Appeal allowed, impugned order set aside; liquidator granted liberty. Clarification on IBC vs WBPIDFE Act

The appeal was allowed, and the impugned order was set aside, with the liquidator given the liberty to take further legal actions. The judgment clarified the interplay between the IBC and WBPIDFE Act, emphasizing the latter's provisions in cases of fraudulent deposits.

---

---

Issues Involved:
1. Attachment of Corporate Debtor's property under WBPIDFE Act.
2. High Court of Calcutta's direction regarding Corporate Debtor's assets.
3. Inconsistency between WBPIDFE Act and IBC provisions.

Detailed Analysis:

Issue 1: Attachment of Corporate Debtor's Property under WBPIDFE Act
The properties of the Corporate Debtor (M/s Pincon Spirits Ltd.) were attached in connection with fraudulent transactions by Pincon Group Companies, which included the Corporate Debtor. The Directorate of Economic Offences (DEO), WB, attached and sealed the properties under Section 3 of the WBPIDFE Act. The Designated Court of Economic Offences found that the properties were acquired using fraudulent deposits and thus ordered their confiscation. The court held that the Corporate Debtor was involved in the fraudulent activities and that the properties could be attached under the WBPIDFE Act. The judgment emphasized that the Corporate Debtor had not raised any objections under Section 14(3) of the WBPIDFE Act, making the findings of the Designated Court binding on the Corporate Debtor.

Issue 2: High Court of Calcutta's Direction Regarding Corporate Debtor's Assets
The judgment clarified that the High Court of Calcutta did not direct the de-attachment of the Corporate Debtor's assets. The High Court's order dated 23.04.2019 only required the DEO, WB, to disclose particulars of all attached assets except those of M/s Pincon Spirits Ltd. and M/s Greenage Food Products Ltd. The Adjudicating Authority's interpretation that the High Court directed to keep the Corporate Debtor's assets outside the purview of sale was found to be incorrect. The High Court had also directed the sale of certain assets of the Corporate Debtor to be held in a fixed deposit account, indicating no blanket exemption from attachment or sale.

Issue 3: Inconsistency between WBPIDFE Act and IBC Provisions
The judgment analyzed whether Section 14 (moratorium) and Section 33(5) of the IBC have an overriding effect on Section 3 of the WBPIDFE Act. Section 14 of the IBC relates to the declaration of a moratorium, which prohibits certain actions against the Corporate Debtor during the insolvency process. However, the court held that the WBPIDFE Act, which deals with fraudulent deposits and provides for penal actions, operates in a different legislative field with a distinct aim of protecting depositors' interests. The court concluded that the IBC's moratorium does not apply to criminal proceedings or actions under the WBPIDFE Act. Additionally, Section 32-A of the IBC, which provides immunity to the Corporate Debtor's properties under certain conditions, was not applicable as no resolution plan was approved in this case.

The judgment ultimately set aside the Adjudicating Authority's order directing the DEO, WB, to de-attach the properties, emphasizing that the properties were already confiscated by the Designated Court and were not in the DEO, WB's possession. The liquidator was advised to pursue appropriate legal actions available under the WBPIDFE Act.

Conclusion:
The appeal was allowed, and the impugned order was set aside, with the liquidator given the liberty to take further legal actions. The judgment clarified the interplay between the IBC and WBPIDFE Act, emphasizing the latter's provisions in cases of fraudulent deposits.

---