Bank of India Vs Ketan Parekh

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2008 [Arising out of S.L.P.(C) No.7744 of 2006]

Bank of India Appellant

Versus

Ketan Parekh & Ors. Respondents

J U D G M E N T A.K. MATHUR, J.

1. Leave granted.

2. This appeal is directed against the order dated

17.1.2006 passed by the Division Bench of the Bombay High

Court whereby the Division Bench has held that since the

property of the respondent No.1 has been seized under the

Special Courts( Trial of Offences Relating to Transactions

in Securities) Act,1992 (hereinafter to be referred to as

the Act of 1992), the Debts Recovery Tribunal had no

jurisdiction to grant a declaration that the properties of

1

a notified person stand charged and the certificate against

such properties cannot be executed by the Recovery Officer

under the Recovery of Debts Due to Banks and Financial

Institutions Act, 1993 (hereinafter to be referred to as

the Act of 1993) and the financial institution would have

to move the Special Court in respect of the property

attached.

3. Brief facts which are necessary for disposal of

this appeal are that the respondent No.1 was declared as a

notified party on 6.10.2001. Pursuant to the said

notification, considering section 3(3) of the Act of 1992,

all properties, movable and immovable stood attached

simultaneously. The Custodian confirmed the attachment on

1.11.2001. The respondent No.2 – Oriental Bank of Commerce

(hereinafter to be referred to as the Bank) filed an

application being Original Application No.233 of 2002

against the respondent No.1. The respondent No.1 took out

Miscellaneous Application for impleading the Custodian as a

party. That application came to be rejected by order dated

16.3.2005. Aggrieved against the said order the respondent

No.1 preferred an appeal before the Debts Recovery

Appellate Tribunal (hereinafter to be referred to as the

Appellate Tribunal). That appeal came to be rejected by

order dated 19.8.2005.Against the order passed by the

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Appellate Tribunal, a writ petition was filed before the

High Court. It was contended by the respondent No.1

before the Debts Recovery Tribunal that the custodian under

the Act of 1992 had to be joined as necessary party as the

respondent No.1 had been declared as a notified party under

the said Act. This was opposed by the Bank on the ground

that the defendant No.2 has been sued merely as a guarantor

and therefore, the provisions of the Act of 1992 were not

attracted. It was submitted that Section 9A of the Act of

1992 would be attracted. This was opposed by the Bank on

the ground that the provisions of Section 9A of the Act of

1992 were not attracted as the respondent No.1 was being

sued in his personal capacity as guarantor and not as a

mortgagor or pledger of the movable or immovable

properties. The D.R.T. accepted the objection and rejected

the petition of respondent No.1. Aggrieved against this

order the matter was taken up before the Appellate Tribunal

on the basis that the property of the respondent No.1 stood

attached by the Custodian under the Act of 1992.

Therefore, the Debts Recovery Tribunal had no jurisdiction

to deal with the matter. The Appellate Tribunal held that

the provisions of the Act of 1992 are not attracted and

consequently, dismissed the appeal. Aggrieved against this

order the present writ petition was filed before the Bombay

High Court by respondent No.1. The Division Bench of the

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Bombay High Court held that since the respondent No.1 was

declared as a notified party all the properties stood

attached pursuant to section 3 of the Act of 1992 and

considering Section 9A of the said Act, it is the Special

Court which will have jurisdiction so far as the notified

party is concerned and as such the Division Bench of the

High Court reversed the order passed by the Appellate

Tribunal and held that the Special Court will have

jurisdiction and not the Appellate Tribunal. Hence, the

present appeal against the order passed by the Division

Bench of the High Court of Bombay dated 17.1.2006.

4. Mr.K.N.Bhatt, learned senior counsel appearing for

the appellant strenuously urged before us that since the

Act of 1993 is a subsequent legislation which came into

force in 1993 will override the Act of 1992 which came in

1992. It was contended that the decree passed by the Debts

Recovery Tribunal will prevail over the property attached

under the provisions of the Act of 1992. Therefore, the

short question for our consideration is whether the Act of

1992 will prevail or the Act of 1993. In order to better

appreciate the controversy involved in the matter we may

refer to necessary provisions of both the Acts. The Special

Courts (Trial of Offences Relating to Transactions in

Securities) Act, 1992 came into force in 1992. Section 3

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deals with the appointment and functions of the Custodian.

Section 3 reads as under :

“3. Appointment and functions of Custodian.- (1) The Central Government may appoint one or more Custodian as it may deem fit for the purpose of this Act.

(2) The Custodian may, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the 1st day of April, 1991 and on and before 7th June, 1992, notify the name of such person in the Official Gazette.

(3) Notwithstanding anything contained in the Code and any other law for the time being in force, on and from the date of notification under sub- section (2), any property, movable or immovable, or both, belonging to any person notified under that sub-section shall stand attached simultaneously with the issue of the notification.

(4) The property attached under sub-section (3) shall be dealt with by the Custodian in such manner as the Special Court may direct.

(5) The Custodian may take assistance of any person while exercising his powers or for discharging his duties under this section and Sec.4.”

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Section 4 deals with the contracts entered into

fraudulently may be cancelled. Section 5 deals with the

establishment of Special Court. Section 6 deals with the

cognizance of cases by Special Court. Section 7 deals with

the jurisdiction of Special Court which is relevant for

our purpose and it reads as under:

“ 7. Jurisdiction of Special Court.- Notwithstanding anything contained in any other law, any prosecution in respect of any offence referred to in sub-section (2) of Sec.3 shall be instituted only in the Special Court and any prosecution in respect of such offence pending in any Court shall stand transferred to the Special Court.”

Section 9 lays down the procedure and powers of Special

Court. Section 9-A deals with the jurisdiction, powers,

authority and procedure of Special Court in civil matters.

Section 9-A came into force subsequently by amending Act 24

of 1994 with effect from 25th January, 1994 which reads as

under :

“9-A. Jurisdiction, powers, authority and procedure of Special Court in civil matters.- (1) On and from the

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commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act,1994, the Special Court shall exercise all such jurisdiction, powers and authority as were exercisable, immediately before such commencement by any Civil Court in relation to any matter or claim-

(a) relating to any property standing attached under sub-section (3) of Sec.3;

(b) arising out of transactions in securities entered into after the 1st day of April, 1991, and on or before the 6th day of June, 1992. In which a person is notified under sub-section (2) of Sec.3 is involved as a party, broker, intermediary or in other manner.

(2) Every suit, claim or other legal proceeding (other than an appeal) pending before any Court immediately before the commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act,1994, being a suit, claim or proceeding, the cause of action whereon it is based is such that it would have been, if it had arisen after such commencement, within the jurisdiction of the Special Court under sub-section (1), shall stand transferred on such commencement of the Special Court and the Special Court may, on receipt of the records of such suit, claim or other legal proceedings proceed to deal with it

7

so far as may be in the same manner as a suit, claim or legal proceeding from the stage which was reached before such transfer or from any earlier stage or de novo as the Special Court may deem fit.

(3) On and from the commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Act, 1994, no Court other than the Special Court shall have, or be entitled to exercise any jurisdiction, power or authority in relation to any matter or claim referred to in sub-section (1).

(4) While dealing with cases relating to any matter or claim under this section, the Special Court shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 ( 5 of 1908), but shall be guided by the principles of natural justice, and subject to the other provisions of this Act and or any rules, the Special Court shall have power to regulate its own procedure.

(5) Without prejudice to the other powers conferred under this Act, the Special Court shall have, for the purposes of discharging its functions under this section, the same powers as are vested in Civil Court under the Code of Civil Procedure, 1908 (5 of 1908, while trying a suit in respect of the following matters, namely:

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(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits; (d) subject to the provisions of Secs.123 and

124 of the Indian Evidence Act, 1872, requisitioning any public record or document or copy of such record or document from any office;

(e) issuing commissions for the examination of witnesses or documents;

(f) reviewing its decisions; (g) dismissing a case for default or deciding

it ex parte; (h) setting aside any order of dismissal of

any case for default or any order passed by it ex parte; and

(i) any other matter which may be prescribed by the Central Government under sub- section (1) of Sec.14.”

Section 9-B deals with the powers of the Special Court in

arbitration matters. Section 10 deals with appeal. Section

11 which deals with the discharge of liabilities and is

relevant for our purpose, reads as under :

“ 11. Discharge of liabilities.-(1) Notwithstanding anything contained in the Code and any other law

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for the time being in force, the Special Court may make such order as it may deem fit directing the Custodian for the disposal of the property under attachment.

(2) The following liabilities shall be paid or discharged in full, as far as may be, in the order as under:-

(a) all revenues, taxes, cesses and rates due from the persons notified by the Custodian under sub- section (2) of Sec. 3 to the Central Government or any State Government or any local autority.

(b) all amounts due from the person so notified by the Custodian to any bank or financial institution or mutual fund; and

Section 13 deals with overriding effect which has

relevance for our purpose, reads as under:

“ 13. Act to have overriding effect.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in

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any decree or order of any Court, tribunal or other authority.”

The Recovery of Debts Due to Banks and Financial

Institutions Act, 1993 came into effect in 1993. The

purpose of this Act was recovery of debts due to Banks or

financial institutions or consortium of Banks less than ten

lakhs rupees or such other amount being not less than one

lakh rupees as the Central Government may by notification

specify. Under this Act Tribunals were constituted. Section

17 lays down the jurisdiction that a Tribunal shall

exercise on and from the appointed day, the powers and

authority to entertain and decide application from the

Banks and financial institutions for recovery of debts due

to such banks and financial institutions. Appeal is

provided against that to the appellate authority under

Section 20 of the Act. Section 34 lays down that it has

the overriding power. Section 34 reads as under :

“ 34. Act to have over-riding effect.- (1) Save as otherwise provided in sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

11

(2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporation Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 ( 52 of 1963),The Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), the Sick Industrial Companies (Special Provisions) Act, 1985 and the Small Industries Development Bank of India Act, 1989.”

5. The admitted facts are that the respondent No.1-

Ketan Parekh was a notified party on 6.10.2001. Therefore,

on 6.10.2001 all his movable and immovable properties stood

attached. Under the Act of 1992, under Section 3(3), the

Custodian may, on being satisfied on information received

that any person has been involved in any offence relating

to transactions in securities after the lst day of April,

1991 and on and before 7th June, 1992, notify the name of

such person in the official gazette and from the date when

such party is notified all properties, movable or immovable

or both belonging to any person notified shall stand

attached simultaneously with the issue of the notification,

notwithstanding anything contained in the Code and any

other law for the time being in force. After attaching that

property the Custodian will have the right to deal with

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such property in such manner as directed the Special Court.

Therefore, an analysis of this section means that the

moment a person is notified, his property stands attached

and the Custodian is in authority of that property and he

shall deal with the property in the manner as directed by

the Special Court notwithstanding anything contained in the

Code ( Code means the Civil Procedure Code). Therefore,

the property of the respondent herein stood attached under

the orders of the Special Court on 6.10.2001 when the

respondent was declared a notified person under sub-section

(3) of Section 3 of the Act of 1992. Section 9-A which was

introduced in 1994 gives full power from the date this

amended provision came into force i.e. in 1994 that the

Special Court alone will have the jurisdiction to deal with

all the cases pending immediately before such commencement

by any Civil Court in relation to any manner or claim

relating to the property standing attached under sub-

section (3) of Section 3. Sub-section (2) of Section 9-A

says that every suit, claim or other legal proceeding

(other than an appeal) pending before any Court immediately

before the commencement of the Special Court (Trial of

Offences Relating to Transactions in Securities) Amendment

Act,1994, being a suit, claim or proceeding, the cause of

action whereon it is based is such that it would have been,

if it had arisen after such commencement, within the

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jurisdiction of the Special Court under sub-section (1),

shall stand transferred on such commencement of the Special

Court and the Special Court may, on receipt of the records

of such suit, claim or other legal proceedings proceed to

deal with it so far as may be in the same manner as a suit,

claim or legal proceeding from the stage which was reached

before such transfer or from any earlier stage or de novo

as the Special Court may deem fit. Sub-section (3) further

says that no Court other than the Special Court shall have,

or be entitled to exercise any jurisdiction, power or

authority in relation to any matter or claim referred to in

sub-section (1). Sub-section (4) further says that the

Special Court shall not be bound by the procedure laid down

by the Code of Civil Procedure. But it shall be guided by

the principles of natural justice and subject to the other

provisions of this Act and the Rules framed thereunder.

Sub-section (5) futher says that the Special Court shall

have all powers as a Civil Court under the Code of Civil

Procedure for trying such suits. Section 11 deals with the

discharge of liabilities. It also starts with a non-

obstante clause and says that notwithstanding anything

contained in the Code or any other law for the time being

in force, the Special Court shall direct the Custodian for

disposal of the property under attachment and liabilities

shall be discharged in the order i.e. (a) all revenues,

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taxes, cesses and rates due from the persons notified by

the Custodian under sub-section (2) of Sec. 3 to the

Central Government or any State Government or any local

authority. (b) all amounts due from the person so notified

by the Custodian to any bank or financial institution or

mutual fund; and any other liability as may be specified by

the Special Court. Therefore, by virtue of section 11, the

first priority has been given to all dues of the revenues,

taxes, cesses etc. The second priority has been given to

any bank or financial institution or mutual fund and the

last priority has been given as directed the Special Court.

Section 13 clearly lays down that this Act will have over-

riding effect notwithstanding anything inconsistent

therewith contained in any other law for the time being in

force or in any instrument having effect by virtue of any

law, other than this Act, or in any decree or order of any

Court, tribunal or other authority. The analysis of these

necessary provisions clearly establishes that once the

property of a notified person is attached by the Custodian

and the same having been notified then the property of the

notified person being movable or immovable shall be subject

to the order passed by the Special Court and the manner in

which properties for discharge of the liabilities would be

dealt with has already been mentioned in Section 11 of the

Act of 1992 and lastly that the provisions of this Act will

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have the over-riding effect even on Tribunals as is clearly

and categorically mentioned in Section 13 of the Act of

1992. Therefore, in the scheme of things this Act has been

given priority over all Acts. The Act of 1993 came for

recovery of debts due to the Banks and Financial

Institutions. This Act also contains the over-riding

effect. Section 34 of the Act of 1993 clearly says that

this Act will have the over-riding effect for recovery of

debts due to the Banks and Financial Institutions. Both the

Acts have non-obstante clause. The Act of 1993 is a

subsequent legislation and the Act of 1992 is a prior

legislation. Therefore, it was contended by learned senior

counsel for the appellant that since the Act of 1993 is a

subsequent legislation, it should have the over-riding

effect over the Act of 1992. As against this, learned

senior counsel for the respondent No.1, contended that

Section 9-A of the Act of 1992 came by the amending Act 24

of 1994 on 25.1.1994 and it is specifically provided that

after a person is notified under section 3(3) of the Act of

1992, his property pertaining to the transactions in

securities entered after the 1st day of April, 1991 and on

and before 6th June, 1992 shall stand attached and the

Special Court will have the jurisdiction and none else.

Learned senior counsel for the respondent No.1 submitted

that this provisions having come subsequently after the Act

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of 1993, Section 9-A of the Act of 1992 (came into force

w.e.f. 25.1.1994) will have the over-riding effect over the

Act of 1993. The contention of learned senior counsel for

respondent No.1 appears to be justified. Apart from that

it is provided in sub-section (3) of Section 3 that the

transactions in securities entered into after 1st day of

April, 1991 and on or before 6th June, 1992, the properties

pertaining to these securities shall vest with the

Custodian to be dealt with as directed by the Special

Court. Therefore, the properties pertaining to these

transactions during the aforesaid period, will be subject

to the jurisdiction of the Special Court only. There is

another reason to come to this conclusion that in fact this

Act was specially meant to deal with the fraudulent

transactions which has taken place from 1st of April, 1991

to 6th of June, 1992. Therefore, this Act has special

purpose to deal with the scam which has taken place in

securities transactions during this period. The special

purpose behind this Act is more than apparent from the

Statement of Objects and Reasons and the Statement of

Objects and Reasons amply clarifies this position. The

Statement of Objects and Reasons reads as under :

“ Statement of Objects and Reasons.- (1) In the course of the investigations by the Reserve Bank of

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India, large scale irregularities and malpractices were noticed in transactions in both the Government and other securities, indulged in by some brokers in collusion with the employees of various banks and financial institutions. The said irregularities and malpractices led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers.

(2) To deal with the situation and in particular to ensure speedy recovery of the huge amount involved, to punish the guilty and restore confidence in and maintain the basic integrity and credibility of the banks and financial institutions the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance , 1992, was promulgated on the 6th June, 1992. The Ordinance provides for the establishment of a Special Court with a sitting Judge of a High Court for speedy trial of offences relating to transactions in securities and disposal of properties attached. It also provides for appointment of one or more custodians for attaching the property of the offenders with a view to prevent diversion of such properties by the offenders.

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6. Therefore, this Act has a special task before it

and that task has to be dealt with in the parameters laid

down by this Act. The Act of 1993 was of comparatively

general in nature pertaining to recovery of debts due to

the Banks and Financial Institutions. The idea was that all

the suits pertaining to recoveries of Banks and Financial

Institutions spreading over the Civil Courts and this has

resulted into great strain on the Banks and Financial

Institutions. Therefore, in order to meet that contingency

this Act was promulgated. The preamble in this Act clearly

reads as under :

“ An Act to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto. “

Therefore, the purpose of the Act of 1993 was to expedite

the recovery of the debts due to the banks and financial

institutions. Incidentally, the purpose of both the Acts

has separate area of operation. Application was filed by

the Bank before the Debts Recovery Tribunal for recovery of

its debts against the same person i.e. Ketan Parekh and

temporary injunction was issued to disclose the assets and

during the pendency of these Original Applications the

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jurisdiction of the Tribunal was challenged. Therefore,

the issue came up specially before the High Court. The

effect of Act of 1992 has special purpose and incidentally

the subject matter appears to be the same under both the

Acts but the Act of 1992 clearly lays down the specific

purpose i.e. the scam which has taken place relating to

the transactions in securities from 1.4.1991 to 6.6.1992 to

deal with such scam only. Section 9-A which has come

subsequently in the Act of 1992 i.e. on 25.1.1994 deals

with the over-riding effect on the Act of 1993. Therefore,

the Act of 1992 has the over-riding effect over the Act of

1993.

7. In this connection, our attention was invited to

a decision of this Court in B.O.I. Finance Ltd. v.

Custodian & Ors. [ (1997) 10 SCC 488]. In this case, notification was issued under the Securities Contracts

(Regulation) Act, 1956 prohibiting all contracts for sale

or purchase of securities other than such spot delivery

contract or contract for cash or hand delivery or special

delivery in any securities as permissible under the Act.

The transaction was consisting of two interconnected legs

i.e. ready leg consisting of sale of securities by the

brokers and purchase thereof by the banks at market price

and the forward leg consisting of sale back of the

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securities by the banks and purchase thereof by the brokers

after a period of 14 days on a fixed date at a price

determined on the first date. Their Lordships held that

the ready- forward transaction is severable into two parts

i.e. the ready leg and the forward leg. Ready leg

transaction was not illegal, unlawful or prohibited under

Section 23 of the Contract Act. Ready leg having been

completed prior to the notified date, forward leg which is

illegal being hit by the notification, the same has to be

ignored. It was further held that once the payment of

market price is made the title to the securities stood

validly transferred to the banks under Transfer of Property

Act and thereby the banks became owners and the ready leg

having been performed illegally of the forward leg

contained in the agreements cannot affect the transfers

which had already taken place. The appellant banks had

prior to 6.6.1992 entered into contracts with different

brokers for the purchase and sale of certain securities

which were not listed on any stock exchange. Therefore,

such transactions were completed after the payment of

agreed price and delivery of securities were received

before 6.6.1992. Therefore, it was held that the order

passed by the Special Court on application filed by the

Custodian of the notified person was not correct and the

order passed by the Special Court was set aside. This was a

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case in which the transaction was found to be valid.

Therefore, this case cannot provide any assistance. Our

attention was invited to another decision of this Court in

Tax Recovery Officer, Central Range-I v. Custodian & Ors.

[(2007) 7 SCC 461]. In that case it was held that that the property of any person notified under section 3(2) & (3) of

the Act can be attached and the jurisdiction of the Special

Court is confined to that property of the notified person

only. It was found that the Company D which was notified as

a party under section 3(2) of the Act of 1992 and not the

Company K. Company D owed money from Company K and its

subsidiaries and it was in execution of the decree passed

in the favour of Company D, the property of Company K was

put to auction. Thus, the Special Court could not have

entertained the application moved by the Income-Tax

Department for realization of its income tax dues from the

Company K and therefore, it was held that the application

moved by the Income Tax Department was rightly rejected by

the Special Court. Our attention was invited to a decision

of this Court in Life Insurance Corporation of India v.

D.J.Bahadur & Ors. [ (1981) 1 SCC 315].In this case, the question was whether the provisions of the Industrial

Disputes Act will prevail or the provisions of the Life

Insurance ( Alteration of Remuneration and other Terms and

Conditions of Service of Employees) Order, 1957 framed

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under the Life Insurance Corporation Act, 1956. In that

context, their Lordships after dealing with the provisions

of Life Insurance Corporation Act and the Rules framed

thereunder held that the case will be covered by the

Industrial Disputes Act. It was observed per Krishna

Iyer, J as follows:

“ In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purpose it may be special. Vis-à-vis ‘ industrial vists’ at the termination of the settlement as between the workmen and the Corporation the ID Act is a special legislation and the LIC Act a general legislation. So the ID Act, being a special law, will prevail over the LIC Act which is a general law.”

Pathak, J. concurring with Krishna Iyer, J observed as

follows “

“ Law declared by the court in respect of an award holds true in the case of a settlement. Not only are the statutory provisions pertaining to a

23

settlement and an award comparable in this regard but, if anything the observations if read in respect of a settlement, which after all is a voluntary agreement between the parties, would seem to hold more strongly. “

Our attention was invited to a decision of this Court in

L.S.Synthetics Ltd. v. Fairgrowth Financial Services Ltd. &

Anr. [ (2004)11 SCC 456]. In this case it was held that the contention that only those properties belonging to the

notified person which are the subject-matter of the

transactions in securities would stand attached and for

that purpose Section 9-A of the Act must be read down was

not sustainable. Our attention was also invited to a

decision of this Court in Allahabad Bank v. Canara Bank &

Anr. [(2000) 4 SCC 406]. In this case there was a question of jurisdiction whether the Recovery of Debts Due to Banks

and Financial Institutions Act, 1993 will prevail or the

provisions of the Companies Act, 1956. In that context

their Lordships observed as follows:

“ Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act

24

giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely Section 34. Therefore, in view of Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts.”

8. In the present case, both the two Acts i.e. the

Act of 1992 and the Act of 1993 start with the the non-

obstante clause. Section 34 of the Act of 1993 starts with

non-obstante clause, likewise Section 9-A of the Act of

1992. But incidentally, in this case Section 9-A came

subsequently, i.e. it came on 25.1.1994. Therefore, it is a

subsequent legislation which will have the over-riding

effect over the Act of 1993. But cases might arise where

both the enactments have the non-obstante clause then in

that case, the proper perspective would be that one has to

see the subject and the dominant purpose for which the

special enactment was made and in case the dominant purpose

is covered by that contingencies, then notwithstanding that

the Act might have come at a later point of time still the

intention can be ascertained by looking to the objects and

reasons. However, so far as the present case is concerned,

it is more than clear that Section 9-A of the Act of 1992

was amended on 25.1.1994 whereas the Act of 1993 came in

1993. Therefore, the Act of 1992 as amended to include

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Section 9-A in 1994 being subsequent legislation will

prevail and not the provisions of the Act of 1993.

9. Apart from this, in the present case both the

Acts can be read harmoniously. Whatever dues are due to the

Banks or the Financial Institutions can be claimed under

Section 11 (2) of the Act of 1992 which specially empowers

that the liabilities can be adjusted out of the securities

of the person notified in the manner provided under Section

11(2)(b). Therefore, in the present case, the Bank can

certainly make an application before the Special Court

under Section 11(2)(b) of the Act of 1992 for discharge of

their liabilities against the securities of the notified

person.

10. As a result of our above discussion, the view taken by

the Division Bench of the High Court of Bombay appears to

be justified and there is no ground to interfere with the

same. Consequently, the appeal is dismissed with no order

as to costs.

……………………………….J [A.K.MATHUR]

………………………… ……J New Delhi, [ALTAMAS KABIR] May 16, 2008.

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BANK OF INDIA Vs KETAN PAREKH

BANK OF INDIA Vs KETAN PAREKH