Contractual right to unearned increase under a perpetual lease deed survives SICA amalgamation scheme and section 32 override.

A rehabilitation-cum-amalgamation scheme under the Sick Industrial Companies (Special Provisions) Act, 1985 did not displace a lessor's contractual right under a perpetual lease deed to recover unearned increase on transfer. Section 32 gives overriding effect only against inconsistent laws or instruments having statutory force; it does not override contractual obligations in a lease deed. Because the lessor was not a party to the BIFR proceedings and the leased land remained the lessor's property, the scheme could not extinguish the contractual recovery right or transfer ownership to the transferee-company.

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Issues: Whether a rehabilitation-cum-amalgamation scheme sanctioned under the Sick Industrial Companies (Special Provisions) Act, 1985 overrides the lessor's contractual right under a perpetual lease deed to recover unearned increase on transfer or vesting of the leased property.

Analysis: The scheme under the Sick Industrial Companies (Special Provisions) Act, 1985 was sanctioned in respect of the transferor-company's undertaking, but the lessor was not a party to the BIFR proceedings. Section 32 gives overriding effect to the Act, its rules and schemes only against inconsistency with other laws or instruments having statutory force; it does not displace contractual obligations contained in a lease deed. The lease deed expressly entitled the lessor to recover fifty per cent of the unearned increase on transfer, and the property remained owned by the lessor. The amalgamation scheme could not alter the lessor's rights or confer ownership of the leased land on the transferee-company.

Conclusion: The demand for unearned increase was valid and was not barred by Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985.

Ratio Decidendi: Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 overrides inconsistent laws and statutory instruments, but it does not override contractual terms in a perpetual lease deed so as to defeat the lessor's right to recover unearned increase.

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