MR. RAJENDRA K. BHUTTA versus MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY THROUGH ITS CHAIRMAN & ANR. on 19 February 2020

[2020] 4 S.C.R. 305

MR. RAJENDRA K. BHUTTA

v.

MAHARASHTRA HOUSING AND AREADEVELOPMENT AUTHORITY THROUGH ITSCHAIRMAN & 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 wasentered into between the society representing persons occupyingtenements, Maharashtra Housing and Area Development Authority(MHADA) and the Corporate Debtor in a project for thedevelopment of 47 acres of land – The Corporate Debtor enteredinto a Loan Agreement with a bank for a sum of Rs. 200 crores –The Corporate Debtor defaulted in repayment of loan – Consequentto which, an application u/s.7 of the Code was admitted, appointinginterim resolution professional and a moratorium u/s. 14 was alsodeclared – After the imposition of the moratorium period u/s. 14,the MHADA issued a termination notice of the Joint DevelopmentAgreement to the Corporate Debtor – It was further stated that theCorporate Debtor would have to hand over possession to MHADA,which would then enter upon the plot and take possession of theland including all structures thereon – The Appellant-InterimResolution Professional filed an application before the NCLT torestrain MHADA from taking over possession of the land tillcompletion of the CIRP – The NCLT dismissed the said applciationand stated that s.14(1)(d) does not cover licences to enter uponland in pursuance of the Joint Development Agreements – TheNCLAT held that the land belonged to the MHADA and which wasnot formally transferred in favour of the Corporate Debtor andhence, 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 – Beforethe Supreme Court, the appellant contended that it is wholly incorrectto state that a mere ‘licence to enter’ was granted, the reading of

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Athe relevant documents as a whole clearly show that the legalpossession was actually handed over to the Corporate Debtor – Itwas further contended that any recovery of a property by an ownerwhere such property is ‘occupied by’ the Corporate Debtor wouldclearly fall with s.14(1)(d) – Held: A bare reading of s.14(1)(d) ofthe Code would make it clear that it does not deal with any of theBassets or legal right or beneficial interest in such assets of theCorporate Debtor – Where recovery of property is to be made byan 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 physicalCpossession or being actually used by – In the instant case, it isclear that the Joint Development Agreement read with the Deed ofmodification has granted a license to the developer (CorporateDebtor) to enter upon the property, with a view to do all things thatare mentioned in it, there can be no gainsaying that after such entry, the property would not be ‘occupied by’ the developer – Therefore,Dthe impugned judgment of NCLAT is set aside and the NCLT isdirected to dispose of the resolution professional’s application.

Maxims – reddendo singula singulis – discussed.

Words and Phrases – ‘occupied by’ and ‘possession’ –Ediscussed.

Allowing the appeal, the Court

Conclusion

HELD: 1. The provisions of the Joint DevelopmentAgreement would show that, at the very least, a license is grantedin favour of the developer to enter upon the land to demolishFexisting structures, construct and erect new structures, and allotto erstwhile tenants, tenements in such constructed structuresin three categories – (1) the earlier tenants/licensees of structuresthat were demolished; (2) tenements to be allotted free of costto Maharashtra Housing and Area Development AuthorityG(MHADA); and (3) what is referred to as “free sale component”which the developers then sell and exploit to recover or recoupcost and make profit. It is wholly unnecessary for this Court torefer to any other clauses of the Joint Development Agreement.It is also not necessary for the purpose of this case to state as towhether an interest in property is or is not created by the saidHJoint Development Agreement. [Paras 6][320-A-C]

2. A bare reading of Section 14(1)(d) of the Insolvency andBankruptcy Code, 2016 would make it clear that it does not dealwith any of the assets or legal right or beneficial interest in suchassets of the corporate debtor. For this reason, any reference toSections 18 and 36, as was made by the NCLT, becomes whollyunnecessary in deciding the scope of Section 14(1)(d), whichstands on a separate footing. Under Section 14(1)(d) what isreferred to is the “recovery of any property”. The ‘property’ inthis case consists of land, ad-measuring 47 acres, together withstructures thereon that had to be demolished. ‘Recovery’ wouldnecessarily go with what was parted by the corporate debtor, andfor this, one has to go to the next expression contained in thesaid sub-section. [Para 7][320-D-E]

3. The conspectus of the Supreme Court judgments wouldshow that the expression “occupied by” would mean or besynonymous with being in actual physical possession of or beingactually used by, in contra-distinction to the expression“possession”, which would connote possession being eitherconstructive or actual and which, in turn, would include legallybeing in possession, though factually not being in physicalpossession. Since it is clear that the Joint DevelopmentAgreement read with the Deed of Modification has granted alicense to the developer (Corporate Debtor) to enter upon theproperty, with a view to do all the things that are mentioned in it,there can be no gain saying that after such entry, the propertywould not be “occupied by” the developer. [Para 15][331-E-F]

4. There is no doubt whatsoever that important functionsrelating to repairs and re-construction of dilapidated buildingsare given to MHADA. Equally, there is no doubt that in a givenset of circumstances, the Board may, on such terms and conditionsas may be agreed upon, and with the previous approval of theAuthority, handover execution of any housing scheme under itsown supervision. However, when it comes to any clash betweenthe Maharashtra Housing and Area Development Act, 1976 andthe Insolvency Code, on the plain terms of Section 238 of theInsolvency Code, the Code must prevail. This is for the verygood reason that when a moratorium is spoken of by Section 14

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[2020] 4 S.C.R.

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Aof the Code, the idea is that, to alleviate corporate sickness, astatutory status quo is pronounced under Section 14 the momenta petition is admitted under Section 7 of the Code, so that theinsolvency resolution process may proceed unhindered by any ofthe obstacles that would otherwise be caused and that are dealtwith by Section 14. The statutory freeze that has thus been madeBis, unlike its predecessor in the SICA, 1985 only a limited one,which is expressly limited by Section 31(3) of the Code, to thedate of admission of an insolvency petition up to the date that theAdjudicating Authority either allows a resolution plan to comeinto effect or states that the corporate debtor must go intoCliquidation. For this temporary period, at least, all the thingsreferred to under Section 14 must be strictly observed so thatthe corporate debtor may finally be put back on its feet albeitwith a new management. [Para 16][333-F-H; 334-A-B]

The Member, Board of Revenue v. Arthur Paul BenthallD[1955] 2 SCR 842; Koteswar Vittal Kamath v. K.Rangappa Baliga & Co. (1969) 1 SCC 255 : [1969] 3SCR 40; Kailash Nath Agarwal and Ors. v. PradeshiyaIndustrial & Investment Corporation of U.P. Ltd andAnr. (2003) 4 SCC 305 : [2003] 1 SCR 1159; IndustrialSupplies Pvt. Ltd. and Anr. v. Union of India and Ors.E(1980) 4 SCC 341 : [1981] 1 SCR 375; Chief Inspectorof Mines v. Lala Karam Chand Thapar [1962] 1 SCR9; 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)Fv. Abhilash Lal & Ors. (2020) 13 SCC 234; SushilKumar Agarwal v. Meenakshi Sadhu and Ors. (2019)2 SCC 241 : [2018] 12 SCR 756 – distinguished.

Ude Bhan and Others v. Kapoor Chand and OthersAIR (1967) P&H 53 (FB) – referred to.G

Case Law Reference

[2018] 12 SCR 756distinguishedParas 4, 19[1955] 2 SCR 842relied onPara 8

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MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREADEVELOPMENT AUTHORITY THR. ITS CHAIRMAN

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12248of 2018.

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From the Judgment and Order dated 14.12.2018 of the NationalCompany Law Appellate Tribunal, New Delhi in Company Appeal (AT)(Insolvency) No. 119 of 2018.

Dhruv Mehta, Sr. Adv., Ashish Verma, Ms. Avika Madhur, DakshWadhawan, Prashant Chaudhary, Advs. for the Appellant.

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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.

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1. This appeal raises a question as to the correct interpretation ofSection 14(1)(d) of the Insolvency and Bankruptcy Code, 2016(hereinafter referred to as “the Code”). The facts necessary to appreciatethe setting in which this question arises are as follows:

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i.On 01.11.2007, a Resolution bearing No. 6280 was passed bythe Maharashtra Housing and Area Development Authority(hereinafter referred to as ‘the MHADA’) to execute a jointdevelopment agreement with the Corporate Debtor, i.e. GuruAshish Construction Private Limited, and Goregaon SiddharthNagar Sahakar Griha Nirman Sanstha Limited (a Society forpersons who are displaced and who are to be re-housed in theproject for joint development of land, ad-measuring about 40acres), which envisaged re-development insofar as 672tenements in Siddharth Nagar, Goregaon, Mumbai wereconcerned.

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Aii. On 03.03.2008, the Maharashtra State Government grantedits approval to the aforesaid Resolution.

iii. On 10.04.2008, a Tripartite Joint Development Agreement(hereinafter referred to as the “Joint DevelopmentAgreement”) was entered into between the SocietyBrepresenting persons occupying 672 tenements, MHADA andthe Corporate Debtor.

iv. On 25.03.2011, a Loan Agreement was entered into andexecuted between the Union Bank of India and the CorporateDebtor for a sum of Rs. 200 Crores.C

v. On 09.11.2011, a Deed of Modification was entered intobetween the three parties to the Joint Development Agreement,as after carrying out the survey of the land in question, it wasfound that certain parcels of land, which were identified withcertain city survey numbers, were omitted, as a result of whichDthey were also added, now making the project for a total of 47acres of land.

vi. As a result of the Corporate Debtor defaulting in repaymentof the loan to its financial creditor, namely, the Union Bank ofIndia, an Insolvency Application under Section 7 of the Code,Ewhich was filed on 15.05.2017, was admitted on 24.07.2017,appointing an Interim Resolution Professional (i.e. the Appellantbefore us). A moratorium in terms of Section 14 was alsodeclared by this order.

vii. On 12.01.2018 - after the imposition of the moratorium periodunder Section 14 of the Code - MHADA issued a terminationFnotice to the Corporate Debtor stating that upon expiry of 30days from the date of receipt of the notice, the JointDevelopment Agreement as modified would stand terminated.It was further stated that the Corporate Debtor would have tohandover possession to MHADA, which would then enter uponGthe plot and take possession of the land including all structuresthereon.

viii.One hundred and eighty days from the start of the CorporateInsolvency Resolution Process (hereinafter referred to as “theCIRP”) expired on 19.01.2018. The NCLT, by order datedH

24.01.2018, extended the CIRP period by ninety days, as ispermissible under the Code.

ix. On 01.02.2018, the Appellant filed M.A. No. 96 of 2018, seekinga direction from the NCLT to restrain MHADA from takingover possession of the land till completion of the CIRP,contending that such a recovery of possession was inderogation of the moratorium imposed under Section 14 of theCode. The NCLT, by order dated 02.04.2018, dismissed theaforesaid application, stating that Section 14(1)(d) of the Codedoes not cover licenses to enter upon land in pursuance ofJoint Development Agreements, stating that such licenseswould 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 amountof time taken by the NCLT in deciding the application underSection 7 under the Code, being 55 days, was sought to beomitted from the total number of days allowable under theCode. This application was partially granted, excluding 38 outof 55 days. An appeal to the NCLAT proved successful,whereby the NCLAT, by order dated 09.05.2018, allowed theappeal and allowed the entire 55 days so taken before theNCLT to be excluded.

xi. On 03.07.2018, the Appellant filed an approved Resolution Planbefore the NCLT, Mumbai by way of I.A. No. 21433 of 2018.We are informed that this was within the extended period of55 days so granted by the NCLAT. It may only be mentionedthat the Resolution Plan was approved by 86.16% of theCommittee of Creditors. Ultimately, the NCLAT, by theimpugned order dated 14.12.2018, (after omitting to refer tothe order dated 09.05.2018), stated that 270 days are over, asa result of which the entire discussion of Section 14(1)(d) wouldnow become academic. However, it also decided:

“14. On perusal of record, we find that pursuant to the‘Joint Development Agreement’ the land of the ‘MaharashtraHousing and Area Development Authority’ was handed overto the ‘Corporate Debtor’ and ‘except for developmentwork’ the ‘Corporate Debtor’ has not accrued any right A

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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 theasset of the ‘Corporate Debtor’ for application of provisionsof Section 14(1)(d) of the ‘I&B Code’.”

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2. Mr. Dhruv Mehta, learned Senior Advocate appearing for theAppellant, has taken us through the Joint Development Agreementtogether with the Deed of Modification in great detail. His first submissionis 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 readCas a whole, it is clear that legal possession was actually handed over tohim in order to do three things: (1) construct tenements which were tobe handed over to MHADA free of cost; (2) construct tenements inwhich the 672 occupiers of the erstwhile tenements were to be housed;and (3) thereafter recoup costs and make profit by sale of what wasDcalled the ‘free sale component’ that would be left over. Apart from theabove, 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, inasmuchas Section 14(1)(b) of the Code was not the subject-matter ofconsideration, in which case it would have been necessary to see othersections dealing with “assets” that pertain to the Corporate Debtor, suchEas Sections 18 and 36 of the Code. If Section 14(1)(d), on the otherhand, were to be seen, it does not mention the expression “assets” at allbut only refers to “property”, which according to Mr. Mehta was definedextremely widely. He argued that, in any event, on the plain language ofSection 14(1)(d), it was not necessary for him to make out any case asFto legal possession having been handed over to him, as the expressionused by Section 14(1)(d) and applied to the facts of his case is ‘… isoccupied by’. He argued that applying the latin maxim reddendo singulasingulis, it is clear that any recovery of a property by an owner wheresuch property is ‘occupied by’ the Corporate Debtor would clearly fallwithin Section 14(1)(d), the expression “...or in the possession of”Ggoing with the expression “lessor” and not “owner”. This being the case,he contended that it is clear that when two expressions of differentimport are used within the same sub-section, they are meant to meandifferent things. The expression ‘occupied’ would have to be confinedto physical occupation or use, and not to legal possession, which is a H

separate concept in law. He cited a number of authorities to buttress hisarguments.

3. Mr. Dushyant Dave, learned Senior Advocate appearing onbehalf of MHADA, painstakingly took us through the various provisionsof 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 Sections4, 5, 37, 66 and 74 and relied strongly upon Sections 76 and 79 of theMHADA Act to argue that joint development schemes that the Authoritiesconcerned enter into with the builders must first be with the previousapproval of the Authority, and such schemes have to be executed underthe supervision of the Authority. This being the case, according to him,there is no question of any possession or occupation being handed overand, as a result, Section 14(1)(d) of the Code would not apply. He alsostrongly 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 hisproposition that Section 238 of the Code, which contains a non-obstanteclause getting out of harm’s way other statutes, cannot be extendedbeyond the provisions of the Code. He exhorted us to give full play tothe MHADA Act, and if that were done it is obvious that any clashbetween the MHADA Act and the Insolvency Code would then have tobe resolved, at least on the facts of this case, in favour of MHADA. Healso referred to a Bombay High Court order dated 05.04.2018, in whichit was stated that MHADA had taken symbolic possession on 05.04.2018.

4. Mr. Basava Prabhu Patil, learned Senior Advocate appearingon behalf of some of the homebuyers, also referred to and relied uponthe 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 SushilKumar Agarwal vs. Meenakshi Sadhu and Others (2019) 2 SCC241 in which, in the context of specific performance, developmentagreements were categorized into three types, and it was stated thatwhere interests in property were not created by any category, suchagreements could not be specifically performed.

5. Having heard the learned senior counsel appearing for all theparties, 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 otherwiserequires,—

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(27) “property” includes money, goods, actionable claims, landand every description of property situated in India or outside Indiaand every description of interest including present or future orvested or contingent interest arising out of, or incidental to,property;”

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Section 14 is set out as follows:

“14. Moratorium.

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(1) Subject to provisions of sub-sections (2) and (3), on theinsolvency commencement date, the Adjudicating Authority shallby order declare moratorium for prohibiting all of the following,namely:—

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(a) the institution of suits or continuation of pending suits orproceedings against the corporate debtor including execution ofany judgment, decree or order in any court of law, tribunal,arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by theEcorporate debtor any of its assets or any legal right or beneficialinterest therein;

(c) any action to foreclose, recover or enforce any security interestcreated by the corporate debtor in respect of its property includingany action under the Securitisation and Reconstruction of FinancialFAssets and Enforcement of Security Interest Act, 2002 (54 of2002); (d) the recovery of any property by an owner or lessor wheresuch property is occupied by or in the possession of the corporatedebtor.

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(2) The supply of essential goods or services to the corporatedebtor as may be specified shall not be terminated or suspendedor 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 GovernmentHin consultation with any financial regulator;

(b) a surety in a contract of guarantee to a corporate debtor.

(4) The order of moratorium shall have effect from the date ofsuch order till the completion of the corporate insolvency resolutionprocess:

Provided that where at any time during the corporate insolvencyresolution process period, if the Adjudicating Authority approvesthe resolution plan under sub-section (1) of section 31 or passesan order for liquidation of corporate debtor under section 33, themoratorium shall cease to have effect from the date of suchapproval or liquidation order, as the case may be.”

(emphasis supplied)

Section 18, on which great reliance is placed, is also set outhereunder:

“18. Duties of interim resolution professional.

(1) The interim resolution professional shall perform the followingduties, namely:—

(a) collect all information relating to the assets, finances andoperations of the corporate debtor for determining the financialposition 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 tohim, pursuant to the public announcement made under sections13 and 15;

(c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage itsoperations until a resolution professional is appointed by thecommittee of creditors; (e) file information collected with the information utility, ifnecessary; and A

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(f) take control and custody of any asset over which the corporatedebtor has ownership rights as recorded in the balance sheet ofthe corporate debtor, or with information utility or the depositoryof securities or any other registry that records the ownership ofassets including—

B(i) assets over which the corporate debtor has ownership rightswhich may be located in a foreign country;

(ii) assets that may or may not be in possession of the corporatedebtor;

(iii) tangible assets, whether movable or immovable; C

(iv) intangible assets including intellectual property;

(v) securities including shares held in any subsidiary of thecorporate debtor, financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court orDauthority; (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:—

E(a) assets owned by a third party in possession of the corporatedebtor held under trust or under contractual arrangements includingbailment; (b) assets of any Indian or foreign subsidiary of the corporatedebtor; and F

(c) such other assets as may be notified by the Central Governmentin consultation with any financial sector regulator.”

Section 31 which indicates the period of moratorium is alsoimportant and is set out as follows:

“31. Approval of resolution plan.

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(1) If the Adjudicating Authority is satisfied that the resolutionplan as approved by the committee of creditors under sub-section(4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolutionplan which shall be binding on the corporate debtor and its H

employees, members, creditors, including the Central Government,any State Government or any local authority to whom a debt inrespect of the payment of dues arising under any law for the timebeing in force, such as authorities to whom statutory dues areowed, guarantors and other stakeholders involved in the resolutionplan:

Provided that the Adjudicating Authority shall, before passing anorder for approval of resolution plan under this sub-section, satisfythat the resolution plan has provisions for its effectiveimplementation.

(2) Where the Adjudicating Authority is satisfied that the resolutionplan 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 Authorityunder section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating tothe conduct of the corporate insolvency resolution process andthe resolution plan to the Board to be recorded on its database.

(4) The resolution applicant shall, pursuant to the resolution planapproved under sub-section (1), obtain the necessary approvalrequired under any law for the time being in force within a periodof one year from the date of approval of the resolution plan by theAdjudicating Authority under sub-section (1) or within such periodas provided for in such law, whichever is later:

Provided that where the resolution plan contains a provision forcombination, as referred to in section 5 of the Competition Act,2002 (12 of 2003), the resolution applicant shall obtain the approvalof the Competition Commission of India under that Act prior tothe approval of such resolution plan by the committee of creditors.”

Section 36(4) which is also relied upon, particularly by the NCLTjudgment, is set out as follows:

“36. Liquidation estate.

(4) The following shall not be included in the liquidation estateassets and shall not be used for recovery in the liquidation:—

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A(a) assets owned by a third party which are in possession of thecorporate debtor, including—

(i) assets held in trust for any third party;

(ii) bailment contracts;

B(iii) all sums due to any workman or employee from the providentfund, the pension fund and the gratuity fund;

(iv) other contractual arrangements which do not stipulate transferof title but only use of the assets; and

(v) such other assets as may be notified by the Central GovernmentCin consultation with any financial sector regulator; (b) assets in security collateral held by financial services providersand are subject to netting and set-off in multi-lateral trading orclearing transactions;

(c) personal assets of any shareholder or partner of a corporateDdebtor as the case may be provided such assets are not held onaccount of avoidance transactions that may be avoided under thisChapter; (d) assets of any Indian or foreign subsidiary of the corporatedebtor; or E

(e) any other assets as may be specified by the Board, includingassets which could be subject to set-off on account of mutualdealings between the corporate debtor and any creditor.”

6. The Joint Development Agreement, in the present case, makesFit clear that a license is granted to the developer (i.e. the CorporateDebtor) to enter upon the land, demolish the existing structures and toconstruct and erect new structures and allot tenements. This is done inthe Joint Development Agreement as follows:

“1.1.9 License Agreement shall mean and include an agreementGby which a license will be granted in favour of the developer toenter upon the said land, to demolish the existing structures, toconstruct and erect new structures, to allot tenements in suchconstructed structures to the tenants and to do all other acts asare necessary for implementation of the project.

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1.1.10 Project shall mean the building/s to be constructed by thedeveloper and handed over to the society for housing the tenantsand to MHADA in terms of this agreement but shall not meanand include the free sale buildings that the developer is entitled todevelop and construct in terms of this agreement and in terms ofthe plan.”

“2.1.2 For the performance of the project, it is expressly agreedbetween the parties that:

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(xxvi) It is agreed that the license will be granted to the Developeras per the requirement of the project. After completion of thedevelopment, the beneficiaries housing societies will have to enterinto lease deed with MHADA.

(xxvii) The Developer shall abide the terms of indemnity bondregarding the responsibility and risk for implementation, executionand completion of the project and specification and quality of workto be executed which is submitted to the VP and CEO/MHADA.

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(xxxix) For the purpose of rehabilitation of the tenants andimplementing the project, MHADA hereby grants the license inthe favour of the Developer to enter upon the said land, to demolishthe existing structures, to construct and erect new structures, toallot tenements in such constructed structures to the tenants andto do all other acts as are necessary for implementation of theproject. After completion of the project by the Developer andrecovery of all the dues by MHADA, MHADA shall executeseparate lease deeds in favour of the Society and in favour of theDeveloper of free sale tenements constructed by the Developer.All the tenements both Rehab and sale will have to be allotted onownership basis.

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(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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AThe aforesaid provisions of the Joint Development Agreementwould show that, at the very least, a license is granted in favour of thedeveloper to enter upon the land to demolish existing structures, constructand erect new structures, and allot to erstwhile tenants, tenements insuch constructed structures in three categories – (1) the earlier tenants/licensees of structures that were demolished; (2) tenements to be allottedBfree of cost to MHADA; and (3) what is referred to as “free salecomponent” which the developers then sell and exploit to recover orrecoup cost and make profit. It is wholly unnecessary for us to refer toany other clauses of the Joint Development Agreement. It is also notnecessary for the purpose of this case to state as to whether an interestCin 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 itclear that it does not deal with any of the assets or legal right or beneficialinterest in such assets of the corporate debtor. For this reason, anyreference to Sections 18 and 36, as was made by the NCLT, becomesDwholly unnecessary in deciding the scope of Section 14(1)(d), whichstands on a separate footing. Under Section 14(1)(d) what is referred tois the “recovery of any property”. The ‘property’ in this case consists ofland, ad-measuring 47 acres, together with structures thereon that hadto be demolished. ‘Recovery’ would necessarily go with what was partedby the corporate debtor, and for this one has to go to the next expressionEcontained in the said sub-section.

8. One thing is clear that “owner or lessor” qua “property” is thento be read with the expression “occupied or in the possession of”. Onemanner of reading this clause is to state that whether recovery is soughtby an owner or lessor, the property should either be occupied by or be inFthe possession of the corporate debtor. The difficulty with thisinterpretation is that a “lessor” would not normally seek recovery ofproperty “occupied by” a tenant – having leased the property, a transferof property has taken place in favour of a tenant, “possession” of whichwould then have to be recovered. This is where the latin maxim reddendoGsingula singulis comes in. In an earlier judgment of this Court reportedin The Member, Board of Revenue vs. Arthur Paul Benthall [1955]2 SCR 842, this Court dealt with two different expressions used in Sections5 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 H

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-acreto X and mortgages White-acre to Y, the transactions fall underdifferent categories, and they are also distinct matters. Butif A mortgages Black-acre to X and mortgages White-acre to Y,the two transactions fall under the same category, but they wouldcertainly be distinct matters. If the intention of the legislature wasthat the expression ‘distinct matters’ in Section 5 should beunderstood not in its popular sense but narrowly as meaningdifferent categories in the Schedule, nothing would have beeneasier than to say so. When two words of different import areused in a statute in two consecutive provisions, it would be difficultto maintain that they are used in the same sense, and the conclusionmust follow that the expression “distinct matters” in Section 5and “descriptions” in Section 6 have different connotations.”

(at page 846)

(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 Statewithout the previous sanction of the President.”

The expression “no Bill or amendment” was read distributivelywith the expression “shall be introduced or moved in the Legislature of aState”, 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 earlierdecisions of the same court in George v. State of Travancore-Cochin, AIR 1954 Tra-Co 34 and State v. Philipose Philip, AIR1954 Tra-Co 257. In fact, the High Court, in the present case,expressed its decision in almost the same language as wascontained in the case of George v. State. In the second caseof State v. Philipose Philip, this aspect was not clearly discussed.The point, however, was considered in detail by a Full Bench ofthat High Court in Ulahannan Mathai v. State, AIR 1955

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Tra-Co 82. The High Court interpreted the expression “No Bill oramendment shall be introduced or moved” in the proviso asrequiring that the Bill should neither be introduced nor movedwithout the prior sanction of the President, and, since in the caseof Act 5 of 1950, the Bill was moved for consideration, withoutthe prior sanction of the President, on 23rd March, 1950, after theConstitution had come into force, there had been non-compliancewith the proviso. The court rejected the contention put forwardbefore it that what the proviso really stipulates is that no Bill “shallbe introduced” or “amendment moved” in the Legislature of aState without the previous sanction of the President. That argumentwas advanced on the basis of the maxim “reddendo singulasingulis” which, according to Black’s Interpretation of Laws,means:

“Where a sentence in a statute contains several antecedentsand several consequences, they are to be read distributively, thatis to say, each phrase or expression is to be referred to itsappropriate object.”

14. The court based its decision on the view that, if theinterpretation urged before it was accepted, it would be possibleto introduce a Bill which required no Presidential sanction, get itamended by a Select Committee in such a way as to make itrequire the Presidential sanction in case it was originally introducedin the amended form and then pass it into law, and thus escapethe necessity for the prior Presidential sanction provided by Article304 of the Constitution. It was held that there can be no doubtthat such a result could never have been intended by the makersof the Constitution. In our opinion, the High Court did not correctlyappreciate the position. The language of the proviso cannot beinterpreted in the manner accepted by the High Court withoutdoing violence to the Rules of construction. If both the words“introduced” or “moved” are held to refer to the Bill, it mustnecessarily be held that both those words will also refer to theword “amendment”. On the face of it, there can be no question ofintroducing an amendment. Amendments are moved and then, ifaccepted by the House, incorporated in the Bill before it is passed.There is further an indication in the Constitution itself that wherevera reference is made to a Bill, the only step envisaged is introductionof the Bill. There is no reference to such a step as a Bill being

moved. The articles, of which notice may be taken in thisconnection, are Articles 109, 114, 117, 198 and 207. In all thesearticles, whatever prohibition is laid down relates to the introductionof a Bill in the Legislature. There is no reference at any stage toa Bill being moved in a House. The language thus used in theConstitution clearly points to the interpretation that, even in theproviso to Article 304, the word ”introduced” refers to theBill, 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. andAnother (2003) 4 SCC 305, this Court referred to Section 22(1) of theSick Industries Companies (Special Provisions) Amendment Act, 1994and applied the aforesaid latin maxim to the words “suit” and“proceeding” as follows:

“20. There is an apparent distinction between the expressions“proceeding” and “suit” used in Section 22(1). While it is true thattwo different words may be used in the same statute to conveythe same meaning, that is the exception rather than the rule. Thegeneral rule is that when two different words are used by thesame statute, prima facie one has to construe these different wordsas carrying different meanings. In Kanhaiyalal VishindasGidwani (1993) 2 SCC 144, this Court found that the words“subscribed” and “signed” had been used in the Representationof the People Act, 1951 interchangeably and, therefore, in thatcontext the Court came to the conclusion that when the legislatureused the word “subscribed” it did not intend anything more than“signing”. The words “suit” and “proceeding” have not been usedinterchangeably in SICA. Therefore, the reasons which persuadedthis Court to give the same meaning to two different words in astatute cannot be applied here.

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26. Apart from the semantic difference between the words “suit”and “proceeding” there is the absence of expansive words “orthe like” which appear after the expression “proceedings”, afterthe word “suit”. The exclusion of such “omnibus expression” afterthe word “suit” must be given some weight in interpreting theword. As held by this Court in LIC v. Escorts Ltd. (2001) 1 SCC78: (SCC p. 313, para 63)

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“The distinction made by Parliament … in the severalprovisions of the same Act cannot be ignored or strained to beexplained away by us. That is not the way to interpret statutes.The proper way is to give due weight to the use as well as theomission to use the qualifying words in different provisions of theAct. The significance of the use of the qualifying word in oneprovision and its non-use in another provision may not bedisregarded.”

27. Since the legislature has expressly chosen to make a distinctionbetween the suits for recovery of the money and enforcement ofguarantees and proceedings for the recovery of money, that mustbe given effect to.

28. Furthermore, Parliament must be taken to be aware of thedecision in Maharashtra Tubes [Arising out of SLPs (C) Nos.21370 and 21371 of 2002] and the fact that the word “proceeding”used in Section 22(1) had been widely construed to includeproceedings for recovery of dues by the State FinancialCorporation as arrears of land revenue. The deliberate choice ofthe word “suit” in the circumstances would indicate that Parliamentintended to limit the ambit of the amendment introduced toparticular modes for the recovery of money or enforcement ofguarantees.”

11. Regard being had to the aforesaid authorities, it is clear thatwhen recovery of property is to be made by an owner under Section14(1)(d), such recovery would be of property that is “occupied by” acorporate debtor.

12. The expression “occupied” has been the subject-matter ofdecision in a number of judgments in different contexts. Thus, in IndustrialSupplies Pvt. Ltd. and Another vs. Union of India and Others(1980) 4 SCC 341, this Court was faced with the following question:

“2. The appeals raise a question of far-reaching importancenamely, whether a raising contractor of a coal mine is an ownerwithin the meaning of sub-section (1) of Section 4 of the CokingCoal Mines (Nationalisation) Act, 1972 (hereinafter referred toas the “Nationalisation Act”); and if so, whether the fixed assetslike machinery, plants, equipment and other properties installed orbrought in by such a raising contractor vest in the Central

Government. They also give rise to a subsidiary question, namely,whether subsidy receivable from the erstwhile Coal Boardestablished under Section 4 of the Coal Mines (Conservation,Safety and Development) Act, 1952 up to the specified date, froma fund known as Conservation and Safety Fund, by such raisingcontractor prior to the appointed day, can be realised by the CentralGovernment by virtue of their powers under sub-section (3) ofSection 22 of the Nationalisation Act, to the exclusion of all otherpersons including such contractor and applied under sub-section(4) of Section 22 towards the discharge of the liabilities of thecoking coal mine, which could not be discharged by the appointedday.”

In answering the aforesaid question, this Court distinguished ChiefInspector of Mines vs. Lala Karam Chand Thapar (1962) 1 SCR 9in the context of raising contracts of coal in paragraphs 18 and 19 of thejudgment; and such raising agreements by registered instruments beingheld not to amount to a lease, were held to be licenses coupled with agrant. This being the case, a raising contractor being in possession onbehalf of an owner of property, or a lessee of a mine was held to be an“occupier” within the meaning of Section 2(1) of the Mines Act, 1952.In so holding, this Court went into various dictionary meanings of theword “occupier” and “occupation” and held as follows:

“19. … These observations, if we may say so, with great respect,are rather widely stated. They are indeed susceptible of aconstruction that a raising contractor being in possession on behalfof a proprietor or the lessee of a mine in possession is not an“occupier” within the meaning of Section 3(n) of theNationalisation Act read with Section 2(1) of the Mines Act, 1952.We are quite sure that that was not the intention of the legislature.There is no reason why the word “occupier” should not beunderstood to have been used in its usual sense, according to itsplain meaning. In common parlance, an “occupier” is one who“takes” or (more usually) “holds” possession: Shorter oxforddictionary, 3rd Edn., Vol. 2, p. 1433. In the legal sense, an occupieris a person in actual occupation. The petitioners being raisingcontractors were, under the terms of the agreement dated February7, 1969 entitled to, and in fact in actual physical possession andenjoyment of the colliery and were, therefore, an occupier thereof.

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That being so, the petitioners being in possession, in their ownright, by virtue of the substantial rights acquired by them underthe agreement, were not in possession on behalf of somebodyelse and, therefore, the decision in Lala Karamchand Thaparcase [(1962) 1 SCR 9] cannot apply.”

13. Likewise, in Dunlop India Limited vs. A.A. Rahna andAnother (2011) 5 SCC 778, this Court was concerned with Section11(4)(v) of the Kerala Buildings (Lease and Rent Control) Act, 1965which was set out in paragraph 19 of the judgment as follows:

“(v) if the tenant ceases to occupy the building continuously forsix months without reasonable cause.”

Coming to the word “occupy” in the said section, this Court then held:

“21. The word “occupy” used in Section 11(4)(v) is notsynonymous with legal possession in technical sense. It meansactual possession of the tenanted building or use thereof for thepurpose for which it is let out. If the building is let out for residentialpurpose and the tenant is shown to be continuously absent fromthe building for six months, the court may presume that he hasceased to occupy the building or abandoned it. If the building is letout for business or commercial purpose, complete cessation ofthe business/commercial activity may give rise to a presumptionthat the tenant has ceased to occupy the premises. In either case,legal possession of the building by the tenant will, by itself, be notsufficient for refusing an order of eviction unless the tenant provesthat there was a reasonable cause for his having ceased to occupythe building.

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25. The Court highlighted the distinction between the terms“possession” and “occupy” in the context of rent control legislationin the following words: (Ram Dass case (2004) 3 SCC 684, SCCpp. 687-88, para 7)

“7. The terms ‘possession’ and ‘occupy’ are in commonparlance used interchangeably. However, in law, possession overa property may amount to holding it as an owner but to occupy isto keep possession of by being present in it. The rent control

legislations are the outcome of paucity of accommodations. Mostof the rent control legislations, in force in different States, expectthe tenant to occupy the tenancy premises. If he himself ceasesto occupy and parts with possession in favour of someone else, itprovides a ground for eviction. Similarly, some legislations provideit as a ground of eviction if the tenant has just ceased to occupythe tenancy premises though he may have continued to retainpossession thereof. The scheme of the Haryana Act is also toinsist on the tenant remaining in occupation of the premises.Consistently with what has been mutually agreed upon, the tenantis expected to make useful use of the property and subject thetenancy premises to any permissible and useful activity by actuallybeing there. To the landlord’s plea of the tenant having ceased tooccupy the premises it is no answer that the tenant has a right topossess the tenancy premises and he has continued in juridicalpossession thereof. The Act protects the tenants from evictionand enacts specifically the grounds on the availability whereofthe tenant may be directed to be evicted. It is for the landlord tomake out a ground for eviction. The burden of proof lies on him.However, the onus keeps shifting. Once the landlord has beenable to show that the tenancy premises were not being used forthe purpose for which they were let out and the tenant hasdiscontinued such activities in the tenancy premises as would haverequired the tenant’s actually being in the premises, the groundfor eviction is made out. The availability of a reasonable causefor ceasing to occupy the premises would obviously be within theknowledge and, at times, within the exclusive knowledge of thetenant. Once the premises have been shown by evidence to benot in occupation of the tenant, the pleading of the landlord thatsuch non-user is without reasonable cause has the effect of puttingthe tenant on notice to plead and prove the availability of reasonablecause for ceasing to occupy the tenancy premises.”

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29. In Ananthasubramania Iyer v. Sarada Amma 1978 KLT338, the learned Single Judge of the Kerala High Court held: (KLTpp. 339-40, para 3)

The physical absence of the tenant from the building formore than six months would raise a presumption that he had ceased

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to occupy the building and that he had abandoned it and that itwas for the tenant to dislodge the presumption and establish thathe had the intention to continue to occupy the tenanted premises.

30. The word “occupy” appearing in Section 11(4)(v) of the 1965Act has been interpreted by the Kerala High Court in a largenumber of cases. In Mathai Antony v. Abraham (2004) 3 KLT169, the Division Bench of the High Court referred to severaljudgments including the one of this Court in RamDass v. Davinder (2004) 3 SCC 684 and observed:

“4. … The word ‘occupy’ occurring in Section 11(4)(v)has got different meaning in different context. The meaning ofthe word ‘occupy’ in the context of Section 11(4)(v) has to beunderstood in the light of the object and purpose of the Rent ControlAct in mind. The rent control legislation is intended to giveprotection to the tenant, so that there will not be interference withthe user of the tenanted premises during the currency of thetenancy. The landlord cannot disturb the possession and enjoymentof the tenanted premises. Legislature has guardedly used theexpression ‘occupy’ in Section 11(4)(v) instead of ‘possession’.Occupy in certain context indicates mere physical presence, butin other context actual enjoyment. Occupation includes possessionas its primary element, and also includes ‘enjoyment’. The word‘occupy’ sometimes indicates legal possession in the technicalsense; at other times mere physical presence. We have to examinethe question whether mere ‘physical possession’ would satisfythe word ‘occupy’ within the meaning of Section 11(4)(v) of theAct. In our view mere physical possession of premises would notsatisfy the meaning of ‘occupation’ under Section 11(4)(v). Theword ‘possession’ means holding of such possession, animuspossidendi, which means, the intention to exclude other persons.The word ‘occupy’ has to be given a meaning so as to hold thatthe tenant is actually using the premises and not mere physicalpresence or possession. A learned Single Judge of this Courtin Abbas v. Sankaran Namboodiri (1993) 1 KLT 76 took theview that the word ‘occupation’ is used to denote the tenant’sactual physical use of the building either by himself or through hisagents or employees. The Division Bench of this Court of whichone of us is a party (Radhakrishnan, J.), in Rajagopalan v.

Gopalan (2004) 1 KLT (SN) 54 interpreting Section 11(4)(v) tookthe view that occupation in the context of Section 11(4) meansonly physical occupation, which requires further explanation.Occupation in the context of Section 11(4)(v) means actual user.If the landlord could establish that in a given case even if thetenant is in physical possession of the premises, the premises isnot being used, that is a good ground for eviction under Section11(4)(v) of the Act. Section 11(4) uses the words ‘put the landlordin possession’ and not ‘occupation’, but Section 11(4)(v) uses thewords ‘the tenant ceases to occupy’. In Section 11(4)(v) in thecase of landlord the emphasis is on ‘possession’ but in the case oftenant the emphasis is on ‘occupation’. The word ‘occupy’ has adistinct meaning so far as the Rent Act is concerned when pertainsto tenant, that is, possession with user.”

14. A Full Bench judgment of the Punjab and Haryana High Courtreported in Ude Bhan and Others vs. Kapoor Chand and OthersAIR 1967 P&H 53 (FB) is also instructive. Paragraph 1 of the judgmentspeaks of three questions referred to the Full Bench. We are directlyconcerned with question 2 which is set out by us herein below:

“(2) If any building attached to the main residential house belongingto and occupied by a non-agriculturist judgment-debtor is let outto a tenant, will that portion be considered to be in his occupationwithin the meaning of the above provision?”

In answering this question, the Full Bench went into variousauthorities and dictionaries as to what the expression “occupied” wouldmean, as follows:

“20. The other term about which considerable argument has beenaddressed to the Bench is “occupied by him” and it has evenbeen suggested that the property which is let by the owner to atenant, though not in the former’s actual occupation, is in hisconstructive occupation just as it may be said that he is possessingit though indirectly through his tenant. Reference was made tothe connotation of the term “occupied” as given at pages 83 and84 of Volume 67 of Corpus Juris Secundum.

“The term has many meanings; in legal acceptation the termimplies use and possession, and it has been said that it impliesactual possession and not constructive possession, but it also has

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been held that “occupied” does not always require an actualoccupancy, but it may sometimes permit a constructive occupancy.It is defined as meaning held in possession. “Occupied” is anappropriate word to use for the purpose of identifying land in actualpossession, and when applied to a building, implies a substantialand practical use of the building for the purpose for which it isdesigned”.

21. I do not consider that the above quotation with its manymeanings, some of them self-contradictory, is of any real help,and it is clear that the meaning of the word varies according tothe context of the statute in which it is used.

22. Mr. S.L. Puri, learned counsel for the decree-holder in theLetters Patent Appeal, in his turn referred to the meaning of theword “occupy” in the Webster’s Third New InternationalDictionary and some of the meanings as given there are, to fill upa place or extent, to take up residence, to settle in, to reside in asan owner or tenant. This indicates that the term “occupy” in relationto a house has an element of physical and actual occupation thoughnot necessarily of every cubic inch of the premises which would,of course, be impossible at any given time.

23. Reference was also made by Mr. Roop Chand to the meaningof the term “occupation” as given at page 15 of Volume 14 of theHalsbury’s Laws of England (Third Edition). It was stated that“an occupier is one who actually exercises the rights of an ownerin possession. The primary element of occupation is possession,but it includes something more, for mere legal possession cannotconstitute an occupation. The owner of a vacant house is inpossession, though not in occupation; but if he furnishes the houseand keeps it ready for habitation, he is an occupier, though he maynot have resided in it for a considerable time before the qualifyingdate”.

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26. The term “occupy” has been interpreted in numerous casesof the Punjab and other Courts in India and it would be tedious aswell as unnecessary to refer to all of them. On behalf of thejudgment-debtor reference has been made to the interpretation ofthe terms “occupation” and “occupy” in clause (3) of the Mysore

House Rent and Accommodation Control Order in RatilalBros. v. The Government of Mysore and another, AIR 1951Mysore 66 and section 11(3) of the Bihar Buildings (Lease, Rentand Eviction) Control Act, 1947, in Balmukand Khatry v. HariNarain and others, AIR 1949 Patna 31 and on behalf of thedecree-holders reliance was placed on the definition of similarterms in section 7(3) of the Madras Buildings (Lease and RentControl) Act,1946, as given in Dr. Mohammad Ibrahim v. SyedAhmed Khan and another, AIR 1950 Mad 556 and in sub-section(5) of section 15 of the East Punjab Urban Rent Restriction Act,1949, as made in Shakuntla Bawa v. Ram Parkash and others,ILR (1963) 1 Punj 827. These interpretations depend on theparticular context in which the terms occur in the relevant statutebut what has been observed in most of these cases is that theterm “occupation” is of a wider import than the term possessionand means something more than legal possession, which may beeither actual or constructive. More helpful are some cases whicharose in the Punjab under section 60(1)(c) or (ccc) of the Code.”

15. The conspectus of the aforesaid judgments would show thatthe expression “occupied by” would mean or be synonymous with beingin actual physical possession of or being actually used by, incontra-distinction to the expression “possession”, which would connotepossession being either constructive or actual and which, in turn, wouldinclude legally being in possession, though factually not being in physicalpossession. Since it is clear that the Joint Development Agreement readwith the Deed of Modification has granted a license to the developer(Corporate Debtor) to enter upon the property, with a view to do all thethings that are mentioned in it, there can be no gain saying that aftersuch entry, the property not would not be “occupied by” the developer.Indeed, this becomes clear from the termination notice dated 12.01.2018,issued by MHADA to the developer, in which it is stated:

“35. This is therefore to inform you that on the expiry of 30 daysfrom the date of receipt of this notice, the Joint DevelopmentAgreement dated 10.04.2008 and Deed of Confirmation andModification dated 03.11.2011 and Letter dated 18.01.2014 standsterminated and you will not be allowed to enter the property andyour authority/license to enter the property or remain thereuponis terminated. MHADA thereupon will not allow you to do anything AB

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332SUPREME COURT REPORTS

Aon or in relation to the property and MHADA shall take possessionof all the structures standing at whatever stage they are situatedat Goregaon (West) and bearing CTS No …”

It now remains for us to deal with some of the provisions of theMHADA Act as well as some of the judgments cited on behalf of theBrespondents. MHADA Act, as its preamble states, is an Act to unify,consolidate and amend the laws relating to housing, repairing andreconstructing dangerous buildings and carrying out improvement worksin slum areas. By Section 4 of the Act, the Authority, i.e. the MHADA,is to be a corporate body, and is deemed to be a local authority for thepurposes of the Act. By Section 5 the Rent Act, or any correspondingClaws are not to apply. By Section 66, the Competent Authority is givenpower to evict persons from premises under certain circumstances.Sections 76 and 79, on which great reliance was placed by Mr. Dave,are set out herein below:

“76. Duties relating to repairs and reconstruction ofDdilapidated buildings. Subject to the provisions of this Chapter,it shall be the duty of the Board –

(a) to undertake and carry out structural repairs to buildings, insuch order of priority as the Board, having regard to the exigenciesof the case and availability of resources, considers necessary,Ewithout recovering any expenses thereof from the owners oroccupiers of such buildings; (b) to provide temporary or alternative accommodation to theoccupiers of any such building, when repairs thereto areundertaken, or a building collapses; F

(c) to undertake, from time to time, the work of ordinary andtenantable repairs in respect of all premises placed at the disposalof the Board; (d) to move the State Government to acquire old and dilapidatedbuildings and which are, in the opinion of the Board, beyond repairs;Gand to reconstruct or to get reconstructed new buildings thereonfor the purpose of housingas many occupiers of those propertiesas possible, and for providing alternative accommodation to otheraffected occupiers;

79. Power of Board to undertake building repairs, buildingreconstruction and occupiers housing and rehabilitationschemes.

(1) The Authority may, on such terms and conditions as it maythink fit to impose, entrust to the Board the framing and executionof schemes for building repairs or for reconstruction of buildingsor for housing and rehabilitation of, dishoused occupiers, whetherprovided by this Act or not, and the Board shall thereupon undertakethe framing and execution of such schemes as if it had beenprovided for by this Act.

(2) The Board may, on such terms and conditions as may be agreedupon and with the previous approval of the Authority- (a) hand over the execution under its own supervision of anybuilding repairs scheme, building reconstruction scheme, ordishoused occupier’s housing scheme to a Municipal Corporationor to a co-operative society or to any other agency recognized forthe purpose by the Board, as it may deem necessary, and (b) transfer by sale, exchange or otherwise in any mannerwhatsoever any new building constructed on any land acquiredunder this Chapter to any co-operative society, if it is formed byall the occupiers, or to apartment owners for the purposes of theMaharashtra Apartment Ownership Act, 1970 (the apartmentowners being all such occupiers).”

16. There is no doubt whatsoever that important functions relatingto repairs and re-construction of dilapidated buildings are given toMHADA. 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 ofany housing scheme under its own supervision. However, when it comesto any clash between the MHADA Act and the Insolvency Code, on theplain 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 bySection 14 of the Code, the idea is that, to alleviate corporate sickness, astatutory status quo is pronounced under Section 14 the moment a petitionis admitted under Section 7 of the Code, so that the insolvency resolutionprocess may proceed unhindered by any of the obstacles that wouldotherwise be caused and that are dealt with by Section 14. The statutory A

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Afreeze 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) ofthe Code, to the date of admission of an insolvency petition up to thedate that the Adjudicating Authority either allows a resolution plan tocome into effect or states that the corporate debtor must go into theliquidation. For this temporary period, at least, all the things referred toBunder Section 14 must be strictly observed so that the corporate debtormay finally be put back on its feet albeit with a new management.

17. My learned brother S. Ravindra Bhat, J.’s judgment inMunicipal Corporation of Greater Mumbai (supra), which has beenstrongly relied upon by Mr. Dave and Mr. Patil, dealt with an entirelyCdifferent fact situation, as is clear from paragraphs 32 and 33 of the saidjudgment, which are set out herein below:

“32. A cumulative reading of the stipulations reveals that thecontract/agreement contemplates that the lease deed was to beexecuted after the completion of the project. The contract revealsDthat (a) the project period was for 60 months starting from thedate excluding the monsoon period; (b) by Clauses 5 and 17,SevenHills could mortgage the property for securing advancesfrom financial institutions for the construction of the project andthereafter towards its working. Such mortgage/charge or interestEwas subject to approval by MCGM. In the event the contractwas to be terminated, it was agreed that MCGM would not in anymanner be liable towards the mortgaged amount and all its rightsand ownership would continue to vest in it free from encumbrances(Clause 17).

F33. The show cause notice in this case preceded admission of theinsolvency resolution process. In view of the clear conditionsstipulated in the contract, MCGM reserved all its rights and itsproperties could not have therefore, in any manner, been affectedby the resolution plan. Equally in the opinion of this Court, theadjudicating authority could not have approved the plan whichGimplicates the assets of MCGM especially when Seven Hills hadnot fulfilled its obligations under the contract.”

18. The matter had come to this Court after the AdjudicatingAuthority had approved of a certain resolution plan, unlike in the facts ofthe present case, and what was clear, on the facts of that case, was thatH

a show cause notice of the Municipal Corporation, which precededadmission of the insolvency resolution process, made it clear that assetsof MCGM could not possibly be subsumed within a resolution plan withoutits approval/permission. It was in this context that this Court, in para 47of the said judgment, stated that Section 238 of the Code cannot be readas overriding the MCGM’s right - indeed its public duty - to control andregulate how its propertiesare to be dealt with. “Properties” was referredto in this judgment as referring to assets of the corporate debtor. Wehave seen how, in the facts of this case, we are not concerned with theassets of the corporate debtor, least of all the assets of MHADA. Thelimited question before us is as to whether Section 14(1)(d) of the Codewill apply to statutorily freeze ‘occupation’ that may have been handedover under a Joint Development Agreement.

19. Likewise, the recent judgment Sushil Kumar Agarwal (supra)deals with specific performance and whether a Development Agreementmay be specifically performed. The ratio of that judgment appears to bethat where Development Agreements create an interest in property, theymay be specifically performed, but not otherwise. As we have pointedout herein above, it is clear that Section 14(1)(d) of the Insolvency &Bankruptcy Code, when it speaks about recovery of property “occupied”,does not refer to rights or interests created in property but only actualphysical occupation of the property. For this reason also, this judgment iswholly distinguishable.

20. Regard being had to the above, we allow the appeal and setaside the impugned order of the NCLAT. Considering that this matterhas been pending for some time, we direct the NCLT to dispose of theresolution professional’s application (I.A. No.21433/2018) within a periodof six weeks from today.

Ankit Gyan

Appeal allowed.

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