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40. Attention is drawn to the fact that in the meeting held on 21st June, 2017 the JLF had formally invoked S4A Scheme thereby waiving and abandoning its right to initiate recovery proceedings following the purported decision taken in the meeting held on 8th February, 2017. The appellant therefore states that the learned Single Judge‟s decision to uphold the action of the respondent banks in initiating recovery proceedings is completely unjustified and misconceived.

41. The appellant has sought to distinguish the Judgment of the Supreme Court Innoventive Industries Ltd. v. ICICI Bank and Anr. 2018 1 SCC 407 by contending that Section 238 of IBC cannot override Section 35AA and 35AB of the Act of 1949, which was introduced after the enactment of IBC, 2016. The learned Single Judge had relied on the said judgment to state that in view of Section 238 of IBC, insolvency proceedings once initiated cannot be interdicted. It is their case that Section 238 will have no application in respect of laws which have been enacted and brought into force by the Parliament after the enactment of IBC, 2016. Reliance is placed on Shri Ram Narain v. The Simla Banking and Industrial Company Ltd. AIR 1956 SC 614.

58. He would further submit that Section 238 of IBC cannot override Section 35AB of the Act of 1949 and the Circulars issued thereunder inasmuch as Section 238 seeks to override such laws that stood in force as on date of enactment of IBC, whereas Section 35AB had been introduced in the year 2017, i.e., after the enactment of IBC, 2016. Reliance is placed on Shri Ram Narain (Supra) and Ajoy Kumar Banerjee v. Union of India and Ors. (1984) 3 SCC 127. Reiterating the stand already adopted regarding reliance placed by the learned Single Judge on Innoventive (supra), Mr. Sibal would further submit that the Supreme Court therein merely declared supremacy of IBC over Maharashtra Relief Undertaking Act, 1958 which is admittedly hit by Section 238 unlike Section 35AB in the present case. Moreover, the appellant herein had at the very first instance raised dispute with the RBI vide letters dated 20th January, 2017 and 17th March, 2017 with regard to failure to release additional funds, which is quite unlike the situation in Innoventive (Supra).

79. Mr. Srinivasan submits that the case of Innoventive Industries (Supra) is squarely applicable to the facts of the present case inasmuch as the Clause 5.1 (t) of the JLRA is identically worded as a subject clause that was considered in the said case. Merely because the appellant herein had raised the issue of non-provision of additional funds right at the threshold, it would not mean that its unconditional obligation to pay dues had been rendered ineffective. Further the appellant‟s argument that Section 238 of IBC would not override Sections 35AA and 35AB of the Act of 1949 simply because the same were enacted after enactment of IBC, is based on a principle of interpretation of statutes, however the said principle has consistently been held to be subject to the exception that a general provision cannot derogate a special one. Reliance is laid on Yakub Abdul Razak Memon v. State of Maharashtra, 2013, 13 SCC 1.

(xi) Section 238 of the IBC cannot override Section 35AB of the Act of 1949 and the Circulars issued thereunder inasmuch as Section 238 seeks to override such laws that stood in force on the date of enactment of IBC, whereas Section 35AB was introduced in the year 2017.

(xii) Reliance placed by the ld. Single Judge on the Judgement of the Supreme Court on Innoventive (Supra) is misconceived, inasmuch as the Supreme Court had only declared supremacy of the IBC over Maharashtra Relief Undertaking Act, 1958 which is admittedly hit by Section 238 unlike Section 35AB in the present case.