TaxTMI 
TaxTMI 
2021 (2) TMI 390
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....account of the Respondent No.4 - M/s. Deccan Chronicles Holding Limited, was declared as a Non-Performing Asset ("NPA") on 31st December 2012. Thereafter, proceedings were initiated before the Debt Recovery Tribunal by the Petitioner against Respondent No. 4 and a recovery certificate was issued in its favour by the DRT. Further, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereafter referred as "SARFAESI Act") was also taken by the Petitioner Bank, which at that stage was called the Andhra Bank. 5. During the pendency of the SARFAESI proceedings, Canara Bank, one of the lenders to the said debtor/ Respondent No. 4, approached the National Company Law Tribunal, Hyderabad (hereinafter referred as NCLT") under Section 7 of The Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the "IBC") for initiation of the Corporate Insolvency Resolution Process (hereinafter referred as "CIRP") against the debtor. The Resolution plan, submitted by the SREI Multiple Asset Investment Trust- Vision India Fund was finally approved by the NCLT on 3rd June, 2019. 6. However, while the implementation of the resol....
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.... Plan and objections is completed before the Ld. Adjudicating Authority and the Resolution Plan is approved, such approved Resolution Plan is binding on all stakeholders, including all government agencies. The provision of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 by which Section 31(1) was amended, makes it amply clear that a resolution plan is binding on Central Government and all statutory authorities. 5) It is submitted that if any Corporate Debtor is undergoing investigation by the Central Bureau of Investigation ("CBI"), Serious Fraud Investigation Office ("SFIO") and/ or the Directorate of Enforcement ("ED"), such investigations are separate and independent of the Corporate Insolvency Resolution Process ("CIR Process") under the IBC and both can run simultaneously and independent of each other. It is further submitted that the erstwhile management of a company would be held responsible for the crimes, if any, committed under their regime and the new management taking over the company after going through the IBC process cannot be held responsible for the acts of omission and commission of the previous management. In other words, no criminal liability c....
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....er PMLA is free to deal with or attach the personal assets of the erstwhile promoters and other accused persons, acquired through crime proceeds and not the assets of the Corporate Debtor which have been financed by creditors and acquired by a bona fide third party Resolution Applicant through the statutory process supervised and approved by the Adjudicating Authority under the IBC. In so far as a Resolution Applicant is concerned, they would not be in wrongful enjoyment of any proceeds of crime after acquisition of the Corporate Debtor and its assets, as a Resolution Applicant would be a bona fide assets acquired through a legal process. Therefore, upon an acquisition under a CIR Process by a Resolution Applicant, the Corporate Debtor and its assets are not derived or obtained through proceeds of crime under the Prevention of Money Laundering Act, 2002 ("PMLA) and need not be subject to attachment by the ED after approval of Resolution Plan by the Adjudicating Authorities." 8. Mr. Zoheb Hossain, ld. counsel appearing for the ED, at the outset, submits that this Court does not have jurisdiction to entertain the present writ petition in view of the judgement of the ld. Division B....
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....the working of the code, the interests of all stakeholders including most importantly the imperative need to attract resolution applicants who would not shy away from offering reasonable and fair value as part of the resolution plan if the legislature thought that immunity be granted to the corporate debtor as also its property, it hardly furnishes a ground for this this Court to interfere. The provision is carefully thought out. It is not as if the wrongdoers are allowed to get away. They remain liable. The extinguishment of the criminal liability of the corporate debtor is apparently important to the new management to make a clean break with the past and start on a clean slate. We must also not overlook the principle that the impugned provision is part of an economic measure. The reverence courts justifiably hold such laws in cannot but be applicable in the instant case as well. The provision deals with reference to offences committed prior to the commencement of the CIRP. With the admission of the application the management of the corporate debtor passes into the hands of the Interim Resolution Professional and thereafter into the hands of the Resolution Professional subject und....