Fertilizer Corporation Of India Limited vs Coromandal Sacks Private Limited 2024 INSC 348- Sick IndustrialCompanies (Special Provisions) Act- Interpretation Of Statutes

Sick Industrial Companies (Special Provisions) Act, 1985; Section 22(1) -For the applicability of Section 22(1) of the 1985 Act, three aspects need to be considered – I. First, an inquiry under Section 16 of the 1985 Act must be pending; or any scheme referred to in Section 17 of the 1985 Act must be under preparation or consideration or a sanctioned scheme must be under implementation; or an appeal under Section 25 of the 1985 Act must be pending – in relation the company against whom the legal proceedings sought to be suspended have been initiated. II. Secondly, the proceedings must be one from amongst the six types [I. Winding up of the industrial company; II. Execution, distress or the like against any of the properties of the industrial company; III. Appointment of receiver in respect of any of the properties of the industrial company; IV. Suit for recovery of money from the industrial company; V. Suit for enforcement of a security against the industrial company; VI. Suit for enforcement of a guarantee in respect of loans or advance granted to the industrial company], or of a similar nature, i.e. ejusdem generis to the said six types of proceedings. III. Thirdly, the proceedings must have the effect of threatening the assets of the sick company and interfering with the formulation, consideration, finalisation or implementation of the scheme- When the suit was a simple suit for recovery of money towards the dues arising under the alleged illegal deductions under the contract,it cannot be said to be a proceeding in the nature of execution, distress or the like and hence the suit was not hit by Section 22(1) of the 1985 Act. (Para 97-98)

Interpretation Of Statutes -Mischief rule of construction: “The rule which is also known as ‘purposive construction’ or ‘mischief rule’, enables consideration of four matters in construing an Act: (i) What was the law before the making of the Act, (ii) What was the mischief or defect for which the law did not provide, (iii) What is the remedy that the Act has provided, and (iv) What is the reason of the remedy. The rule then directs that the courts must adopt that construction which “shall suppress the mischief and advance the remedy.” (Para 100)

Interpretation Of Statutes -Harmonious Construction – Doctrine of harmonious construction is based on the principle that the legislature would not lightly take away from one hand what it had given with the other. Thus, this doctrine provides, that as far as possible, two seemingly conflicting provisions within a statute, or the seemingly conflicting provisions of one statute vis a vis another, should be construed in a manner so as to iron out any conflict. (Para 136)

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