpretation is that a "lessor" would not normally seek recovery of
property "occupied by" a tenant - having leased the property, a transfer
of property has taken place in favour of a tenant, "possession" of which
would then have to be recovered. This is where the latin maxim reddendo
singula singulis comes in. In an earlier judgment of this Court reported
in The Member, Board of Revenue vs. Arthur Paul Benthall [1955]
2 SCR 842, this Court dealt with two different expressions used in Sections
5 and 6 of the Indian Stamp Act, 1899, and held:
"We are unable to accept the contention that the word "matter"
in Section 5 was intended to convey the same meaning as the
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word "description" in Section 6. In its popular sense, the expression
"distinct matters" would connote something different from distinct
"categories". Two transactions might be of the same description,
but all the same, they might be distinct. If A sells Black-acre
to X and mortgages White-acre to Y, the transactions fall under
different categories, and they are also distinct matters. But
if A mortgages Black-acre to X and mortgages White-acre to Y,
the two transactions fall under the same category, but they would
certainly be distinct matters. If the intention of the legislature was
that the expression 'distinct matters' in Section 5 should be
understood not in its popular sense but narrowly as meaning
different categories in the Schedule, nothing would have been
easier than to say so. When two words of different import are
used in a statute in two consecutive provisions, it would be difficult
to maintain that they are used in the same sense, and the conclusion
must follow that the expression "distinct matters" in Section 5
and "descriptions" in Section 6 have different connotations."
(at page 846)
9. In Koteswar Vittal Kamath vs. K. Rangappa Baliga & Co
(1969) 1 SCC 255, this Court had before it the proviso to Article 304(b)
of the Constitution of India. This proviso is set out herein below:
"Provided that no Bill or amendment for the purposes of clause
(b) shall be introduced or moved in the Legislature of a State
without the previous sanction of the President."
The expression "no Bill or amendment" was read distributively
with the expression "shall be introduced or moved in the Legislature of a
State", it being clear that a bill is "introduced" and an amendment
"moved", in the following paragraphs:
"13. The High Court, in this connection, relied on two earlier
decisions of the same court in George v. State of TravancoreCochin, AIR 1954 Tra-Co 34 and State v. Philipose Philip, AIR
1954 Tra-Co 257. In fact, the High Court, in the present case,
expressed its decision in almost the same language as was
contained in the case of George v. State. In the second case
of State v. Philipose Philip, this aspect was not clearly discussed.
The point, however, was considered in detail by a Full Bench of
that High Court in Ulahannan Mathai v. State, AIR 1955
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Tra-Co 82. The High Court interpreted the expression "No Bill or
amendment shall be introduced or moved" in the proviso as
requiring that the Bill should neither be introduced nor moved
without the prior sanction of the President, and, since in the case
of Act 5 of 1950, the Bill was moved for consideration, without
the prior sanction of the President, on 23rd March, 1950, after the
Constitution had come into force, there had been non-compliance
with the proviso. The court rejected the contention put forward
before it that what the proviso really stipulates is that no Bill "shall
be introduced" or "amendment moved" in the Legislature of a
State without the previous sanction of the President. That argument
was advanced on the basis of the maxim "reddendo singula
singulis" which, according to Black's Interpretation of Laws,
means:
"Where a sentence in a statute contains several antecedents
and several consequences, they are to be read distributively, that
is to say, each phrase or expression is to be referred to its
appropriate object."
14. The court based its decision on the view that, if the
interpretation urged before it was accepted, it would be possible
to introduce a Bill which required no Presidential sanction, get it
amended by a Select Committee in such a way as to make it
require the Presidential sanction in case it was originally introduced
in the amended form and then pass it into law, and thus escape
the necessity for the prior Presidential sanction provided by Article
304 of the Constitution. It was held that there can be no doubt
that such a result could never have been intended by the makers
of the Constitution. In our opinion, the High Court did not correctly
appreciate the position. The language of the proviso cannot be
interpreted in the manner accepted by the High Court without
doing violence to the Rules of construction. If both the words
"introduced" or "moved" are held to refer to the Bill, it must
necessarily be held that both those words will also refer to the
word "amendment". On the face of it, there can be no question of
introducing an amendment. Amendments are moved and then, if
accepted by the House, incorporated in the Bill before it is passed.
There is further an indication in the Constitution itself that wherever
a reference is made to a Bill, the only step envisaged is introduction
of the Bill. There is no reference to such a step as a Bill being
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moved. The articles, of which notice may be taken in this
connection, are Articles 109, 114, 117, 198 and 207. In all these
articles, whatever prohibition is laid down relates to the introduction
of a Bill in the Legislature. There is no reference at any stage to
a Bill being moved in a House. The language thus used in the
Constitution clearly points to the interpretation that, even in the
proviso to Article 304, the word "introduced" refers to the
Bill, while the word "moved" refers to the amendment."
10. Likewise, in Kailash Nath Agarwal and Others v.
Pradeshiya Industrial & Investment Corporation of U.P. Ltd. and
Another (2003) 4 SCC 305, this Court referred to Section 22(1) of the
Sick Industries Companies (Special Provisions) Amendment Act, 1994
and applied the aforesaid latin maxim to the words "suit" and
"proceeding" as follows:
"20.