Tenancy rights under sick company law cannot be decided by BIFR or AAIFR, and fair hearing remains mandatory.

The Sick Industrial Companies (Special Provisions) Act, 1985 was treated as a self-contained code limited to measures concerning sick industrial companies and their assets, so BIFR and AAIFR could not adjudicate tenancy disputes, fix enhanced rent, or order eviction where tenancy was governed by separate rent legislation. The Court further noted that section 32 did not override tenancy law on this subject, Article 254 was not engaged because the statutes operated in distinct fields, and section 22(1) did not extend to such eviction proceedings. It also held that an adverse order affecting the petitioner's tenancy and liability could not stand without prior notice and a fair opportunity of hearing.

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Issues: (i) Whether the Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction had jurisdiction under the Sick Industrial Companies (Special Provisions) Act, 1985 to determine tenancy rights, fix enhanced rent, and direct eviction from a tenanted residential flat; (ii) Whether the impugned order was vitiated for want of notice and fair hearing.

Issue (i): Whether the Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction had jurisdiction under the Sick Industrial Companies (Special Provisions) Act, 1985 to determine tenancy rights, fix enhanced rent, and direct eviction from a tenanted residential flat.

Analysis: The Act was held to be a self-contained code confined to matters concerning sick industrial companies and the measures contemplated by it. The scheme under section 18 could provide for sale, lease, transfer, and incidental or supplemental measures in relation to the industrial undertaking or its assets, but the Act did not confer power to adjudicate upon tenancy disputes governed by a separate rent law. The Court held that the West Bengal Premises Tenancy Act and the Sick Industrial Companies (Special Provisions) Act, 1985 operated in distinct fields, so Article 254 of the Constitution of India had no application and section 32 of the Act did not override tenancy law on this subject. Section 22(1) also did not cover eviction proceedings of this nature. BIFR and AAIFR could not determine or extinguish tenancy rights or order eviction of the tenant.

Conclusion: The jurisdictional findings were against the respondents and in favour of the petitioner.

Issue (ii): Whether the impugned order was vitiated for want of notice and fair hearing.

Analysis: The petitioner company was not served notice before the order affecting its tenancy and liability to pay enhanced rent was made. Mere awareness or participation of persons said to represent other interests was not treated as a substitute for notice to the petitioner company itself. Since the order adversely affected the petitioner's civil rights without affording an effective opportunity to be heard, the proceedings were held to be void and the order unsustainable.

Conclusion: The challenge on the ground of breach of natural justice succeeded in favour of the petitioner.

Final Conclusion: The impugned orders could not stand, as the authorities lacked power to decide the tenancy controversy and the decision was also rendered without observance of fair hearing requirements.

Ratio Decidendi: Statutory powers under the Sick Industrial Companies (Special Provisions) Act, 1985 cannot be extended to adjudicate private tenancy rights or order eviction where the tenancy is governed by a separate law, and any adverse order affecting such rights must be preceded by proper notice and a fair opportunity of hearing.

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