Rehabilitation scheme interpretation secures waiver of customs-linked demand where the scheme's operative directions are read as a whole.

A rehabilitation scheme must be read as a whole, and its operative directions are not defeated by a hyper-technical reading of isolated wording. Where the scheme used "to consider" in some places but expressly directed waiver in relation to the customs-linked liability arising from the same export-obligation default, the omission of the word "customs" in one paragraph was treated as non-determinative. The Court held that the authorities were aware of the scheme and its rehabilitative purpose, so the customs demand and connected penalties had to be given effect in terms of the sanctioned scheme.

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Issues: Whether the Modified Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction contained a binding direction requiring waiver of the customs demand and consequential penalties raised under the Order-in-Original, and whether the respondents were bound to give effect to that direction.

Analysis: The scheme was read as a whole and the Court distinguished between provisions where the expression "to consider" was used and those where a direct waiver was directed. The customs-related liability was specifically linked to the demand of Rs. 81.60 lakhs in the scheme, and the omission of the word "customs" in one paragraph was treated as non-determinative because the demand originated from the same export-obligation default that was expressly covered in the rehabilitation package. The Court held that the authorities had been aware of the scheme and its implications, and that a hyper-technical reading would defeat its rehabilitative purpose.

Conclusion: The scheme was held to contain a positive and enforceable direction in favour of the petitioner, and the customs demand and connected consequences were required to be given effect in terms of the scheme.

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