2019 (7) TMI 578

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....olvency and Bankruptcy Code, 2016 ("I&B Code" for short) filed by the Respondents have been admitted. 2. Learned counsel for the Appellant submitted that 'Securities and Exchange Board of India' having already taken action against the 'Corporate Debtor', the application under Section 7 was not maintainable. The contesting Respondent is also not a 'Financial Creditor'. 3. Learned counsel appearing on behalf of the 1st & 35th Respondents submitted that the 'Corporate Debtor' illegally collected money to the tune of Rs. 1136 Crores under its unauthorised 'Collective Investment Schemes'. A recovery Certificate dated 14th September, 2017 for an amount of Rs. 1136 Crores was drawn up against the 'Corporate Debtor' pursuant to orders passed by the 'Securities and Exchange Board of India' as confirmed by the 'Securities Appellate Tribunal'. Thereafter, the immovable properties held by the 'Corporate Debtor' were attached vide order dated 29th September, 2017 passed by the Recovery Officer, 'Securities and Exchange Board of India', Northern Regional Office, New Delhi. 4. It was further submitted that the group of investors ('Financial Creditors') including the contesting Respondent....

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....e interim resolution professional,- (a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional; xxx                                                                   xxx                                                                   xxx (2) The interim resolution professional vested with the management of the corporate debtor shall- xxx                      &n....

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....ceed to recover from such person the amount specified in the certificate by one or more of the following modes, namely:- (a) attachment and sale of the person's movable property; (b) attachment of the person's bank accounts; (c) attachment and sale of the person's immovable property; (d) arrest of the person and his detention in prison; (e) appointing a receiver for the management of the person's movable and immovable properties, and for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time, in so far as may be, apply with necessary modifications as if the said provisions and the rules made thereunder were the provisions of this Act and referred to the amount due under this Act instead of to income-tax under the Income-tax Act, 1961. Explanation 1.- For the purposes of this subsection, the person's movable or immovable property or monies held in bank accounts shall include any property or monies held in bank accounts which has been transferred direct....

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....tion of Section 14 of the 'I&B Code'. 18. Section 238 of the 'I&B Code' is overriding provision and reads as follows: "238. Provisions of this Code to override other laws.-The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 19. Section 28A of the 'SEBI Act, 1992' being inconsistent with Section 14 of the 'I&B Code', we hold that Section 14 of the 'I&B Code' will prevail over Section 28A of the 'SEBI Act, 1992' and 'Securities Exchange Board of India' cannot recover any amount including the penalty from the 'Corporate Debtor'. The 'Bombay Stock Exchange' for the same very reason cannot take any coercive steps against the 'Corporate Debtor' nor can threaten the 'Corporate Debtor' for suspension of trading of shares. 20. The 'Bombay Stock Exchange' deals with the shares. The shares of the 'Corporate Debtor', if listed with the 'Bombay Stock Exchange', can be dealt with by the 'Bombay Stock Exchange'. However, in view of Section 18 of the 'I&B Code', the 'Interim Resolution Professional' while t....