Liquidator's Asset Release Bid Denied; PMLA Proceedings Unaffected by Section 14 of I&B Code, Appeal Dismissed.

The Adjudicating Authority dismissed the Liquidator's application for asset release, emphasizing that PMLA proceedings are not subject to Section 14 of the I&B Code. The judgment distinguished between penal actions under the PMLA and the I&B Code, affirming that attachments made before insolvency proceedings do not benefit the Resolution Professional. The appeal was dismissed, aligning with principles from the Varrsana Ispat Limited case.

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Issues:
1. Corporate Insolvency Resolution Process leading to liquidation.
2. Investigation under the Prevention of Money Laundering Act, 2002.
3. Provisional attachment of properties under the PMLA.
4. Application for release of assets by the Liquidator.
5. Interpretation of Section 9 of the PMLA.
6. Application of Section 14 of the Insolvency and Bankruptcy Code.
7. Consideration of penal actions under the PMLA and I&B Code.

Corporate Insolvency Resolution Process leading to liquidation:
The Bank of Baroda initiated the Corporate Insolvency Resolution Process against Rotomac Global Private Limited, which resulted in the liquidation of the Corporate Debtor due to the absence of a viable resolution plan.

Investigation under the Prevention of Money Laundering Act, 2002:
The Directorate of Enforcement initiated an investigation under the PMLA based on information from the CBI, finding misappropriation of bank funds, criminal breach of trust, and money laundering by accused persons related to the Corporate Debtor.

Provisional attachment of properties under the PMLA:
The Directorate of Enforcement provisionally attached properties of the Corporate Debtor under the PMLA, preventing any transfer or disposal until authorized, as these properties were considered proceeds of crime.

Application for release of assets by the Liquidator:
The Liquidator filed an application seeking the release of the Corporate Debtor's assets, contending that the properties were encumbered due to mortgages and charges in favor of banks and lenders.

Interpretation of Section 9 of the PMLA:
The dispute centered on the interpretation of Section 9 of the PMLA, which vests property confiscated under the Act in the Central Government free from encumbrances, raising questions about the rights of secured creditors.

Application of Section 14 of the Insolvency and Bankruptcy Code:
The Adjudicating Authority rejected the Liquidator's application, citing Section 14 of the I&B Code, which was further analyzed in light of the Varrsana Ispat Limited case, concluding that the PMLA proceedings were not subject to Section 14.

Consideration of penal actions under the PMLA and I&B Code:
The judgment clarified that the PMLA's penal actions, including confiscation and imprisonment, were distinct from the I&B Code, emphasizing that individuals involved in money laundering could not seek protection under the I&B Code, and attachments made prior to insolvency proceedings did not benefit the Resolution Professional. The appeal was dismissed based on the principles established in the Varrsana Ispat Limited case.

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