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        Companies Law

        2004 (2) TMI 348 - HC - Companies Law

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        Competing non obstante clauses: the later special statute prevails, allowing delayed-payment recovery despite sick-company protection. Where two special statutes contain competing non obstante clauses, the later enactment prevails unless it shows a contrary legislative intention. Applying ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Competing non obstante clauses: the later special statute prevails, allowing delayed-payment recovery despite sick-company protection.

                              Where two special statutes contain competing non obstante clauses, the later enactment prevails unless it shows a contrary legislative intention. Applying that principle, the 1993 Act on delayed payments to small-scale and ancillary industrial undertakings was treated as overriding the earlier sick-industry regime under the Sick Industrial Companies (Special Provisions) Act, 1985. The analysis emphasised the statutory object of prompt recovery of delayed payments and relied on the Supreme Court's exposition in Solidaire India Ltd. as supporting authority. On that basis, proceedings before the Industry Facilitation Council were not barred by the sick-company legislation.




                              Issues: Whether the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 prevails over the Sick Industrial Companies (Special Provisions) Act, 1985 so as to bar proceedings before the Industry Facilitation Council against a sick industrial company.

                              Analysis: The dispute turned on the effect of competing non obstante clauses in two special enactments. The 1993 Act contains an overriding provision in section 10, while the sick-company legislation relies on sections 22 and 32 to protect the rehabilitation process. The Court applied the principle that where two special statutes contain overriding clauses, the later enactment prevails unless the later law indicates a contrary intention. The objects of the two statutes and the Supreme Court's exposition in Solidaire India Ltd. supported the view that prompt recovery of delayed payments under the 1993 Act was intended to operate notwithstanding the earlier sick-company regime.

                              Conclusion: The 1993 Act prevails over the Sick Industrial Companies (Special Provisions) Act, 1985, and the stay application was rightly rejected.

                              Ratio Decidendi: When two special statutes with non obstante clauses are in conflict, the later statute prevails and its overriding provision operates according to legislative intent.


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