IMPORTANT POINT
Provisions of Special Court (Trial of Offences Relating to Transactions and Securities) Act, 1992 would prevail over the provisions of Sick Industrial Companies (Special Provisions) Act, 1985.

JUDGMENT

Kirpal, J.-The appellant herein on 3rd March, 1992, 20th March, 1992 and 25th March, 1992 took a loan of Rs. 50 lakhs, Rs. 25 lakhs and Rs. 25 lakhs respectively from respondent No.1. According to the appellant, the agreement was to repay the loan amount within three years together with interest at 18 per cent per annum.

2. Repayment not having been made and respondent No. 1 having been notified under Section 3 of the Special Court (Trial of Offences Relating to Transactions And Securities) Act, 1992 (hereinafter referred to as "Special Court Act"), proceedings were initiated by the Custodian before the Special Court for the recovery of the said money.

3. There was no dispute before the Special Court with regard to the fact that Rs. 1 crore had been taken on loan by the appellant. The claim against the appellant before the Special Court was for a sum of Rs. 1,57,20,216.24/- consisting of principal plus interest. The main contention raised before the Special Court related to the rate of interest. The respondent had claimed interest at the rate of 21.5 per cent on the amount of Rs. 50 lakhs and 23 per cent on the two loans of Rs. 25 lakhs each. The Special Court came to the conclusion that the appellant herein had been put to notice by the Custodian as far back as 3rd June, 1993 that if it did not deposit the amount it will become liable to pay interest at a higher rate and the payment had not been made. The Special Court came to the conclusion that the claim of interest made by the respondent was justified. The suit of the respondent was, accordingly, decreed as prayed for alongwith costs.

4. During the pendency of this appeal, a further development had taken place and that is that the appellant has become sick and proceedings are going on under the provisions of The Sick Industrial Companies (Special Provisions) Act, 1985.

5. It is contended on behalf of the appellant that firstly, the Special Court was not justified in awarding interest in excess of 18 per cent and the second contention was that in view of the special provisions contained in the Sick Industrial Companies (Special Provisions) Act, 1985 no proceedings should have been initiated or continued under the Special Court Act.

6. As far as the question of interest is concerned, it appears that there was no formal agreement which had been entered into between the parties at the time when the loan was advanced in March, 1992. The correspondence which has been placed on record, however, clearly indicates that the respondent had claimed interest at the rate of 21.5 per cent on the loan of Rs. 50 lakhs first advanced and on the balance amount the claim was of 23 per cent. There is no document on the record to show that the amount of interest claimed was immediately refuted, though it was belatedly refuted by the appellant. We do not find any infirmity in the decision of the Special Court in coming to the conclusion that the appellant was liable to pay the rate of interest as claimed by the respondent.

7. Coming to the second question, there is no doubt that the 1985 Act is a special Act. Section 32(1) of the said Act reads as follows :-

"32. Effect of the Act on other laws.- (1) The provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the Memorandum or Articles of Association of an industrial company or in any other instrument having effect by virtue of any law other than this Act."

8. The effect of this provision is that the said Act will have effect notwithstanding anything inconsistent therewith contained in any other law except to the provisions of the Foreign Exchange Regulation Act, 1973 and the Urban Land (Ceiling and Regulation) Act, 1976. A simil