https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=461938 https://www.taxtmi.com/caselaws?id=461938 Provisional attachment order - Mutual interplay between two statutes, PMLA and IBC - whether the provisions of attachment under Section of the PMLA are circumscribed by the IBC, in particular Section 32-A thereof? - HELD THAT:- In the present case, in view of the operation of Section 32-A(2)of the IBC, no action can be taken against the property of a corporate debtor in relation to an offence committed prior to the commencement of the CIRP of the corporate debtor, where such property is covered under a Resolution Plan approved by the Adjudicating Authority under Section 31 of the IBC, which results in the change in control of the corporate debtor to a person, or sale of liquidation assets to an entity who was not a promoter or in the management or control of the corporate debtor or is related to such person - The yardsticks of Section 32-A squarely apply to the present case, since the petitioner no.2, the successful resolution applicant, cannot be held liable, as envisaged under Section 32-A of the IBC, for any offence committed prior to the commencement of the CIRP. In the present case, the allegations levelled against the corporate debtor (petitioner no.1) admittedly happened much prior to the commencement of the CIRP and, as such, fall within the specified exclusion contemplated in Section 32-A. As such, it cannot but be observed that the provisional order of attachment dated February 16, 2022 and all consequential actions, including any order which might have been passed under Section 8(3) of the PMLA, are prima facie vitiated and de hors the lawful authority of the respondents. The Supreme Court, in Vijay M. Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], which were specifically relied on by the Respondent/Enforcement Directorate in the instant lis, deal with the interpretation of Sections 5 and 8 of the PMLA, which is not a relevant consideration in the instant case, since the vires of those Sections are not challenged - In the case at hand, however, the comparison is between the PMLA of 2002 and the subsequent IBC of 2016. Hence, the analogy and precedentiary value of Vijay Madanlal Choudhary (supra) are entirely inapplicable to the instant case. Moreover, Section 5 of the 1973 Code was considered by the Supreme Court. It envisages that nothing in the 1973 Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force - Thus, it cannot but be said that the reliance placed by the ED on the said decision is misplaced in the present context. Conclusion - The yardsticks of Section 32-A squarely apply to the present case, since the petitioner no.2, the successful resolution applicant, cannot be held liable, as envisaged under Section 32-A of the IBC, for any offence committed prior to the commencement of the CIRP. The writ petition is required to be heard on merits on the above questions. Case-Laws IBC Fri, 26 Aug 2022 00:00:00 +0530