REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 12248 OF 2018

RAJENDRA K. BHUTTA …Appellant

Versus

MAHARASHTRA HOUSING AND

AREA DEVELOPMENT AUTHORITY

AND ANOTHER …Respondent(s)

J U D G M E N T

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 re-

housed in the project for joint development of land, ad-

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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

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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,

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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

4

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

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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

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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-

7

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

8

(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,

namely:—

(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

authority;

(b) transferring, encumbering, alienating or

disposing of by the corporate debtor any of its

assets or any legal right or beneficial interest

therein;

(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

to—

(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

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debtor.

(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

hereunder:

“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

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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

country;

(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

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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

(1),-

(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.”

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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

fund;

(iv) other contractual arrangements which do not

stipulate transfer of title but only use of the assets;

and

(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

transactions;

(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

Chapter;

(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.”

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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

follows:

“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

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executed which is submitted to the VP and

CEO/MHADA.

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

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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

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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

connotations.”

(at page 846)

17

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 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

18

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,

means:

“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

object.”

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

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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

amendment.”

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

20

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

22(1) 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

21

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

question:

“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

22

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

apply.”

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

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

23

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

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

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

24

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

25

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

11(4)(v) 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

11(4)(v) 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

26

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

11(4)(v) 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

below:

“(2) If any building attached to the main residential

house belonging to and occupied by a non-

27

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

provision?”

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

28

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

time.

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-

29

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

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 days from the date of receipt of this notice, the

Joint Development Agreement dated 10.04.2008

30

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

31

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

32

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.

33

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.”

34

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

35

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.

…………………..………………J.

(R. F. Nariman)

……………..……………………J.

(S. Ravindra Bhat)

……………..……………………J.

(V. Ramasubramanian)

New Delhi.

19

th

February, 2020.

36