Special statute attachment proceedings cannot be challenged in insolvency fora; moratorium and liquidation estate provisions do not override benami law.

A special statute creating an exclusive mechanism for provisional attachment, adjudication, confiscation and appeal over benami property cannot be displaced by insolvency proceedings. Section 60(5) of the Insolvency and Bankruptcy Code does not authorise the NCLT or NCLAT to sit in judicial review over orders passed under an independent enactment. The moratorium under Section 14 protects the corporate debtor from creditor actions, but does not automatically bar sovereign proceedings in rem under the Benami Act. Property found to be benami does not form part of the liquidation estate under Section 36, and Section 32A does not alter that position or cure defective title.

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Issues: Whether an attachment and adjudication order passed under the Prohibition of Benami Property Transactions Act, 1988 could be challenged before the National Company Law Tribunal or National Company Law Appellate Tribunal under the Insolvency and Bankruptcy Code, 2016, including on the basis of moratorium and liquidation-estate provisions.

Analysis: The Benami Act creates a complete statutory mechanism for identifying benami property, provisionally attaching it, adjudicating the question, confirming attachment, confiscating the property and providing a separate appellate hierarchy. Proceedings under that Act operate in the public law domain and are directed against tainted property as a sovereign statutory action, not as creditor-driven recovery. The Insolvency and Bankruptcy Code is likewise a complete code, but its jurisdiction under Section 60(5) extends only to disputes arising out of or in relation to insolvency and does not permit the insolvency fora to sit in judicial review over orders passed under an independent special statute. The moratorium under Section 14 protects the corporate debtor from creditor actions and does not automatically bar sovereign proceedings in rem under the Benami Act. Likewise, the liquidation estate under Section 36 comprises only property beneficially owned by the corporate debtor, and benami property found to belong to another does not become part of that estate. Section 32A does not alter this position or validate defective title.

Conclusion: The challenge to the Benami Act attachment was not maintainable before the insolvency fora and the Benami Act remedy had to be pursued before the statutory authorities under that Act.

Ratio Decidendi: Where a special statute provides an exclusive adjudicatory and appellate mechanism for attachment and confiscation of property, insolvency fora under the Insolvency and Bankruptcy Code cannot be used to question that sovereign action, and Section 60(5) cannot be invoked to bypass the statutory forum created by the special enactment.

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