Mr. Rajendra K. Bhutta vs Maharashtra Housing And Area … on 19 February, 2020

Supreme Court of India

Mr. Rajendra K. Bhutta vs Maharashtra Housing And Area … on 19 February, 2020

Author: Rohinton Fali Nariman

Bench: Rohinton Fali Nariman, S. Ravindra Bhat, V. Ramasubramanian


                                         IN THE SUPREME COURT OF INDIA
                                         CIVIL APPELLATE JURISDICTION
                                         CIVIL APPEAL NO. 12248 OF 2018

                      RAJENDRA K. BHUTTA                                         …Appellant


                      MAHARASHTRA HOUSING AND
                      AREA DEVELOPMENT AUTHORITY
                      AND ANOTHER                                             …Respondent(s)


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
Signature Not Verified

Digitally signed by
Siddharth Nagar Sahakar Griha Nirman Sanstha Limited (a
Date: 2020.02.26
11:26:33 IST

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.

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

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 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 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:

“3. Definitions. In this Code, unless the context
otherwise requires,—

xxx xxx xxx

(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,

(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

(b) transferring, encumbering, alienating or
disposing of by the corporate debtor any of its
assets or any legal right or beneficial interest

(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

(a) such transaction as may be notified by the
Central Government in consultation with any
financial regulator;

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


(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


“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

(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

(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 sub-section (2) of
section 30, it shall by order approve the resolution
plan which shall be binding on the corporate debtor
and its 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

(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:—

(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

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

(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

(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

(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


“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.

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

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.”

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 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
(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


“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 Travancore-Cochin, 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 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,

“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

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 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

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. There is an apparent distinction between the
expressions “proceeding” and “suit” used in Section
22(1). While it is true that two different words may
be used in the same statute to convey the same
meaning, that is the exception rather than the rule.
The general rule is that when two different words are
used by the same statute, prima facie one has to
construe these different words as carrying different
meanings. In Kanhaiyalal Vishindas Gidwani (1993)
2 SCC 144, this Court found that the words
“subscribed” and “signed” had been used in the
Representation of the People Act, 1951
interchangeably and, therefore, in that context the
Court came to the conclusion that when the
legislature used the word “subscribed” it did not
intend anything more than “signing”. The words
“suit” and “proceeding” have not been used
interchangeably in SICA. Therefore, the reasons
which persuaded this Court to give the same
meaning to two different words in a statute cannot
be applied here.

xxx xxx xxx


26. Apart from the semantic difference between the
words “suit” and “proceeding” there is the absence
of expansive words “or the like” which appear after
the expression “proceedings”, after the word “suit”.
The exclusion of such “omnibus expression” after
the word “suit” must be given some weight in
interpreting the word. As held by this Court
in LIC v. Escorts Ltd. (2001) 1 SCC 78: (SCC p. 313,
para 63)

“The distinction made by Parliament … in the
several provisions of the same Act cannot be
ignored or strained to be explained 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 the
omission to use the qualifying words in different
provisions of the Act. The significance of the use of
the qualifying word in one provision and its non-use
in another provision may not be disregarded.”

27. Since the legislature has expressly chosen to
make a distinction between the suits for recovery of
the money and enforcement of guarantees and
proceedings for the recovery of money, that must be
given effect to.

28. Furthermore, Parliament must be taken to be
aware of the decision in Maharashtra Tubes [Arising
out of SLPs (C) Nos. 21370 and 21371 of 2002] and
the fact that the word “proceeding” used in Section
had been widely construed to include
proceedings for recovery of dues by the State
Financial Corporation as arrears of land revenue.
The deliberate choice of the word “suit” in the
circumstances would indicate that Parliament
intended to limit the ambit of the amendment
introduced to particular modes for the recovery of
money or enforcement of guarantees.”

11. Regard being had to the aforesaid authorities, it is clear that

when recovery of property is to be made by an owner under Section

14(1)(d), such recovery would be of property that is “occupied by” a

corporate debtor.

12. The expression “occupied” has been the subject-matter of

decision in a number of judgments in different contexts. Thus, in

Industrial Supplies Pvt. Ltd. and Another vs. Union of India and

Others (1980) 4 SCC 341, this Court was faced with the following


“2. The appeals raise a question of far-reaching
importance namely, whether a raising contractor of a
coal mine is an owner within the meaning of sub-
section (1) of Section 4 of the Coking Coal Mines
(Nationalisation) Act, 1972 (hereinafter referred to as
the “Nationalisation Act”); and if so, whether the
fixed assets like machinery, plants, equipment and
other properties installed or brought 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
Board established under Section 4 of the Coal
Mines (Conservation, Safety and Development) Act,
1952 up to the specified date, from a fund known as
Conservation and Safety Fund, by such raising
contractor prior to the appointed day, can be
realised by the Central Government by virtue of their
powers under sub-section (3) of Section 22 of the
Nationalisation Act, to the exclusion of all other
persons including such contractor and applied under
sub-section (4) of Section 22 towards the discharge
of the liabilities of the coking coal mine, which could
not be discharged by the appointed day.”

In answering the aforesaid question, this Court distinguished Chief

Inspector of Mines vs. Lala Karam Chand Thapar (1962) 1 SCR

9 in the context of raising contracts of coal in paragraphs 18 and 19

of the judgment; and such raising agreements by registered

instruments being held not to amount to a lease, were held to be

licenses coupled with a grant. This being the case, a raising

contractor being in possession on behalf 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 the word “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 a construction that a raising
contractor being in possession on behalf of a
proprietor or the lessee of a mine in possession is
not an “occupier” within the meaning of Section 3(n)
of the Nationalisation 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 be
understood to have been used in its usual sense,
according to its plain meaning. In common parlance,
an “occupier” is one who “takes” or (more usually)
“holds” possession: Shorter oxford dictionary, 3rd
Edn., Vol. 2, p. 1433. In the legal sense, an occupier
is a person in actual occupation. The petitioners
being raising contractors were, under the terms of
the agreement dated February 7, 1969 entitled to,
and in fact in actual physical possession and
enjoyment of the colliery and were, therefore, an
occupier thereof. That being so, the petitioners
being in possession, in their own right, by virtue of
the substantial rights acquired by them under the
agreement, were not in possession on behalf of
somebody else and, therefore, the decision in Lala
Karamchand Thapar case [(1962) 1 SCR 9] cannot

13. Likewise, in Dunlop India Limited vs. A.A. Rahna and

Another (2011) 5 SCC 778, this Court was concerned with Section

11(4)(v) of the Kerala Buildings (Lease and Rent Control) Act, 1965

which was set out in paragraph 19 of the judgment as follows:

“(v) if the tenant ceases to occupy the building
continuously for six months without reasonable

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


“21. The word “occupy” used in Section 11(4)(v) is
not synonymous with legal possession in technical
sense. It means actual possession of the tenanted
building or use thereof for the purpose for which it is
let out. If the building is let out for residential
purpose and the tenant is shown to be continuously
absent from the building for six months, the court
may presume that he has ceased to occupy the
building or abandoned it. If the building is let out for
business or commercial purpose, complete
cessation of the business/commercial activity may
give rise to a presumption that the tenant has
ceased to occupy the premises. In either case, legal
possession of the building by the tenant will, by
itself, be not sufficient for refusing an order of
eviction unless the tenant proves that there was a
reasonable cause for his having ceased to occupy
the building.

xxx xxx xxx

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

88, para 7)

“7. The terms ‘possession’ and ‘occupy’ are in
common parlance used interchangeably. However,
in law, possession over a property may amount to
holding it as an owner but to occupy is to keep
possession of by being present in it. The rent control
legislations are the outcome of paucity of

accommodations. Most of the rent control
legislations, in force in different States, expect the
tenant to occupy the tenancy premises. If he himself
ceases to occupy and parts with possession in
favour of someone else, it provides a ground for
eviction. Similarly, some legislations provide it as a
ground of eviction if the tenant has just ceased to
occupy the tenancy premises though he may have
continued to retain possession thereof. The scheme
of the Haryana Act is also to insist on the tenant
remaining in occupation of the premises.

Consistently with what has been mutually agreed
upon, the tenant is expected to make useful use of
the property and subject the tenancy premises to
any permissible and useful activity by actually being
there. To the landlord’s plea of the tenant having
ceased to occupy the premises it is no answer that
the tenant has a right to possess the tenancy
premises and he has continued in juridical
possession thereof. The Act protects the tenants
from eviction and enacts specifically the grounds on
the availability whereof the tenant may be directed
to be evicted. It is for the landlord to make out a
ground for eviction. The burden of proof lies on him.
However, the onus keeps shifting. Once the landlord
has been able to show that the tenancy premises
were not being used for the purpose for which they
were let out and the tenant has discontinued such
activities in the tenancy premises as would have
required the tenant’s actually being in the premises,
the ground for eviction is made out. The availability
of a reasonable cause for ceasing to occupy the
premises would obviously be within the knowledge
and, at times, within the exclusive knowledge of the
tenant. Once the premises have been shown by
evidence to be not in occupation of the tenant, the
pleading of the landlord that such non-user is
without reasonable cause has the effect of putting
the tenant on notice to plead and prove the
availability of reasonable cause for ceasing to
occupy the tenancy premises.”

xxx xxx xxx

29. In Ananthasubramania Iyer v. Sarada Amma

1978 KLT 338, the learned Single Judge of the
Kerala High Court held: (KLT pp. 339-40, para 3)

The physical absence of the tenant from the
building for more than six months would raise a
presumption that he had ceased to occupy the
building and that he had abandoned it and that it
was for the tenant to dislodge the presumption and
establish that he had the intention to continue to
occupy the tenanted premises.

30. The word “occupy” appearing in Section 11(4)(v)
of the 1965 Act has been interpreted by the Kerala
High Court in a large number of cases. In Mathai
Antony v. Abraham
(2004) 3 KLT 169, the Division
Bench of the High Court referred to several
judgments including the one of this Court in Ram
Dass v. Davinder
(2004) 3 SCC 684 and observed:

“4. … The word ‘occupy’ occurring in Section
has got different meaning in different
context. The meaning of the word ‘occupy’ in the
context of Section 11(4)(v) has to be understood in
the light of the object and purpose of the Rent
Control Act in mind. The rent control legislation is
intended to give protection to the tenant, so that
there will not be interference with the user of the
tenanted premises during the currency of the
tenancy. The landlord cannot disturb the possession
and enjoyment of the tenanted premises. Legislature
has guardedly used the expression ‘occupy’ in
Section 11(4)(v) instead of ‘possession’. Occupy in
certain context indicates mere physical presence,
but in other context actual enjoyment. Occupation
includes possession as its primary element, and
also includes ‘enjoyment’. The word ‘occupy’
sometimes indicates legal possession in the
technical sense; at other times mere physical
presence. We have to examine the question
whether mere ‘physical possession’ would satisfy
the word ‘occupy’ within the meaning of Section
of the Act. In our view mere physical
possession of premises would not satisfy the
meaning of ‘occupation’ under Section 11(4)(v). The
word ‘possession’ means holding of such

possession, animus possidendi, which means, the
intention to exclude other persons. The word
‘occupy’ has to be given a meaning so as to hold
that the tenant is actually using the premises and
not mere physical presence or possession. A
learned Single Judge of this Court
in Abbas v. Sankaran Namboodiri (1993) 1 KLT 76
took the view that the word ‘occupation’ is used to
denote the tenant’s actual physical use of the
building either by himself or through his agents or
employees. The Division Bench of this Court of
which one of us is a party (Radhakrishnan, J.),
in Rajagopalan v. Gopalan (2004) 1 KLT (SN) 54
interpreting Section 11(4)(v) took the view that
occupation in the context of Section 11(4) means
only physical occupation, which requires further
explanation. Occupation in the context of Section
means actual user. If the landlord could
establish that in a given case even if the tenant is in
physical possession of the premises, the premises is
not being used, that is a good ground for eviction
under Section 11(4)(v) of the Act. Section 11(4) uses
the words ‘put the landlord in possession’ and not
‘occupation’, but Section 11(4)(v) uses the words
‘the tenant ceases to occupy’. In Section 11(4)(v) in
the case of landlord the emphasis is on ‘possession’
but in the case of tenant the emphasis is on
‘occupation’. The word ‘occupy’ has a distinct
meaning so far as the Rent Act is concerned when
pertains to tenant, that is, possession with user.”

14. A Full Bench judgment of the Punjab and Haryana High Court

reported in Ude Bhan and Others vs. Kapoor Chand and Others

AIR 1967 P&H 53 (FB) is also instructive. Paragraph 1 of the

judgment speaks of three questions referred to the Full Bench. We

are directly concerned with question 2 which is set out by us herein


“(2) If any building attached to the main residential
house belonging to and occupied by a non-


agriculturist judgment-debtor is let out to a tenant,
will that portion be considered to be in his
occupation within the meaning of the above

In answering this question, the Full Bench went into various

authorities and dictionaries as to what the expression “occupied”

would mean, as follows:

“20. The other term about which considerable
argument has been addressed to the Bench is
“occupied by him” and it has even been suggested
that the property which is let by the owner to a
tenant, though not in the former’s actual occupation,
is in his constructive occupation just as it may be
said that he is possessing it though indirectly
through his tenant. Reference was made to the
connotation of the term “occupied” as given at pages
83 and 84 of Volume 67 of Corpus Juris Secundum.

“The term has many meanings; in legal
acceptation the term implies use and possession,
and it has been said that it implies actual possession
and not constructive possession, but it also has
been held that “occupied” does not always require
an actual occupancy, but it may sometimes permit a
constructive occupancy. It is defined as meaning
held in possession. “Occupied” is an appropriate
word to use for the purpose of identifying land in
actual possession, and when applied to a building,
implies a substantial and practical use of the
building for the purpose for which it is designed”.

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

22. Mr. S.L. Puri, learned counsel for the decree-

holder in the Letters Patent Appeal, in his turn
referred to the meaning of the word “occupy” in the
Webster’s Third New International Dictionary and

some of the meanings as given there are, to fill up a
place or extent, to take up residence, to settle in, to
reside in as an owner or tenant. This indicates that
the term “occupy” in relation to a house has an
element of physical and actual occupation though
not necessarily of every cubic inch of the premises
which would, of course, be impossible at any given

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

xxx xxx xxx

26. The term “occupy” has been interpreted in
numerous cases of the Punjab and other Courts in
India and it would be tedious as well as unnecessary
to refer to all of them. On behalf of the judgment-
debtor reference has been made to the
interpretation of the terms “occupation” and “occupy”
in clause (3) of the Mysore House Rent and
Accommodation Control Order in Ratilal
Bros. v. The Government of Mysore and another,
AIR 1951 Mysore 66 and section 11(3) of the Bihar
Buildings (Lease, Rent and Eviction) Control Act,
1947, in Balmukand Khatry v. Hari Narain and
others, AIR 1949 Patna 31 and on behalf of the
decree-holders reliance was placed on the definition
of similar terms in section 7(3) of the Madras
Buildings (Lease and Rent Control) Act,1946, as
given in Dr.Mohammad Ibrahim v. Syed Ahmed
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 the particular
context in which the terms occur in the relevant
statute but what has been observed in most of these
cases is that the term “occupation” is of a wider
import than the term possession and means
something more than legal possession, which may
be either actual or constructive. More helpful are
some cases which arose in the Punjab under
section 60(1)(c) or (ccc) of the Code.”

15. The conspectus of the aforesaid 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

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 days from the date of receipt of this notice, the
Joint Development Agreement dated 10.04.2008

and Deed of Confirmation and Modification dated
03.11.2011 and Letter dated 18.01.2014 stands
terminated and you will not be allowed to enter the
property and your authority/license to enter the
property or remain thereupon is terminated. MHADA
thereupon will not allow you to do anything on or in
relation to the property and MHADA shall take
possession of all the structures standing at whatever
stage they are situated at Goregaon (West) and
bearing CTS No …”

It now remains for us to deal with some of the provisions of the

MHADA Act as well as some of the judgments cited on behalf of the

respondents. MHADA Act, as its preamble states, is an Act to unify,

consolidate and amend the laws relating to housing, repairing and

reconstructing dangerous buildings and carrying out improvement

works in 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 the purposes of the Act. By Section 5 the Rent Act, or

any corresponding laws are not to apply. By Section 66, the

Competent Authority is given power 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 of dilapidated 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, in such order of priority as the Board,
having regard to the exigencies of the case and
availability of resources, considers necessary,
without recovering any expenses thereof from the

owners or occupiers of such buildings;

(b) to provide temporary or alternative
accommodation to the occupiers of any such
building, when repairs thereto are undertaken, or a
building collapses;

(c) to undertake, from time to time, the work of
ordinary and tenantable repairs in respect of all
premises placed at the disposal of the Board;

(d) to move the State Government to acquire old
and dilapidated buildings and which are, in the
opinion of the Board, beyond repairs; and to
reconstruct or to get reconstructed new buildings
thereon for the purpose of housing as many
occupiers of those properties as possible, and for
providing alternative accommodation to other
affected occupiers;

79. Power of Board to undertake building
repairs, building reconstruction and occupiers
housing and rehabilitation schemes.

(1) The Authority may, on such terms and conditions
as it may think fit to impose, entrust to the Board the
framing and execution of schemes for building
repairs or for reconstruction of buildings or for
housing and rehabilitation of, dishoused occupiers,
whether provided by this Act or not, and the Board
shall thereupon undertake the framing and
execution of such schemes as if it had been
provided for by this Act.

(2) The Board may, on such terms and conditions as
may be agreed upon and with the previous approval
of the Authority-

(a) hand over the execution under its own
supervision of any building repairs scheme,
building reconstruction scheme, or dishoused
occupier’s housing scheme to a Municipal
Corporation or to a co-operative society or to any
other agency recognized for the purpose by the
Board, as it may deem necessary, and

(b) transfer by sale, exchange or otherwise in any
manner whatsoever any new building constructed
on any land acquired under this Chapter to any co-
operative society, if it is formed by all the occupiers,
or to apartment owners for the purposes of the
Maharashtra Apartment Ownership Act, 1970 (the

apartment owners being all such occupiers).”

16. 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

MHADA Act 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 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 the 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.

17. My learned brother S. Ravindra Bhat, J.’s judgment in

Municipal Corporation of Greater Mumbai (supra), which has

been strongly relied upon by Mr. Dave and Mr. Patil, dealt with an

entirely different fact situation, as is clear from paragraphs 32 and

33 of the said judgment, which are set out herein below:

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

33. The show cause notice in this case preceded
admission of the insolvency resolution process. In
view of the clear conditions stipulated in the
contract, MCGM reserved all its rights and its
properties could not have therefore, in any manner,
been affected by the resolution plan. Equally in the
opinion of this Court, the adjudicating authority could
not have approved the plan which implicates the
assets of MCGM especially when SevenHills had
not fulfilled its obligations under the contract.”


18. The matter had come to this Court after the Adjudicating

Authority had approved of a certain resolution plan, unlike in the

facts of the present case, and what was clear, on the facts of that

case, was that a show cause notice of the Municipal Corporation,

which preceded admission of the insolvency resolution process,

made it clear that assets of MCGM could not possibly be subsumed

within a resolution plan without its approval/permission. It was in this

context that this Court, in para 47 of the said judgment, stated that

Section 238 of the Code cannot be read as overriding the MCGM’s

right – indeed its public duty – to control and regulate how its

properties are to be dealt with. “Properties” was referred to in this

judgment as referring to assets of the corporate debtor. We have

seen how, in the facts of this case, we are not concerned with the

assets of the corporate debtor, least of all the assets of MHADA.

The limited question before us is as to whether Section 14(1)(d) of

the Code will apply to statutorily freeze ‘occupation’ that may have

been handed over under a Joint Development Agreement.

19. Likewise, the recent judgment Sushil Kumar Agarwal

(supra) deals with specific performance and whether a Development

Agreement may be specifically performed. The ratio of that judgment

appears to be that where Development Agreements create an

interest in property, they may be specifically performed, but not

otherwise. As we have pointed out 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 actual physical

occupation of the property. For this reason also, this judgment is

wholly distinguishable.

20. Regard being had to the above, we allow the appeal and set

aside the impugned order of the NCLAT. Considering that this matter

has been pending for some time, we direct the NCLT to dispose of

the resolution professional’s application (I.A. No.21433/2018) within

a period of six weeks from today.


(R. F. Nariman)


(S. Ravindra Bhat)


(V. Ramasubramanian)
New Delhi.

19th February, 2020.


Source link