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TMI Blog2024 (4) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... t, then it would clearly be considered as legislation by reference . In such a case, the amending laws of the former Act would become applicable to the later Act. However, when the provisions of an Act are specifically referred and incorporated in the later statute, then those provisions alone are applicable and the amending provisions of the former Act would not become part of the later Act. This Court in the case of Girnar Traders [ 2011 (1) TMI 1343 - SUPREME COURT] held that, if the legislature intended to apply the provisions of the Land Acquisition Act generally and wanted to make a general reference, it could have said that the provisions of the Land Acquisition Act would be applicable to the MRTP Act, 1966. This Court observed that such expression was conspicuous by its very absence. This Court held that both these Acts i.e. Land Acquisition Act and the MRTP Act, 1966 are self-contained codes within themselves. This Court observed that the State Legislature while enacting the MRTP Act, 1966 has referred to the specific sections of the Land Acquisition Act in the provisions of the State Act. This Court further observed that none of the sections require application of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter referred to as the Appellant-Board ) under Section 236 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code ) read with Sections 190, 193 and 200 of the Code of Criminal Procedure, 1973 ( Cr.P.C.) for the offences punishable under Section 73(a) and Section 235A of the Code. 2. The facts in brief, giving rise to the present appeal are as under: 2.1 M/s. SBM Paper Mills Private Limited (hereinafter referred to as the Corporate Debtor ) filed a petition on 4th September 2017 under Section 10 of the Code for initiation of the Corporate Insolvency Resolution Process (hereinafter referred to as CIRP ) of itself vide CP/1362/I BC/NCLT/MB/MAH/2017. The National Company Law Tribunal, Mumbai Bench (hereinafter referred to as the NCLT ) vide order dated 17th October 2017, admitted the Petition and directed the moratorium to commence as prescribed under Section 14 of the Code and directed certain statutory steps to be taken as a consequence thereof. Vide the said order, the NCLT also appointed Mr. Amit Poddar as the Interim Resolution Professional (hereinafter referred to as RP ) to carry out the functions as prescribed under the provisions of the Code. 2.2 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor. 4. Shri S.V. Raju, learned ASG submitted that the learned Single Judge of the High Court has grossly erred in quashing the proceedings. Shri Raju submitted that the learned Single Judge of the High Court has grossly erred in holding that, in view of the Companies (Amendment) Act, 2017 (which came into effect from 7th May 2018), only the offences committed under the Companies Act can be tried by Special Court consisting of Sessions Judge or Additional Sessions Judge. He submitted that the reasoning given by the learned Single Judge that the offences other than the Companies Act cannot be tried by the Special Court consisting of Sessions Judge or Additional Sessions Judge is totally in ignorance of the provisions of sub-section (1) of Section 236 of the Code. 5. Learned ASG submitted that sub-section (1) of Section 236 of the Code provides that the offences under the Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013. He submits that the legislative intent is clear. There is no general reference to the provisions of the Companies Act. He submits that what has been done by subsection (1) of Section 236 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is for the purposes of restricting only to the Companies Act and not for any other purpose. He therefore submits that the finding of the learned Single Judge of the High Court that in view of the Companies (Amendment) Act, 2017, the Special Court consisting of Sessions Judge or Additional Sessions Judge will not have the jurisdiction to entertain the complaint in question is totally erroneous. 10. Learned ASG submits that, in any event, the learned Single Judge of the High Court has erred in quashing the complaint. It is submitted that, in the event the learned Single Judge found that the Special Court consisting of Sessions Judge or Additional Sessions Judge did not have jurisdiction and it is the Special Court of Metropolitan Magistrate or Judicial Magistrate First Class which has jurisdiction, then it should have returned the complaint for presentation of the same before the competent court having jurisdiction. 11. Shri Amir Arsiwala, learned Advocate on Record appearing for the Respondents raises a preliminary objection. He submits that the point with regard to legislation by incorporation was not argued before the learned Single Judge of the High Court and therefore the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration but would be a case of legislation by reference . 16. Learned counsel submits that in any case, the Respondents Nos.1 and 2 have a good case on merits. He submits that the learned Single Judge of the High Court has not considered the merits of the matter and in the event this Court holds that the learned Single Judge was not justified in quashing the proceedings, the matter be remitted to the learned Single Judge of the High Court for deciding it afresh on merits. 17. Shri Vikas Mehta, learned Advocate on Record for the Appellant-Board, in rejoinder, reiterated the submissions made by Shri S.V. Raju, learned ASG. He submits that the legislative intent is clear. If the legislature wanted to take out the offences punishable under the Code from the ambit of Chapter XXVIII of the Companies Act, 2013, nothing prevented it from making an amendment to the Code itself. III. CONSIDERATION OF STATUTORY PROVISIONS 18. For considering the rival submissions, it will be necessary to refer to Section 236(1) of the Code, which reads thus: 236. Trial of offences by Special Court. (1) Notwithstanding anything in the Code of Criminal Procedure, 1973 (2 of 1974), offences under of this Code s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not be qualified for appointment as a Judge of a Special Court unless he is, immediately before such appointment, holding office of a Sessions Judge or an Additional Sessions Judge. Section 435 (after the 2018 Amendment) 435. Establishment of Special Courts. (1) The Central Government may, for the purpose of providing speedy trial of offences under this Act, except under section 452, by notification, establish or designate as many Special Courts as may be necessary. (2) A Special Court shall consist of (a) a single judge holding office as Session Judge or Additional Session Judge, in case of offences punishable under this Act with imprisonment of two years or more; and (b) a Metropolitan Magistrate or a Judicial Magistrate of the First Class, in the case of other offences, who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be appointed is working. 21. It could thus be seen that as per Section 435(3) of the Companies Act, 2013, as it existed on the date on which the Code came into effect (i.e. after the 2015 Amendment), a person to be qualified for appointment as a Judge of a Specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge and all offences under the Companies Act, 2013 were required to be tried by such Special Courts. The 2015 Amendment to Section 435 also provided for only one class of Special Courts i.e. a person holding the rank of a Sessions Judge or an Additional Sessions Judge. The change that was brought out was that, only offences punishable under the Companies Act, 2013 with imprisonment of two years or more were to be tried by the Special Courts, whereas all other offences i.e. offences punishable with imprisonment of less than two years were to be tried by the jurisdictional Metropolitan Magistrate or the Judicial Magistrate of the First Class. By the 2018 Amendment, two classes of Special Courts were established. The first class of Special Courts comprised of an officer holding the office as Sessions Judge or Additional Sessions Judge, whereas the second class of Special Courts comprised of Metropolitan Magistrate or a Judicial Magistrate of the First Class. The offences punishable under the Companies Act with imprisonment of two years or more were required to be tried by a Special Court comprising of Sessions Judge or Additional Sessions Judge, whereas all other offences i.e. the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears: be construed as references to the provision so re-enacted. On the other hand, the effect of incorporation is as stated by Brett, L.J. in Clarke v. Bradlaugh [1881 8 QBD 63] : Where a statute is incorporated, by reference, into a second statute the repeal of the first statute by a third does not affect the second. This is analogous to, though not identical with the principle embodied in Section 6-A of the General Clauses Act enacted to define the effect of repeals effected by repealing and amending Acts which runs in these terms: 6-A. Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any Central Act or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. We say not identical be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act. It has already been pointed out that before the amendment vehicles used solely upon the premises of the owner, though they may be mechanically propelled vehicles adapted for use upon roads were excluded from the definition of motor vehicle . If this definition which excludes them is the one which is incorporated by reference under Section 2(c) of the Taxation Act, then no tax is leviable on these vehicles under the Taxation Act. Shri Tarkunde for the State of Orissa contends that the definition of motor vehicle in Section 2(c) of the Taxation Act is not a definition by incorporation but only a definition by reference, and as such the meaning of motor vehicle for the purpose of Section 2(c) of the Taxation Act would be the same as defined from time to time under Section 2(18) of the Act. In ascertaining the intention of the legislature in adopting the method of merely referring to the definition of motor vehicle under the Act for the purpose of the Taxation Act, we have to keep in mind its purpose and intendment as also that of the Motor Vehicles Act. We have already stated what these purposes are and having regard to them the registration of a motor vehicle does not automat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Taxation Act. If the subsequent Orissa Motor Vehicles Taxation (Amendment) Act, 1943, incorporating the definition of motor vehicle referred to the definition of motor vehicle under the Act as then existing, the effect of this legislative method would, in our view, amount to an incorporation by reference of the provisions of Section 2(18) of the Act in Section 2(c) of the Taxation Act. Any subsequent amendment in the Act or a total repeal of the Act under a fresh legislation on that topic would not affect the definition of motor vehicle in Section 2(c) of the Taxation Act. This is a well-accepted interpretation both in this country as well as in England which has to a large extent influenced our law. This view is further reinforced by the use of the word has in the expression has the same meaning as in the Motor Vehicles Act, 1939 in Section 2(c) of the Taxation Act, which would perhaps further justify the assumption that the Legislature had intended to incorporate the definition under the Act as it then existed and not as it may exist from time to time. This method of drafting which adopts incorporation by reference to another Act whatever may have been its historical jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State, and their Lordships are not prepared to hold that the subsection in question, which was not enacted till 1921, can be regarded as incorporated in the Local Act of 1911. It was not part of the Land Acquisition Act when the Local Act was passed, nor in adopting the provisions of the Land Acquisition Act is there anything to suggest that the Bengal Legislature intended to bind themselves to any future additions which might be made to that Act. It is at least conceivable that new provisions might have been added to the Land Acquisition Act which would be wholly unsuitable to the local code. Nor again, does Act 19 of 1921 contain any provision that the amendments enacted by it are to be treated as in any way retrospective, or are to be regarded as affecting any other enactment than the Land Acquisition Act itself. Their Lordships regard the Local Act as doing nothing more than incorporating certain provisions from an existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt. It was further observed at p. 267: In this country it is accepted that where a statute is incorp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediate proprietor or lessee or occupier of the mine or of any part thereof and in the case of a mine the business whereof is being carried on by a liquidator or receiver, such liquidator or receiver . The expression coal mine is separately defined in clause (b) of Section 2 of the Coal Mines Provident Fund and Bonus Schemes Act, 1948. Ramaswami, J. speaking for the Court observed at p. 261 : As a matter of construction it must be held that all works, machinery, tramways and sidings, whether above or below ground, in or adjacent to a coal mine will come within the scope and ambit of the definition only when they belong to the coal mine. In other words, the word or occurring before the expression belonging to a coal mine in the main definition has to be read to mean and . This case, as well as the decision in New Central Jute Mills Co. Ltd. v. Assistant Collector of Central Excise, Allahabad [(1970) 2 SCC 820 : (1971) 2 SCR 92] are distinguishable on the facts and legislation which this Court was considering. In the New Central Jute Mills Co. Ltd. case, the Privy Council decision in the Hindusthan Cooperative Insurance Society Ltd. case was referred to and distinguished. It is, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (Amendment) Act, 1943, incorporating the definition of motor vehicle referred to the definition of motor vehicle under the Motor Vehicles Act, as it existed at the time of enactment of the subsequent Act; the effect of this legislative method would amount to an incorporation by reference to the provisions of Section 2(18) of the Motor Vehicles Act in Section 2(c) of the Orissa Taxation Act. It was further held that, any subsequent amendment in the Motor Vehicles Act or a total repeal of the Motor Vehicles Act under a fresh legislation on that topic would also not affect the definition of motor vehicle in Section 2(c) of the Orissa Taxation Act. 31. This Court unequivocally held that the intention of Parliament for modifying the Motor Vehicles Act had no relevance in determining the intention of the Orissa Legislature in enacting the Orissa Taxation Act. This Court held that the dumpers and rockers, which were used by the miners in their premises though registrable under the Motor Vehicles Act were not taxable under the Orissa Taxation Act as long as they were working solely within the premises of the respective owners. 32. In the case of Mahindra and Mahindra Ltd. (supra), Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 55, Section 100 of the Code of Civil Procedure was substituted by a new section by Section 37 of the Code of Civil Procedure (Amendment) Act, 1976 with effect from February 1, 1977 and the new Section 100 provided that a second appeal shall lie to the High Court only if the High Court is satisfied that the case involves a substantial question of law. The three grounds on which a second appeal could lie under the former Section 100 were abrogated and in their place only one ground was substituted which was a highly stringent ground, namely, that there should be a substantial question of law. This was the new Section 100 which was in force on the date when the present appeal was preferred by the appellant and the argument of the respondents was that the maintainability of the appeal was, therefore, required to be judged by reference to the ground specified in the new Section 100 and the appeal could be entertained only if there was a substantial question of law. The respondents leaned heavily on Section 8(1) of the General Clauses Act, 1897 which provides: Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals and re-enacts, with or without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, M.R., while dealing with legislation in incorporation in In re Wood's Estate [(1886) 31 Ch D 607] pointed out at p. 615: If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all. Lord Justice Brett, also observed to the same effect in Clarke v. Bradlough [(1881) 8 QBD 63, 69] : . there is a rule of construction that, where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third statute does not affect the second. This was the rule applied by the Judicial Committee of the Privy Council in Secretary of State for India in Council v. Hindustan Cooperative Insurance Society Ltd. [58 IA 259] The Judicial Committee pointed out in this case that the provisions of the Land Acquisition Act, 1894 having been incorporated in the Calcutta Improvement Act, 1911 and become an integral part of it, the subsequent amendment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Motor Vehicles Act, 1939. Subsequently, Section 2(18) was amended by Act 100 of 1956 but no corresponding amendment was made in the definition contained in Section 2(c) of the Taxation Act. The argument advanced before the Court was that the definition in Section 2(c) of the Taxation Act was not a definition by incorporation but only a definition by reference and the meaning of motor vehicle in Section 2(c) must, therefore, be taken to be the same as defined from time to time in Section 2(18) of the Motor Vehicles Act, 1939. This argument was negatived by the Court and it was held that this was a case of incorporation and not reference and the definition in Section 2(18) of the Motor Vehicles Act, 1939 as then existing was incorporated in Section 2(c) of the Taxation Act and neither repeal of the Motor Vehicles Act, 1939 nor any amendment in it would affect the definition of motor vehicle in Section 2(c) of the Taxation Act. It is, therefore, clear that if there is mere reference to a provision of one statute in another without incorporation, then, unless a different intention clearly appears, Section 8(1) would apply and the reference would be construed as a reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the amending laws of the former Act would normally become applicable to the later Act; but, when the provisions of an Act are specifically referred and incorporated in the later statute, then those provisions alone are applicable and the amending provisions of the former Act would not become part of the later Act. This principle is generally called legislation by incorporation. General reference, ordinarily, will imply exclusion of specific reference and this is precisely the fine line of distinction between these two doctrines. Both are referential legislations, one merely by way of reference and the other by incorporation. It, normally, will depend on the language used in the later law and other relevant considerations. While the principle of legislation by incorporation has well-defined exceptions, the law enunciated as of now provides for no exceptions to the principle of legislation by reference. Furthermore, despite strict application of doctrine of incorporation, it may still not operate in certain legislations and such legislation may fall within one of the stated exceptions. xxx xxx xxx 121. These are the few examples and principles stated by this Court dealing with bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifficult. The semantics associated with interpretation play their role to a limited extent. Ultimately, it is a matter of probe into legislative intention and/or taking an insight into the working of the enactment if one or the other view is adopted. The doctrinaire approach to ascertain whether the legislation is by incorporation or reference is, on ultimate analysis, directed towards that end. The distinction often pales into insignificance with the exceptions enveloping the main rule. 123. In the case in hand, it is clear that both these Acts are self-contained codes within themselves. The State Legislature while enacting the MRTP Act has referred to the specific sections of the Land Acquisition Act in the provisions of the State Act. None of the sections require application of the provisions of the Land Acquisition Act generally or mutatis mutandis. On the contrary, there is a specific reference to certain sections and/or content/language of the section of the Land Acquisition Act in the provisions of the MRTP Act. [ Emphasis supplied ] 37. This Court has held that once a finding is recorded that an Act is a self-contained code, then the application of either of the doctrines i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pat and Power Limited and others (2022) 2 SCC 244 ; (vi) Embassy Property Developments Private Limited vs State of Karnataka and others (supra); and (vii) Bharti Airtel Ltd. and another vs Vijaykumar V. Iyer and others (supra). V. CONCLUSION 41. Applying these legal principles, we will have to analyze the provisions of Section 236(1) of the Code. Under Section 236(1) of the Code, reference is offences under this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013 . 42. It can thus be seen that the reference is not general but specific. The reference is only to the fact that the offences under the Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act. 43. Applying the principle as laid down by this Court in various judgments, since the reference is specific and not general, it will have to be held that the present case is a case of legislation by incorporation and not a case of legislation by reference . The effect would be that the provision with regard to Special Court has been bodily lifted from Section 435 of the Companies Act, 2013 and incorporated in Section 236(1) of the Code. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Court presided by a Sessions Judges. At the most, the learned single judge of the High Court could have directed the complaint to be withdrawn and presented before the appropriate court having jurisdiction. 47. Shri Amir Arsiwala, learned Advocate-on-record for the respondent Nos.1 and 2, had submitted that in the event this Court holds that the Special Courts presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code, this Court should remand the matter to the High Court for deciding the matter afresh on merits. It is submitted that the respondents have a good case on merits and there has been no adjudication on merits of the matter. 48. In the result, we allow the appeal. The impugned judgment and order dated 14th February 2022, passed by the learned Single Judge of the High Court of Judicature at Bombay in Writ Petition No.2592 of 2021 is quashed and set aside. It is held that the Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code. However, since the learned single judge of the High Court has not considered the merits of the matter, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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