REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5038 OF 2016 (ARISING OUT OF SLP (C) NO. 26747 OF 2012) DIRECTOR GENERAL OF INCOME TAX (ADMN.) ..APPELLANT(S) & ANR. VERSUS M/S. GTC INDUSTRIES LTD. & ANR. .....RESPONDENT(S) JUDGMENT A.K. SIKRI, J. Leave granted. 2) Respondent No. 1 (hereinafter referred to as 'Company'), namely, M/s GTC Industries Ltd. became sick Company sometime in year 1997 as its net worth had eroded. As per requirements of Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'SICA'), it filed reference before Board of Industrial and Signature Not Verified Financial Reconstruction (hereinafter referred to as 'Board') Digitally signed by NIDHI AHUJA Date: 2016.05.13 which was admitted and registered as Case No.17/1997. 18:11:30 IST Reason: Board conducted enquiry into working of Company to Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 1 of 26 determine whether it had become sick industrial company and in process appointed Managing Director, State Bank of India (MA) (RCB), Mumbai as Operating Agency (OA) to enquire into and make report with respect to certain matters which was specified in orders passed by Board in this behalf. Board, on completion of enquiry, satisfied itself that Company had become sick industrial company. Draft Rehabilitation Scheme (DRS) was prepared by OA which was submitted to Board and Board circulated said Scheme vide its order dated 14.01.2000. In this DRS, following income tax reliefs were proposed: (a) To exempt from applicability of provisions of Section 41(1) of Income Tax Act, 1961 and to allow carry forward of unabsorbed losses and allowances beyond eight years. (b) To lift attachment order imposed by Income Tax Department against immovable and movable properties including Debtors and Bank Accounts. Thereafter, not to attach any property including movable properties of company during rehabilitation period. (c) To grant stay against demand raised by Department but are Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 2 of 26 in dispute before various appellate authorities/Courts. (d) To waive interest and penalty, if any, imposed and not to levy such interest and penalties during rehabilitation period. (e) To exempt GTC from Capital Gain on sale of surplus land and/or sale of industrial sheds proposed for development on surplus land at Marol. (f) To exempt from TDS against payments to be received by company. Objection was filed by appellant against DRS on 23.03.2001. During hearing dated 29.03.2001, representative of appellant stated that appellant had no objection if reliefs and concessions sought were not directed to be given but kept for consideration of Income Tax Department. 3) Scheme of reconstruction/rehabilitation which was submitted by OA, after consultation with all stakeholders and creditors as per requirement of law, was approved and sanctioned by Board (hereinafter referred to as 'SS-02') vide order dated 16.02.2002. It may be mentioned here that after DRS was circulated and before it could be sanctioned, Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 3 of 26 income tax demand of Rs.366 crores was intimated by Income Tax Department (appellant herein) to OA on 01.08.2001. While sanctioning Scheme on 16.12.2002, following income tax reliefs were kept in Scheme: (a) To consider exemption from applicability of provisions of Sections 41(1), 115JB, 43-B and 72(3) of Income Tax Act, 1961 and to allow carry forward of Unabsorbed Losses and allowances beyond eight years. (b) To consider waiving interest and penalty, if any, imposed and not to levy such interest and penalties during rehabilitation period. (c) To consider exempting GTC from Capital Gain on sale of surplus land and/or sale of industrial sheds proposed for development on surplus land at Marol and/or sale of any other surplus assets. (d) To consider exempting GTC from TDS against payments to be received by company. Besides this, under head 'General Terms and Conditions' in Para 10(k) of Rehabilitation Scheme, Board directed with regard to income tax dues as under: 10(k): Income Tax Department would lift attachment orders imposed by them against immovable and movable properties of GTC including debtors and bank accounts and thereafter not to attach any property including movable properties of company during rehabilitation period without prior consent of BIFR. recovery proceedings against demands raised by Income Tax Department against disputed liabilities shall remain suspended and refunds due to company, if Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 4 of 26 any, would not be adjusted against such demands. 4) said relief was not envisaged under head reliefs and concessions asked from CBDT in Para 9(Q) and such direction was given under head General Terms and Conditions, without consent of appellants required under Section 19(2) of SICA. Further, in Para 6(t) of Sanctioned Rehabilitation Scheme (SS-02), Board referred to assumptions of projected profitability Statement at Annexure II of SS-02. assumptions of profitability, to be considered part of Sanctioned Scheme, included inter alia following: (i) sales would comprise of own manufacture of cigarettes and cigarettes purchased from convertors. (ii) That in-house capacity utilization would be in range of 54% to 75%. Further, as per projected profitability statement, projected sales comprised of cigarettes only, and that as per projected fund flow statement, there was to be no decrease in fixed assets. It was further laid down in para 10(f) under head 'General Terms and Conditions' that company would not undertake any major modernization/diversification program/ capital expenditure except normal capital expenditure during period of implementation of Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 5 of 26 rehabilitation scheme without specific prior permission of MA/BIFR. Besides this, Board further directed Promoters in para 9 (S)(b) of Sanctioned Rehabilitation Scheme to meet any shortfall in cash flow projections or any contingency not conceived in Scheme. In this regard, promoters may raise moneys by way of development of industrial estate and sale thereof of surplus land available at Marol, Mumbai or sale/development of any other surplus assets. 5) Having regard to aforesaid provisions in Scheme with its imprimatur by Board, Revenue could not and did not resort to any action by way of attachment of movable or immovable assets of company. 6) cut-off date in Scheme was 31.12.1998 and rehabilitation period of eight years was prescribed therein. However, later on cut-off date in Scheme was changed from 31.12.1998 to 31.03.2003 by Board and eight years period provided for rehabilitation was to be reckoned from 31.03.2003. In this way, Scheme was to lapse on 31.03.2011. 7) When this Scheme was still in operation, Revenue filed petition under Section 22(1) of SICA seeking permission to recover outstanding dues of Rs. 426.37 crores which were Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 6 of 26 raised after date of Sanctioned Scheme. On this petition, Board passed order dated 29.03.2006 directing Revenue to release sum of Rs. 4.28 crores which was withheld by Revenue and further directed Income Tax Department to expedite settlement of disputed demands. It was also observed that in event of crystallization of disputed demand of Revenue and in case of shortfall of funds thereof for repayment by company, company/promoters would bring requisite amount of interest free unsecured loan and/or would raise necessary fund by way of disposal of company's surplus assets as envisaged in paragraph S of SS-02. It also directed that company would settle/pay income tax dues, if any, which would become payable after sanction/implementation of SS-02 i.e. w.e.f. 01.04.2003 onwards in normal course and neither Company nor its promoters would be entitled for any protection under SICA for delay/non-payment of such dues. 8) When position stood thus, on 29.06.2007 Company submitted before Board that its net-worth became positive on 31.03.2007 and sought de-registration from SICA/Board. Board, passed order dated 29.06.2007 holding that since net-worth of company had turned positive as on 31.03.2007, it Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 7 of 26 has seized to be sick industrial undertaking within meaning of Section 3(1)(O) of SICA and discharged company from purview of SICA. Operative part of direction in said order read as under: (i) SBI is hereby relieved from responsibility as MA. (ii) unimplemented provision(s) of SS-02 for unexpired period of Scheme and also unimplemented provisions of subsequent order(s) issued by Board in this regard, if any, would continue to be implemented by concerned agencies and their implementation would be monitored by company. (iii) 'Special Director', appointed by BIFR on company's Board of Directors (BOD), if any, would stand discharged with immediate effect. (iv) company would complete necessary formalities with 'Registrar of Companies' (ROC), as may be required. 9) As per Revenue, as on 20.01.2010, there were outstanding dues and income tax amounting to Rs. 761.35 crores and demand thereof was sent to Company for payment and it was also mentioned that coercive action may be taken to recover said amount. Such demand was made on premise that net-worth of company had turned positive and it has ceased to be sick company. Therefore, having lost status of sick company, it was not entitled to protection under provisions of Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 8 of 26 SICA. 10) Within few days of this demand, Revenue found from reports in print media that company had sold its Vile Parle Property in Mumbai for sum of Rs.591 crores. In order to verify this sale transaction, specific survey under Section 133(A) of Income Tax Act was conducted from which it was gathered that Company had entered into Memorandum of Understanding (MOU) with M/s. Sheth Developers Pvt. Ltd. and Suraksha Reality Ltd. for developing said property. This MOU prescribed that on execution of agreement for development, assessee Company would receive total consideration of Rs.542.70 crores out of which assessee Company had already received advance consideration of Rs.60 crores at time of signing MOU. Further, company had also entered into agreement for development of assessee's land at Hyderabad for construction of Ashoka Golden Mall and Multiplex. company had not passed on possession of Vile Parle as development agreement was not signed. Thus, company had, by this time, converted almost all immovable properties owned by it as business assets into stock-in-trade and almost all properties were put on sale. tentative cost of sale of all these Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 9 of 26 properties would be between Rs. 700 crores to Rs. 1000 crores approximately. 11) On coming to know of aforesaid information, concerned Tax Recovery Officer of Revenue demanded tax and penalty of remaining Assessment Years was also served vide letter dated 12.03.2010. On receiving said letter dated 12.03.2010, Company filed M.A. bearing No. 200/2010 before Board seeking stay of any coercive action proposed to be taken by Revenue. This application was contested by Revenue, inter alia, on ground that since company had been discharged from SICA vide order dated 29.06.2007, Board had no jurisdiction left over implementation of Scheme and company could no longer enjoy protection under Section 22(1) of SICA. On this application, order dated 09.04.2010 was passed by Board directing Revenue not to take any coercive action against company. It was also directed that unimplemented provisions of SS-02, particularly, paragraph 10-k thereof, should be implemented by DIT(R). 12) This order of Board was challenged by Revenue by filing appeal before Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as 'AAIFR'). In this Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 10 of 26 appeal, interim order dated 03.06.2010 was passed directing both parties to maintain status quo. According to Revenue, despite aforesaid order, Company invited online forward auction for land situated in Marol Industrial Area which forced Revenue to file MA No.448/2010 before Appellate Authority on 24.08.2010. In this application, Appellate Authority passed order suspending proposed online e-auction. appeal was ultimately decided by Appellate Authority on 31.01.2011. With other connected appeals, inter alia, ordering that Income Tax Department could not have initiated any coercive action for recovery of its dues against Company since unimplemented provisions of sanctioned rehabilitation scheme for unexpired period of scheme are still under implementation. 13) This order was challenged by Revenue by filing Writ Petition (C) No. 1875/2011 in High Court of Delhi. While aforesaid writ petition was pending certain other developments took place. Some dues of Central Excise Authority were also payable by company. Company had written few letters to Central Excise Authorities, in year 2010, stating that their manufacturing operation has become unviable because of fixed Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 11 of 26 overheads and consequently decision was taken to restructure business by entering into reality business. company also had filed Misc. Application No. 114/2011 with prayer to extend duration of rehabilitation period (originally fixed for eight years) by another one year. Due to delay caused in implementation of said Scheme because of coercive measures taken against company by Revenue this application was decided by Board on 31.03.2011. Board by detailed order recorded specific finding, based on material produced before it, that Tax Departments could not be held responsible for any delay in implementation of Scheme. It also held that once Company had been discharged under SICA on its net-worth turning positive in year 2007, provisions of Section 18(5) were not applicable and, therefore, any major modification by way of extension of time, was not permissible. 14) Against aforesaid order of Board, Company filed appeal before Appellate Authority. This appeal was, however, dismissed by Appellate Authority vide orders dated 29/30.06.2011 holding that Company was not entitled to get period of rehabilitation scheme extended. It specifically affirmed finding of Board that Company had violated Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 12 of 26 sanctioned scheme and that no modification of Scheme was possible. 15) aforesaid order of Board was by majority of 2:1. Whereas two members were of opinion that order of Board did not require any interference and gave their detailed reasoning in support of said view, Chairman of Board, who was retiring on same day, observed that he had no time to write detailed order but expressed his view that this case should be remanded back to Board for enquiry to be conducted regarding violation of clause 10(f)(b) of Sanctioned Scheme by Company entering into agreement for transfer/development of their property at Ville Parle. According to Chairman, as per para 9(5)(b) of sanctioned Scheme, there was provision for sale or development of any other surplus asset and plea of Company regarding extension of time needed detailed enquiry by Board. Notwithstanding these observations of Chairman, who was dissenting member, majority view was that appeal was bereft of any merit and order of Board did not suffer from any legal error and on this basis majority had dismissed appeal. Obviously effect was that appeal of Company stood dismissed. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 13 of 26 16) Knowing aforesaid consequence fully well and conscious of same viz. decision of Appellate Authority had gone against it, Company challenged order of Appellate Authority by filing Writ Petition No. 4614 of 2011. This writ petition was, however, dismissed as 'withdrawn' on 05.07.2011 and High Court gave two months' time for clearance of manufactured stock of goods and payment of excise duty on those goods. order was silent about income tax dues. reason for which withdrawal was sought is contained in following portion of said order of High Court. We have heard learned counsel for parties. Learned senior counsel for petitioner, on instructions, states that he would like to withdraw writ petition and application to pursue course suggested by majority view of AAIFR vide order dated 29.06.2001 for seeking modification of Scheme by approaching BIFR. With withdrawal of writ petition, order of Board, as affirmed by Appellate Authority, attained finality. 17) As noticed above, at that time, Writ Petition No. 1875 of 2011 filed by Revenue was pending in High Court. This petition was filed against order of Appellate Authority restraining Revenue from taking coercive action against Company for recovery of its dues on ground that unimplemented provision Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 14 of 26 of Sanctioned Rehabilitation Scheme for unexpired period of Scheme was still under implementation. This reason was no more in existence in view of aforesaid orders passed by Board as well as Appellate Authority refusing to give extension to Company in respect of sanctioned Scheme. purport and effect of those orders, clearly, was that Scheme had come to end and was no more in operation. Revenue, thus, filed detailed rejoinder affidavit in Writ Petition No. 1875 of 2011 bringing aforesaid development on record in said writ petition. 18) Notwithstanding aforesaid background, in writ petition preferred by Revenue, High Court has passed impugned orders dated 16.08.2011 dismissing writ petition with observations that appropriate remedy for petitioner is to move Board for lifting of bar under Section 22 of SICA. It is very brief order and entire reasoning on which said order is based can be found in following discussion by High Court. violation alleged by petitioners is broadly that respondent no. 1 has been indulging in sale of assets without defraying income tax liabilities in consonance with paragraph 9S(b) of sanctioned scheme. It is learned counsel's say that Department had not taken, in past, Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 15 of 26 coercive action for recovery of huge amounts of income tax dues in accordance with provisions of paragraph 10(k) of sanctioned scheme. It is submitted that this course of action of sale of assets to satisfy scaled down claim of petitioners in terms of scheme is not permissible. It is say of Department that since it is scheme of revival, respondent no. 1 ought not be allowed to sell assets without paying dues to Department. In our considered view, impugned orders cannot be faulted, which are, predicated on factual position at that stage of time. If grievance is, as is now sought to be urged before us; appropriate remedy for petitioner is to move BIFR for lifting of bar under Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985 by articulating before said forum factum of alleged violation of sanctioned scheme. 19) What follows from above is that High Court was convinced by reason that question as to whether Company had indulged in sale of assets unauthorisedly and in violation of para 9(5)(b) which is yet to be taken by Board. High Court also proceeded on palpably wrong presumption that sanctioned Scheme was still under operation and, therefore, bar under Section 22 of SICA applied. For this reason, it directed that only remedy left for Revenue was to approach Board for lifting of bar under Section 22 of SICA. From facts and events noted above, this premise and assumptions are clearly erroneous and contrary to record. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 16 of 26 20) In first instance, it is to be seen that Scheme had already expired on 31.03.2011. Application for extension of Scheme was filed before Board which was dismissed. reason given by Company seeking extension was that implementation of Scheme was delayed because of coercive tactics which Revenue had adopted against Company. This claim was found to be hollow and incorrect. Appellate Authority had upheld this order of Board, albeit by majority of 2:1. Thus, no Scheme was in operation. Another significant aspect which is to be kept in mind is that way back in year 2007, net worth of Company had turned positive and it was no more sick Company. Thus, Revenue had right to recover arrears of income tax after 2007 and in any case after 31.03.2011 when Scheme expired. 21) It may be pertinent to mention at this stage that Company has approached Board, after withdrawal of its Writ Petition No. 4614 of 2011 on ground that while withdrawing this petition High Court had permitted Company to seek recourse to Board in view of observations of majority opinion of Appellate Authority. Even this is erroneous. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 17 of 26 22) Appellate Authority dismissed appeal on merits. In course of discussion on various aspects and arguments that were raised before Appellate Authority, Appellate Authority noted that Company had taken steps to close unit which was rehabilitated under Sanctioned Scheme and to sell property thereof without obtaining prior approval of Board. It further observed that when those steps were taken, jurisdiction of Board over Company continued under Section 18(9) and Section 18(12) of SICA. In opinion of Appellate Authority, since Company had availed itself of and was continuously availing beneficial measures of SS-02, which included rehabilitation measures for Mumbai unit, it was obligatory on part of Company to seek and obtain prior permission of Board to close Mumbai unit, shift its plant and machinery to Vadodara and engage in reality business. Thus, while rejecting argument of Company that there was no violation of Scheme in dismantling Ville Parle Unit and selling its land and building, Appellate Authority took view that it had altered essential ingredients of SS-02 as result of which that Scheme stood mutilated and, therefore, seeking extension of such Scheme was untenable. While discussing this aspect, Appellate Authority, repelling Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 18 of 26 argument, also remarked as under: 12. only option available to company was to seek modification of scheme under Section 18(5) of SICA which had to be considered through appropriate procedure prescribed under SICA for seeking fresh commitments from concerned parties, as required. By these remarks Appellate Authority only pointed out breach committed by company in not taking prior permission and nowhere permitted company to resort to same even now as that opportunity was already lost. 23) It is aforesaid remarks, advantage whereof was taken by Company when orders dated 5th July, 2011 were passed in Writ Petition No. 4614 of 2011. Though, petition was withdrawn, counsel for Company made statement that Company would like to pursue course 'suggested' by majority view of Appellate Authority in its order dated 29 th June, 2001 for seeking modification of Scheme by approaching Board. No such suggestion or permission at all was given. It is stated at cost of repetition that aforesaid observations were made while dealing with particular argument of Company. That did not mean that aforesaid observations gave Company any liberty to approach Board even at this juncture. filing of such application by Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 19 of 26 Company before Board seeking modification is, therefore, totally untenable move on part of Company. Such application is not maintainable in law. 24) When matter is considered in this hue, keeping in mind aforesaid backdrop, impugned order passed by High Court in writ petition that was preferred by Revenue, is manifestly wrong and unsustainable. For reasons stated above, we are of view that Sanctioned Scheme (SS-02) has outlived its life which came to end on 31 st March, 2011. Revenue is, thus, entitled to recover its dues. 25) next question is about quantum of dues that Revenue has to recover from Company. 26) We may mention at this stage that during course of arguments, learned senior counsel appearing for Company stated that Company was ready to settle dues of Revenue and for this purpose it was agreeable for sale of its Ville Parle land under directions of this Court. It was also agreed that said sale may be carried out by monitoring agency, i.e., Canara Bank. learned senior counsel, however, vehemently questioned amount claimed by Revenue in Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 20 of 26 this behalf as it was submitted that demand of Rs. 761.35 crores on account of income tax dues as made by Revenue was not correct. On this aspect both sides made their detailed submissions. 27) By affidavit dated 02.05.2016 filed by Ms. Anita Sinha, Additional Director General (Recovery) C.B.D.T., following dues are claimed: a. Principal amount of tax Rs.81.66 crores b. Principal amount of Penalties Rs.83.29 crores c. Interest u/s. 220(2) till Rs.487.50 crores 30.04.2016 Total Rs.652.45 crores 28) This is revised figure given on 02.05.2016. As pointed out above, in special leave petition filed by Revenue, demand for sum of Rs. 761.35 crores was made. 29) On other hand, it is say of Company that demands were reduced at amount of Rs. 52.53 crores by April, 2012 itself. It was submitted that in reply filed by Revenue to I.A. 6 of 2014 filed by Company, latest position of tax demand and status of appeals was mentioned. Revenue had stated outstanding of Rs. 635.96 crores (principal amount of tax and penalty Rs. 164.96 crores + interest upto June, 2015 @ 471.01 crores). Referring to details in said chart, as per which demand was calculated by Revenue in respect of different Assessment Years, endeavour was made by Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 21 of 26 learned senior counsel for Company to show that even those demands were included where Company had succeeded and appeals filed by Department were pending before Income Tax Appellate Tribunal. It was, however, clarified by Mr. Maninder Singh, learned ASG appearing for Revenue that no doubt appeals have been filed by Revenue which are pending before ITAT, but disputed amount has not been included and only that amount which was payable as per order of CIT (Appeal), is included. 30) Another important submission, which needs consideration, advanced by Mr. Sundaram, learned senior counsel appearing for Company was that in Scheme which was approved by Board, Income Tax Department had agreed to waive interest and penalty and, therefore, it was not permissible for Department to include interest and penalty. particular clause in Scheme as sanctioned by Board reads as under: Q. Central Government CBDT/Income Tax ...... (b) to consider waiving interest and penalty, if any imposed and not to levy such interest and penalties during rehabilitation period. 31) It was argued that words 'to consider' are to be treated as mandate. It was submitted that expression 'to consider' in Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 22 of 26 similar Schemes approved by Board has been interpreted by various Division Benches of High Courts to mean that relief granted is mandatory and not merely recommendatory. Reference was made to judgment of Delhi High Court in Union of India v. CIMMCO Ltd. & Ors., bearing W.P.(C) No. 626 of 2014 and that of Madras High Court in Commissioner Income Tax-I, Chennai v. M/s. Tube Investments of India Ltd.-I, Chennai, bearing Tax Case (Appeal) Nos. 519 and 521 of 2005. 32) We are not deciding this issue in present appeal and permit parties to approach Board seeking clarification as to what was meant by words 'to consider' i.e., whether Board meant that it was mandatory on part of Revenue to waive interest and penalty or it was only recommendatory and, therefore, it was upto to Department to agree or not to agree to said request. jurisdiction of Board, whenever such application is filed, would be limited to aforesaid aspect alone and Board shall decide issue within period of two months. Otherwise, we make it clear that as Scheme has lapsed no further proceedings of any nature are to be entertained by Board including application for modification filed by Company and pending before Board. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 23 of 26 33) Income Tax Department shall be entitled to take steps for attachment of properties of Company, including Ville Parle land as per provisions of Income Tax Act and shall be entitled to sell same. If there are any secured creditors in respect of these properties, such attachment and sale shall be subject to rights of those creditors. Out of proceeds, Principal amount of tax due to Income Tax Department and even admitted excise dues shall be paid to Revenue. Insofar as payment of interest and penalty is concerned, that would be dependent upon decision which Board would give. 34) Before parting with, we may point out that M/s. Sheth Developers Private Limited and Suraksha Realty Limited have filed applications to intervene in matter as they submit that in respect of Ville Parle Land, MOU was entered into by Company with them. However, once it is found that such agreement was in violation of Scheme, arrangement with aforesaid interveners entered into by Company loses its legal force and no right would accrue to these interveners on basis of said agreements. We, thus, dismiss plea raised by intervener. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 24 of 26 35) Appeal stands allowed and disposed of on terms indicated above. ................................................J. (A.K. SIKRI) ................................................J. (R. K. AGRAWAL) NEW DELHI; MAY 12, 2016. Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 25 of 26 ITEM NO.1B COURT NO.12 SECTION IIIA (For judgment) S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS Civil Appeal No. 5038 of 2016 (Arising out of SLP (C) No. 26747 of 2012) (Arising out of impugned final judgment and order dated 16/08/2011 in WP No. 1875/2011 passed by High Court Of Delhi At New Delhi) DIRECTOR GENERAL OF I.T.(ADMN.) & ANR. ... Appellants VERSUS M/S. GTC INDUSTRIES LTD.& ANR. ... Respondents Date : 12/05/2016 This matter was called on for pronouncement of judgment today. For Petitioner(s) Mr. Maninder Singh, ASG. Mr. Prabhas Bajaj, Adv. Mr. S. A. Haseeb, Adv. Ms. Sadhna Sandhu, Adv. Mr. Nalin Kohli, Adv. Mr. Rohan Jaitley, Adv. Mrs. Anil Katiyar, Adv. For Respondent(s) Mr. Rudreshwar Singh, Adv. Mr. Gopal Jha, Adv. Mr. Gautam Singh, Adv. Mr. Kaushik Poddar, Adv. Hon'ble Mr. Justice A. K. Sikri pronounced judgment of Bench comprising His Lordship and Hon'ble Mr. Justice R. K. Agrawal. Leave granted. appeal stands allowed in terms of signed reportable judgment. (Nidhi Ahuja) (Tapan Kr. Chakraborty) Court Master Court Master [Signed reportable judgment is placed on file.] Civil Appeal No. 5038 of 2016 (arising out of SLP (C) No. 26747 of 2012) Page 26 of 26 Director General of Income-tax (Admn.) & Anr. v. M/s. GTC Industries Ltd. & Anr