RAJENDRA K. BHUTTA Vs. MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY
LAWS(SC)-2020-2-112
SUPREME COURT OF INDIA
Decided on February 19,2020

Rajendra K. Bhutta Appellant
VERSUS
MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY Respondents


Referred Judgements :-

SHAKUNTLA BAWA V. RAM PARKASH AND OTHERS [REFERRED TO]
RATILAL BROS. VS. THE GOVERNMENT OF MYSORE AND ANOTHER [REFERRED TO]
GEORGE VS. STATE OF TRAVANCORE-COCHIN [REFERRED TO]
STATE V. PHILIPOSE PHILIP [REFERRED TO]
ULAHANNAN MATHAI VS. STATE [REFERRED TO]
MEMBER BOARD OF REVENUE VS. ARTHUR PAUL BENTHALL [REFERRED TO]
CHIEF INSPECTOR OF MINES VS. KARAM CHAND THAPAR [REFERRED TO]
KOTESWAR VITTAL KAMATH VS. K RANGAPPA BALIGA AND CO [REFERRED TO]
INDUSTRIAL SUPPLIES PVT LIMITED UNION OF INDIA VS. UNION OF INDIA [REFERRED TO]
KANHAIYALAL VISHINDAS GIDWANI VS. ARUN DATTATRAYA MEHATA [REFERRED TO]
KAILASH NATH AGARWAL VS. PRADESHIYA INDUSTRIES AND INVESTIGATION CORPORATION OF UTTAR PRADESH [REFERRED TO]
RAM DASS VS. DAVINDER [REFERRED TO]
DUNLOP INDIA LIMITED VS. A A RAHNA [REFERRED TO]
MOHAMMAD IBRAHIM VS. SYED AHMED KHAN [REFERRED TO]
ANANTHASUBRAMANIA IYER VS. SARADA AMMA [REFERRED TO]
ABBAS VS. SANKARAN NAMBOODIRI [REFERRED TO]
MATHAI ANTONY VS. ABRAHAM [REFERRED TO]
UDE BHAN VS. KAPOOR CHAND [REFERRED TO]
BALMAKUND KHATRY VS. HARI NARAIN [REFERRED TO]
SUSHIL KUMAR AGARWAL VS. MEENAKSHI SADHU & ORS [REFERRED TO]



Cited Judgements :-

A.A.KUMARAN VS. SUPERINTENDENT OF POLICE [LAWS(KER)-2022-5-22] [REFERRED TO]
CENTURY PLYBOARDS (I) LIMITED VS. UNION OF INDIA [LAWS(GAU)-2022-4-12] [REFERRED TO]
KUMARAN A.A. VS. SUPERINTENDENT OF POLICE, THRISSIR [LAWS(KER)-2022-5-47] [REFERRED TO]
RAJIV SANGHVI VS. PRADIP R. KAMDAR [LAWS(BOM)-2022-6-144] [REFERRED TO]


JUDGEMENT

R.F.NARIMAN,J. - (1.)This appeal raises a question as to the correct interpretation of Section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'the Code'). The facts necessary to appreciate the setting in which this question arises are as follows:
i. On 01.11.2007, a Resolution bearing No.6280 was passed by the Maharashtra Housing and Area Development Authority (hereinafter referred to as 'the MHADA') to execute a joint development agreement with the Corporate Debtor, i.e. Guru Ashish Construction Private Limited, and Goregaon Siddharth Nagar Sahakar Griha Nirman Sanstha Limited (a Society for persons who are displaced and who are to be rehoused 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) v. Abhilash Lal and 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.
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