2014 Supreme(Bom) 534

High Court of Judicature at Bombay
A.S. OKA & M.S. SONAK, JJ.
Swayam Realtors and Traders LLP
Versus
The Appellate Authority Industrial and Financial Reconstruction & Others
Writ Petition No. 8816 of 2012
Decided On : 28-02-2014

Headnote:Urban Land (Ceiling and Regulation) Act, 1976 - Section 10 - Constitution of India, Article 226 - Challenge to notice under Section 10 of Act. - Writ of prohibition cannot be applied for in respect of notices or orders passed under Section 10 of Act. - However, even the same was withdrawn with liberty ’to adopt alternate remedy’. The alternate remedy, in the context would obviously mean some remedy to quash and set aside of notice, orders or action under ULC. Approaching the BIFR and seeking implementation of the rehabilitation scheme upon the presumed premise that such notices, orders and action under ULC is ’non est, void or nullity’ in the context, did not constitute an alternate remedy. There is a distinction between a genuine alternate remedy and an expedient remedy. The remedy adopted by the petitioner before the BIFR was not to quash and set aside notices, orders or action under the ULC, but the so called remedy was based upon the presumed premise that the notices, orders and action under ULC were ’non est, void and nullities’ and therefore the same ought to have been ’simply ignored. This was clearly impermissible.

       Urban Land (Ceiling and Regulation) Act, 1976 - Sections 20 and 42 - Sick Industrial Companies (Special Provision) Act, 1985, Section 32 - Effect of provisions. - Provisions of ULC Act 1976 shall have a primacy over provisions of SICA 1985 in case of any inconsistency between two. - The provisions contained in Section 42 of ULC make it clear that the provisions of ULC shall have effect notwithstanding anything inconsistent therewith in any other law for the time being in force or any custom, usage, agreement, decree or order of a Court, tribunal or other authority. Just as the SICA would constitute ‘other law‘ so also the BIFR and AAIFR would constitute ‘Tribunal or any other Authority‘ as contemplated by Section 42 of the ULC. The over riding effect conferred by the legislature upon the provisions of ULC is not qualified. This is further clear upon comparison of this provision with Section 32 of the SICA.

       The provisions contained in SICA override other laws ‘except the provisions of FERA and ULC‘. At the stage when SICA came to be enacted, the Parliament was very much aware of the provisions contained in the ULC. Normally there is a presumption that the legislature while enacting a law has complete knowledge of the existing laws which may or may not be affected by the enactment proposed to be enacted.

       In the present case, the Parliament, in enacting Section 32 of SICA has taken express cognizance of the provisions contained in the ULC. Thus, the legislative intent is quite clear in that the provisions of ULC shall have a primacy over the provisions of SICA, in case of any inconsistency between the two.

       An exemption granted by an executive or administrative authority can not wipe out the statutory effect of the provisions contained either in Section 32 of the SICA or more particularly Section 42 of the ULC. The provisions of Section 20 of ULC, under which the exemption came to be granted authorised the Government to exempt property (excess vacant land) from the applicability of Chapter III, which comprises Sections 3 to 24. Section 42 of ULC is not a part of Chapter III of ULC.

       It is one thing to assert that notices, orders or action under Section 10 of ULC, which are administrative in nature, are incompetent as long as exemption order under Section 20 of the ULC subsists, however, it is quite another proposition to assert that the provisions of ULC shall not at all be applicable to any proceedings under SICA in regard to property covered by an exemption notification, notwithstanding the express language of Section 32 of SICA and Section 42 of ULC. The latter broader proposition, is unacceptable.

       Constitution of India - Article 226 - Alternative remedy. - Alternative remedy means availability of some remedy to quash and set aside Order. - Notice under Section 10(3) of ULC, in terms of which the subject property is deemed to have vested in the State, was issued on 16.5.2005. The notice Section 10 (5) of ULC was issued on 31.1.2007. If the petitioner or the respondent No. 4 were of the opinion that such notices or orders or the action in pursuance of the same were without jurisdiction or in excess of jurisdiction, then it was necessary for them to take out appropriate proceedings for quashing the same within reasonable time. As held by the Supreme Court, even the Courts will invalidate an order only if right remedy is sought by the right person in the right proceedings and circumstances.

       Constitution of India - Article 226 - Void orders. - Alleged void orders cannot be simply ignored as until said orders are set aside, orders remains valid and effective. - In the result, the view taken by the majority members of AAIFR, in that the AAIFR has no jurisdiction to adjudicate upon the validity of notices, orders or action under the ULC commends to Court as being consistent with the provisions of Section 32 of SICA and Section 42 of ULC and therefore Court upholds the same.

       Constitution of India - Article 226 - Alternative remedy. - Alternative remedy means availability of some remedy to quash and set aside Order. - Notice under Section 10(3) of ULC, in terms of which the subject property is deemed to have vested in the State, was issued on 16.5.2005. The notice Section 10 (5) of ULC was issued on 31.1.2007. If the petitioner or the respondent No. 4 were of the opinion that such notices or orders or the action in pursuance of the same were without jurisdiction or in excess of jurisdiction, then it was necessary for them to take out appropriate proceedings for quashing the same within reasonable time. As held by the Supreme Court, even the Courts will invalidate an order only if right remedy is sought by the right person in the right proceedings and circumstances.

       Sick Industrial Companies Act, 1985 - Sections 18(5) and 32 - ULC Act, 1976, Sections 10, 20 and 42 - Rehabilitation of sick industrial companies. - Rehabilitation of SIC cannot be initiated without seeking quashment and setting aside of notice under Section 10 of Act 1976 by appropriate forum.