2019 (4) TMI 1724

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....d under Section 14 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short), relevant portion of which reads as follows: "It is to be clarified that Section 10 application was admitted on the application of the Corporate Applicant, i.e. Corporate Debtor, now he seeks exemption from statutory compliances as required by the Stock Exchange and Central Depository Services (India) Ltd. and National Securities Depository Services (India) Ltd. It is pertinent to mention that in Section 14 it is specifically mention that in which area moratorium order shall be effective. Regulatory Authority are not covered under the moratorium order as provided U/S 14 of I&B Code. Given the moratorium issued under Section 14 of the I&B Code, 2016, Regulatory Authorities are not debarred from enforcing the Regulations as prescribed under Rules. Bombay Stock Exchange, under SEBI (LODR) Regulation, 2015 or Central Depository Services (India) Ltd. and National Securities Depositary Stocks India Limited are not barred from compelling the Corporate Debtor company to comply with the Regulations as prescribed under Rules. The CA is not maintainable Hence rejected at the very threshold.....

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....rovisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;" 11. Section 17 while deals with 'management of affairs of 'Corporate Debtor' by 'Interim Resolution Professional'. Sub-section (2) of Section 17 empowers the 'Interim Resolution Professional' to act in terms of the provisions therein including clause (e) of Section 17(2) which reads as follows: 17. Management of affairs of corporate debtor by interim resolution professional.-(1) From the date of appointment of the interim resolution professional,- (a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional; xxx                               &nb....

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....due to the Board, the Recovery Officer may draw up under his signature a statement in the specified form specifying the amount due from the person (such statement being hereafter in this Chapter referred to as certificate) and shall proceed 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, 196....

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....t, decree or order in any court of law, tribunal, arbitration panel or other authority is prohibited. 17. Thus, we find that Section 28A of the SEBI Act, 1992 including sub-Section (3) therein is in contravention 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 Debto....