TaxTMI 
TaxTMI 
2022 (2) TMI 583
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.... by the 'Adjudicating Authority' (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad Court No.2). 2. Earlier, the 'Adjudicating Authority' (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad Court No.2) while passing the impugned order in IA 81/2020 in CP(IB)No.397/NCLT AHM/2018 (Filed by the Anil Kumar, IRP of KSL & Industries Ltd under Sections 14, 18, 25 and 60(5) of the I&B Code 2016) at paragraph 11 to 14 had observed the following:- 11."The Hon'ble High Court of Madras has recently dealt with the issue, in the matter of Deputy Director, Office of the Joint Director, Directorate of Enforcement Vs. Asset Reconstruction Company )India_ Ltd and others (Writ Petition No.29970 of 2019 and WMP Nos 29872 & 34971 of 2019), wherein, the Hon'ble High Court of Madras, observed that "NCLT has no jurisdiction to go into the matters governed under the Prevention of Money Laundering Act, 2001 (PMLA) and, therefore, Section 14, having consequent upon an order passed by the Adjudicating Authority declaring moratorium, would not apply to the PMLA which is a distinct and special statute having its own objective and as such Section 14 would not bar a proceeding under the....
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....d to the same issue: Jurisdiction and the powers of the High Court under Article 226 13. What is recognized by Article 226(1) is the power of every High Court to issue (i) directions, (ii) orders or (iii) writs. They can be issued to (i) any person or (ii) authority including the Government. They may be issued (i) for the enforcement of any of the rights conferred by Part III and (ii) for any other purpose. But the exercise of the power recognized by Clause (1) of Article 226, is restricted by the territorial jurisdiction of the High Court, determined either by its geographical location or by the place where the cause of action, in whole or in part, arose. While the nature of the power exercised by the High Court is delineated in Clause (1) of Article 226, the jurisdiction of the High Court for the exercise of such power, is spelt out in both Clauses (1) and (2) of Article 226. 24. Therefore in so far as the question of exercise of the power conferred by Article 226, despite the availability of a statutory alternative remedy, is concerned, Anisminic cannot be relied upon. The distinction between the lack of jurisdiction and the wrongful exercise of the available j....
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....pect of which, it is called upon to administer. Hence, let us now see the jurisdiction and powers conferred upon NCLT." Scope of Section 60 of IBC:- "37. From a combined reading of Subsection (4) and Sub section (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the government under the provisions of MMDR Act, 1957 and the Rules issued thereunder. The only provision which can probably throw light on this question would be Sub section (5) of Section 60, as it speaks about the jurisdiction of the NCLT. 13. The learned single Judge of the Delhi High Court in the Deputy Director, Directorate of Enforcement Delhi and others V. Axis Bank and others (Manu/DE/1120/2019) has dealt with the similar issue in extenso. Ultimately, the following conclusion has been arrived at. "171.(i) The process of attachment (leading to confiscation) of proceeds of crime under PMLA is in the nature of civil sanction which runs parallel to investigation and criminal action vis-a-vis the offence of money-laundering..... (vi)The objective of PMLA being disti....
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.... 3. Three First Information Reports dated 12.08.2015, 13.05.2016 and 25.05.2016 were filed by numerous Banks under Section 120-B r/w 420 of the Indian Penal Code and 13(2) r/w 13(1) of the Prevention of Corruption Act, 1988 against M/s ACTIF Corporation Ltd, M/s Jaybharat Textiles, M/s Krishna Knitwear Technology Ltd and M/s Eskay Knot (India) Ltd and the same were forwarded to the CBI BS&FC Cell through letter dated 26.08.2016. 4. According to the Respondent, the 'First Information Reports' revealed that the said Group Companies of the Tayal Group had acquired loan facilities aggregating Rs. 524.61 crores wherein the funds were laundered through a maze of fictitious companies. Based on the 'First Information Reports' the Respondent had recorded ECIR No. KLZO/14/2016 dated 19.10.2016 and initiated an investigation under the Prevention of Money Laundering Act, 2002. 5. It is the version of the Respondent that during the course of investigation it came to light that M/s KSL & Industries was a 'Group Company of Tayal Group' and the 'Competent Authority' passed a 'Provisional Attachment Order' (PAO) on 08.05.2019 as per Section 5 of the Prevention of Money Laundering Act, 2002 t....
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....n admission of the 'Application' seeking initiation of the CIRP on 06.09.2019, the 'moratorium' had commenced, thereby imposing 'stay' on any kind of proceedings. As such, it is the plea of the Appellant that the 'Attachment Proceedings' and its resultant order under PMLA being Civil Proceedings should have been stayed with effect from 06.09.2019. 10. The Learned Counsel for the Appellant proceeds to point out that the Appellate Tribunal, PMLA in Bank of India V. the Deputy Director of Enforcement of Mumbai, reported in 2019 SCC OnLine ATPMLA 23 at paragraph 44 to 46 had observed the following:- 44."This Tribunal is of the considered opinion that the proceeding u/s 8 of the PMLA , 2002 before the Adjudicating Authority is a civil proceeding and the Adjudicating Authority should have stayed the proceedings on passing of the moratorium order by the NCLT. The continuation of the proceedings from the date of commencement of the moratorium order is contrary to the intention of the legislature hence the consequential order of confirmation of PAO is contrary to law. In the facts of the present case, it appears that hurdle has been created in the process after passing the order....
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....hich may not be in the possession of the 'Corporate Debtor' which shall thereafter, vest with the 'Resolution Professional' as per Section 23 (2) of the I&B Code, 2016. 12. The Learned Counsel for the Appellant takes a stand that the 'Adjudicating Authority' (National Company Law Tribunal) had failed to appreciate that the 'Object of Attachment' as per Section 5 of the Prevention of Money Laundering Act, 2002 is only to prevent the 'Management of the Corporate Debtor', from creating any third party right. Moreover, it is projected on the side of the Appellant that once 'CIRP' is initiated, the IRP/'Resolution Professional' takes 'Control of the Properties of the Corporate Debtor'. Besides this, no third party right can be created after the commencement of 'CIRP' without adhering to the specified procedure, as envisaged under the Code. 13. The Learned Counsel for the Appellant projects an argument that the 'Non-Obstante Clause' contained in the I&B Code, 2016, shall prevail over the Prevention of Money Laundering Act, 2002, as the I&B Code, 2016 being a 'later statute' and refers to the decision of the Hon'ble Supreme Court in Solidaire India Ltd V Fair Growth Financial Servic....
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.... conclusion that the Special Court Act being a later enactment would prevail. The head-note which brings out succinctly the ratio of the said decision is as follows : "Where there are two special statutes which contain non-obstante clauses the later statute must prevail. This is because at the time of enactment of the later statute, the Legislature was aware of the earlier legislation and its non-obstante clause. If the Legislature still confers the later enactment with a non-obstante clause it means that the Legislature wanted that enactment to prevail. If the Legislature does not want the later enactment to prevail then it could and would provide in the later enactment that the provisions of the earlier enactment continue to apply." 14. The Learned Counsel for the Appellant relies on the Judgement in Punjab National Bank Vs. Dy. Director, Directorate of Enforcement, Raipur (Decided on 02.01.2019) reported in 2019 SCC OnLine ATPMLA 5 wherein at paragraph 67 and 68 it is observed as under:- 67. "This Tribunal is of the considered opinion that the proceeding u/s 8 of PMLA,2002 before the Adjudicating Authority is a civil proceeding and the Adjudicating Authority....
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....e Resolution Plan, so approved, must result in the change in the management or control of the corporate debtor; 329 iii. The change in the management or control, under the approved Resolution Plan, must not be in favour of a person, who was a promoter, or in the management and control of the corporate debtor, or in favour of a related party of the corporate debtor; iv. The change in the management or control of the corporate debtor must not be in favour of a person, with regard to whom the relevant Investigating Authority has material which leads it to entertain the reason to believe that he had abetted or conspired for the commission of the offence and has submitted or filed a Report before the relevant Authority or the Court. This last limb may require a little more demystification. The person, who comes to acquire the management and control of the corporate person, must not be a person who has abetted or conspired for the commission of the offence committed by the corporate debtor prior to the commencement of the CIRP. Therefore, abetting or conspiracy by the person, who acquires management and control of 330 the corporate debtor, under a Resolution Plan, which is approved under....
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.... reading of the various limbs of sub-Section (1) would show that while, on the one hand, the corporate debtor is freed from the liability for any offence committed before the commencement of the CIRP, the statutory immunity from the consequences of the commission of the offence by the corporate debtor is not available and the criminal liability will continue to haunt the persons, who were in in-charge of the assets of the corporate debtor, or who were responsible for the conduct of its business or those who were associated with the corporate debtor in any manner, and who were directly or indirectly involved in the commission of the offence, and they will continue to be liable. 254. Coming to sub-Section (2) of Section 32A, it declares a bar against taking any action against property of the corporate debtor. This bar also contemplates the connection between the offence committed by the corporate debtor before the commencement of the CIRP and the property of the corporate debtor. This bar is conditional to the property being covered under the Resolution Plan. The further requirement is that a Resolution Plan must be approved by the Adjudicating Authority and, finally, the ap....
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....tor for the offence committed under the CIRP, will cease; (ii) The property of the corporate debtor is protected from any legal action again subject to the safeguards, which we have indicated. The bar against action against the property, is available, not only to the corporate debtor but also to any person who acquires property of the corporate debtor under the CIRP or the liquidation process. (iii) The bar against action against the property of the corporate debtor is also available in the case of a person subject to the same limitation as prescribed in sub-Section (1) and also in subSection (2), if he has purchased the property of the corporate debtor in the proceedings for the liquidation of the corporate debtor. 255. The last segment of Section 32A makes it obligatory on the part of the corporate debtor or any person, to whom immunity is provided under Section 32A, to provide all assistance to the Investigating Officer qua any offence committed prior to the commencement of the CIRP 256. The contentions of the petitioners appear to be that this provision is constitutionally anathema as it confers an undeserved immunity for the property which w....
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....nagement of the corporate debtor passes into the hands of the Interim Resolution Professional and thereafter into the hands of the Resolution Professional subject undoubtedly to the control by the Committee of Creditors. As far as protection afforded to the property is concerned there is clearly a rationale behind it. Having regard to the object of the statute we hardly see any manifest arbitrariness in the provision. 258. It must be remembered that the immunity is premised on various conditions being fulfilled. There must be a resolution plan. It must be approved. There must be a change in the control of the corporate debtor. The new management cannot be the disguised avatar of the old management. It cannot even be the related party of the corporate debtor. The new management cannot be the subject matter of an investigation which has resulted in material showing abetment or conspiracy for the commission of the offence and the report or complaint filed thereto. These ingredients are also insisted upon for claiming exemption of the bar from actions against the property. Significantly every person who was associated with the corporate debtor in any manner and 340 who was dir....
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....ieving resolution as a going concern as well, which is likely to maximize value for all stakeholders. In other jurisdictions too, a moratorium may be put in place on the advent of formal insolvency proceedings, including liquidation and reorganization proceedings. The UNCITRAL Guide notes that a moratorium is critical during reorganization proceedings since it facilitates the continued operation of the business and allows the debtor a breathing space to organize its affairs, time for preparation and approval of a reorganization plan and for other steps such as shedding unprofitable activities and onerous contracts, where appropriate." xxx xxx xxx "8.11. Further, the purpose of the moratorium is to keep the assets of the debtor together for successful insolvency resolution, and it does not bar all actions, especially where countervailing public policy concerns are involved. For instance, criminal proceedings are not considered to be barred by the moratorium, since they do not constitute "money claims or recovery" proceedings. In this regard, the Committee also noted that in some jurisdictions, laws allow regulatory claims, such as those which are not designed to collect mon....
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....Section 138 would somehow escape the dragnet of Section 14(1). While Section 14(1)(a) refers to monetary liabilities of the corporate debtor, Section 14(1)(b) refers to the corporate debtor's assets, and together, these two clauses form a scheme which shields the corporate debtor from pecuniary attacks against it in the moratorium period so that the corporate debtor gets breathing space to continue as a going concern in order to ultimately rehabilitate itself. Any crack in this shield is bound to have adverse consequences, given the object of Section 14, and cannot, by any process of interpretation, be allowed to occur." 18. The Learned Counsel for the Appellant refers to the judgment of this Tribunal in Directorate of Enforcement Vs Manoj Kumar Aggarwal and Others 2021 SCC OnLine NCLAT 121 wherein at paragraph 61, 62 it is observed as under:- 61.If this Section is perused, the provisions of this Code would have effect notwithstanding anything inconsistent therewith contained "in any other law" for the time being in force. Section 238 of IBC does not give over riding effect merely to Section 14. The other provisions also are material, and will 44 Company Appeal (AT)(Ins....
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....ntained in the I&B Code, 2016 being a subsequent Statute shall prevail over the Non-Obstante Clause contained in Section 71 of the Prevention of Money Launder Act, 2002. 20. The Learned Counsel for the Appellant contends that in the instant case the Resolution Plan took into account the subject asset viz. Empress Mall in Nagpur, was already approved by the Committee of Creditors in exercise of its commercial wisdom and an appropriate application was filed before the Adjudicating Authority seeking approval of the Resolution Plan. Further, if the Resolution Plan would be approved by the Adjudicating Authority, the Resolution Applicant and the Company/Corporate Debtor would automatically benefit from the immunity provided under Section 32A of the I&B Code. 21. The Learned Counsel for the Appellant comes out with a plea that the Insolvency & Bankruptcy Code, 2016 is a complete Code in itself but a 'Special Statute' being promulgated later to the Prevention of Money Laundering Act, 2002. Hence, the moratorium imposed under Section 14 of the I&B Code will apply even on the Respondent and actions initiated under the Prevention of Money Laundering Act, 2002. 22. The Learned Counse....
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.... , be brought within the fold of the phrase "arising out of or in relations to the insolvency resolution" appearing in Clause (c) of sub-section (5). Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of IBC is interpreted to include all question of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260A of the Income Tax Act, 1961, Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. 38. It was argued by all the learned Senior Counsel on the side of the appellants that an Interim Resolution Professional is duty bound under Section 20(1) to preserve the value of the property of the Corporate Debtor and that the word "property' is interpreted in Section 3(27) to include even actionable claims as well as every description of interest, present or future or vested or contingent interest arisin....
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....inition of the term 'assets' under the Explanation to Section 18. This assumes significance in view of the language used in Sections 18 and 25 in contrast to the language employed in Section 20. Section 18 speaks about the duties of the interim resolution professional and Section 25 speaks about the duties of resolution professional. These two provisions are the word 'assets', while Section 20(1) uses the word 'property' together with the word 'value'. Section 18 and 25 do not use the expression 'property'. Another important aspect is that under Section 25(2)(b) of IBC, 2016, the resolution professional is obliged to represent and act on behalf of the corporate debtor with third parties and exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial, and arbitration proceedings. Section 25(1) and 25(2)(b) reads as follows: "25. Duties of resolution professional - (1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor. (2) For the purposes of subsection (1), the resolution professional shall undertake the following actions:....
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....aration of deemed extension of lease, we fail to understand how NCLT could be considered to have the power of judicial review over the order of rejection." 26. The Learned Counsel for the Respondent points out that the Resolution Professional had already approached the 'PMLA Appellate Tribunal in Appeal' No. 3387/2019 on 27.12.2019 against the order of the 'Adjudicating Authority, PMLA' and no interim relief was granted. As such, it is contended on behalf of the Respondent that the Appellant cannot claim the same relief before the two 'Appellate Tribunals'. 27. The Learned Counsel for the Respondent cites the decision of the Hon'ble Supreme Court in Prestige Lights Ltd V. State Bank of India reported 2007 8 SCC Page 449 wherein at paragraph 35 it is observed as follows:- 35. "It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating t....
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....ermines his election, it shall be determined forever." In the said case, the question was whether in a contract of fraud, whether the person on whom the fraud was practiced had elected to avoid the contract or not. The Court held that as long as such party made no election, it retained the right to determine it either way, subject to the fact that an innocent third party must not have acquired an interest in the property while the former party is deliberating. If a third party has acquired such an interest, the party who was deliberating will lose its right to rescind the contract. Once such party makes its election, it is bound to its election forever. (See page 652) 48. In Harrison vs. Wells, in the Court of Appeal, observed that the rule of estoppel was founded on the well-known principle that one cannot approbate and reprobate. The doctrine was further explained by Lord Justice Salmon by holding "it is founded also on this consideration, that it would be unjust to allow the man who has taken full advantage of a lease to come forward and seek to evade his obligations under the lease by denying that the purported landlord was the landlord". (See page 530) 29.....
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....he 'Proceeds of Crime' attached by way of a 'Provisional Attachment Order' and affirmed by the 'Adjudicating Authority, PMLA' after taking into account of the Resolution Professional's objections, cannot be a subject matter of challenge before the 'National Company Law Appellate Tribunal', because of the fact that the 'Proceeds of the Crime' are not 'Debt' arising under any Law which is due or payable to the Government and as such, the 'Proceeds of Crime' already 'Attached' would not be the subject matter of 'Resolution' under the I&B Code, 2016. 33. The Learned Counsel for the Respondent relies on the Judgement of the Hon'ble High Court of Delhi in the matter of Deputy Director, Directorate of Enforcement Delhi V. Axis Bank and others reported in 2019 SCC Online Delhi 7854 wherein at paragraph 141, 143, 146 and 1476 it is observed as under:- 141. "This court finds it difficult to accept the proposition that the jurisdiction conferred on the State by PMLA to confiscate the "proceeds of crime" concerns a property the value whereof is "debt" due or payable to the Government (Central or State) or local authority. The Government, when it exercises its power under PMLA to se....
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....nnot be permitted to avail of the proceeds of crime to get a discharge for his civil liability towards his creditors for the simple reason such assets are not lawfully his to claim. 147. To sum up on the issue, the objective of the legislation in PMLA being distinct from the purposes of the three other enactments viz. RDBA, SARFAESI Act and Insolvency Code, the latter cannot prevail over the former. There is no inconsistency. The purpose, the text and context are different. This court thus rejects the argument of prevalence of the said laws over PMLA." 34. The Learned Counsel for the Respondent submits that the Prevention of Money Laundering Act, 2002 is a Special Statute enacted by the Parliament for dealing with money laundering and refers to the Judgement of the Hon'ble Supreme Court Y.S. Jagan Mohan Reddy V. Central Bureau of Investigation (2013) 7 SCC 439 wherein at paragraph 15 it is observed as under:- 15) "Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered....
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....─ Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words" which may extend to seven years", the words "which may extend to ten years" had been substituted." 12. From the aforesaid provisions, it is clear that the 'Prevention of Money-Laundering Act, 2002' relates to 'proceeds of crime' and the offence relates to 'money-laundering' resulting confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. Thus, as the 'Prevention of Money Laundering Act, 2002' or provisions therein relates to 'proceeds of crime', we hold that Section 14 of the 'I&B Code' is not applicable to such proceeding. 14. As the 'Prevention of Money Laundering Act, 2002' relates to different fields of penal action of 'proceeds of crime', it invokes....
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....e Insolvency Resolution Process' will not amount to interference with any of the order passed by the 'Enforcement Directorate' with regard to the assets of the 'Corporate Debtor' and the proceedings under 'PMLA' will continue against the 'Corporate Debtor' etc. in accordance with Law. 38. The Learned Counsel for the Respondent contends that an 'Aggrieved Person' in the present case has remedies in terms of the ingredients of Sections 8, 26 and 42 of the Prevention of Money Laundering Act, 2002 in regard to the order passed pertaining to the Provisional Attachment of the Properties, under Section 5 of the Prevention of Money Laundering Act. In this connection, the Learned Counsel for the Respondent refers to the order dated 20.02.2015 of the Hon'ble High Court of Delhi in Rai Foundation Thr. Its Trustees Mr. Suresh Sachdev V. The Directorate of Enforcement and Others reported in 2015 SCC OnLine DEL 7626 wherein at paragraph 12 it is observed and held as under:- 9. In view of the availability of alternative remedies available to the petitioner under the this Act, I am not inclined to entertain this writ petition under Article 226 of the Constitution of India at this nasce....
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....petitioner has full opportunity to place all the material evidence before the Adjudicating Authority to oppose the confirmation of provisional attachment order. 11. A perusal of Section 5 of the Act makes it clear that the order passed under sub-Section 1 is a provisional measure and valid for maximum period of 180 days. The provisional attachment has to be approved by the Adjudicating Authority after proper adjudication within 180 days. The act envisages three layers of the grievance redressal in addition to safeguards incorporated in Section 5(1) of the Act. The Adjudicating Authority may confirm or set aside the provisional attachment order on the basis of material produced by the parties before it. If Adjudicating Authority confirms the order of provisional attachment, the Act envisages appeal before the Appellate Tribunal. Section 42 of the Act provides further appeal to the High Court. Thus, it is clear that petitioner has an effective alternative remedy upto the High Court by way of adjudicating proceedings, appeal to the Appellate Tribunal and finally, appeal to the High Court. Petitioner can raise all the pleas including that of the jurisdiction before the Adjudic....
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....an earlier law, a subsequent general rule will not override the earlier Law, unless Parliament specifically intends as such (vide The Vera Cruz (1884) 10 AC 59 at Page 68 and Maxwell on The Interpretation of Statutes, 12th Edn, P. 196 -7). Added further, the Learned Counsel for the Respondent by adverting to the decision of Hon'ble Supreme Court in the matter of Life Insurance Corporation of India V. D.J. Bahadur 1981 1 SCC 315 and submits that the Hon'ble Supreme Court of India had applied the aforesaid cannon of construction. 41. The Learned Counsel for the Respondent refers to the Judgement dated 2nd July, 2019 of this Tribunal in the matter of Rotomac Global Pvt Ltd V Deputy Director, Directorate of Enforcement, (vide Company Appeal (AT)(Ins) No. 140 of 2019) wherein the Judgement of this Tribunal dated 2.5. 2019 in Varrsana Ispaat Ltd V. Dy. Director of Enforcement (Company Appeal (AT)(Ins) No.493/2018) reported in 2019 SCC OnLine NCLAT 236 was later followed. 42. The Learned Counsel for the Respondent adverts to the order of the Hon'ble Supreme Court dated 22.7.2019 in Varrsana Ispaat Ltd V. Dy. Director of Enforcement vide Civil Appeal No.5546/2019 (Filed against the J....
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....t. It is now a well settled principle of law that when a special leave petition is summarily dismissed under Article 136 of the Constitution, by such dismissal this Court does not lay down any law, as envisaged by Article 141 of the Constitution, as contended by the learned Attorney-General. In Indian Oil Corporation Ltd. V. State of Bihar, [1986] 4 SCC 146, it has been held by this Court that the dismissal of a special leave petition in limine by a non-speaking order does not justify any inference that, by necessary implication, the contentions raised in the special leave petition on the merits of the case have been rejected by the Supreme Court. It has been further held that the effect of a non-speaking order of dismissal of a special leave petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where special leave petition should be granted, in Union of India V. All India Services Pensioners Association, [1988] 2 SCC 580 this Court has given reasons for dismissing the special leave petition. When such reasons are given, the decision becomes ....
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....nce with the views of this Court. It must immediately be clarified that the per incuriam rule is strictly and correctly applicable to the ratio decided and not to obiter dicta. It is often encountered in High Courts that two or more mutually irreconcilable decisions of the Supreme Court are cited at the Bar. We think that the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam" 46. The Learned Counsel for the Respondent urges before this Tribunal that Section 32-A of the I&B Code does not bar the Attachment of the Proceeds of Crime during the pendency of an ongoing CIRP and as on date, there is no approval of Resolution Plan and as such the bar under Section 32-A(2) of the Code is not attracted in the case on hand. 47. The Learned Counsel for the Respondent refers to the decision of the Hon'ble Supreme Court in Manish Kumar V. Union of India 2021 5 SCC 1 wherein the Hon'ble Supreme Court at paragraph 320 to 320.2 had observed the following:- 320. "Coming to sub-Section (2) of Section 32A, it declares a bar against taking any action against property of the corporate debtor. This bar also contemplates the ....
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.... Delhi High Court's reasoning is contained in paragraphs 139 and 141, which are set out here in below: "139. From the above discussion, it is clear that the objects and reasons of enactment of the four legislations are distinct, each operating in different field. There is no overlap. While RDBA has been enacted to provide for speedier remedy for banks and financial institutions to recover their dues, SARFAESI Act (with added chapter on registration of secured creditor) aims at facilitating the secured creditors to expeditiously and effectively enforce their security interest. In each case, the amount to be recovered is "due" to the claimant i.e. the banks or the financial institutions or the secured creditor, as the case may be, the claim being against the debtor (or his guarantor). The Insolvency Code, in contrast, seeks to primarily protect the interest of creditors by entrusting them with the responsibility to seek resolution through a professional (RP), failure on his part leading eventually to the liquidation process." xxx xxx xxx "141. This court finds it difficult to accept the proposition that the jurisdiction conferred on the State by PMLA to confiscate t....
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....terim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision etc. and the particular legislation contains a detailed mechanism for redressal of his grievance and only if the petitioner is able to show that its case falls within any of the exception carved out in Whirlpool Corporation (supra) and some other judgments then the High Court may after considering all the relevant parameters and in public interest pass an appropriate interim order." 52. The Learned Counsel for the Respondent refers to the decision of the Hon'ble Supreme Court in Smt Ujjam Bai V State of Uttar Pradesh AIR 1962 SC 1621wherein at paragraph 246 it is observed as under:- "But while an erroneous action of the State in exercise of its administrative functions can be challenged directly under Art. 32 if it affects a person's fundamental right on the ground that it is not authorised by law the action of the tribunal pursuant to an erroneous order will not be open to challenge for the reason that its action arises out of the exercise of a judicial power and is thus authorised by law, State action though it be. When, Under the provis....
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.... of the Insolvency process. The primary object of the I&B Code 2016, is one of Resolution. The other aim is for 'Maximization of the Value of Assets' of the 'Corporate Debtor'. Also, the objective is for promoting Entrepreneurship availability of credit and balancing the interests. The Insolvency & Bankruptcy Code, 2016 ensures the management of operation of the 'Corporate Debtor' as a going concern during the 'Corporate Insolvency Resolution Process'. 56. In terms of Section 30 of the Code, a 'Resolution Applicant' may project a 'Resolution Plan' to a Resolution Professional who is to scrutinize the said Plan as to whether it confirms to the fulfilment of by ingredients of Section 30(2). In the event of the 'Plan' confirms to such requirements, the same is to be presented to the 'Committee of Creditors' for its approval as per Section 30(3). The 'Committee of Creditors' may approve the said 'Plan' by a vote of not less than 75% as per Section 30(4). 57. To be noted, the 'Committee of Creditors' is not to approve a 'Resolution Plan' where the 'Resolution Applicant' is not eligible under Section 29-A of the Code, and it necessitates the 'Resolution Professional' to invite a fr....
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....Section 63 of the I&B Code, 2016 bars the jurisdiction of Civil Courts, thus creating a mechanism in relation to the purpose of 'Insolvency & Liquidation of Corporate Debtor'. For the adjudication of issues relating to the exclusive jurisdiction of the Civil Court under I&BC, 2016, Section 63 of the Code is necessarily to be read in conjunction with Section 430 of the Companies Act, 2013. In matters relating to 'Corporate Insolvency Resolution', the petition/application under Section 7 or 9 as the case may be has to be made only before the 'Adjudicating Authority'. The 'National Company Law Tribunal' and the 'National Company Law Appellate Tribunal' have sole jurisdiction in respect of matters arising under the I&B Code, 2016. 62. As per Section 430 of the Companies Act, 2013 the National Company Law Tribunal alone has jurisdiction in relation to the matters coming under the ambit of the Companies Act, 2013 or any other law, which means the I&B Code, as opined by this Tribunal. Indeed, the exclusion under Section 63 of I&B Code, 2016 limiting the powers of a Civil Court to grant injunction, is taken care of by means of the ingredients of Section 430 of the Companies Act. Prev....
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....dering'. If an 'Adjudicating Authority' determines under sub-Section 2 of Section 8 that the property of 'Money Laundering' he shall by an Order in wring confirm the attachment of the property under sub-section 1 of Section 5 or the 'Retention of Property' or record seizure or frozen under Section 17 or Section 18. ATTACHMENT OF PROPERTY 70. A 'Deputy Director of Enforcement Directorate' can attach the property which is purchased from out of the 'Proceeds of the Crime'. The 'Attachment of Property' is to be made after the approval of the 'District Magistrate'. Later, a 'Report' is to be submitted to the 'Adjudicating Authority' constituted under Section 6 of the PMLA Act, 2002. The 'Adjudicating Authority' affected person/party is to pass a 'Final Order of Attachment'. The property which is attached can be retained for '180 days' and the period of 'Attachment' may be extended subject to the discretion of the 'Adjudicating Authority'. BAR OF CIVIL COURT 71. Section 41 of the Prevention of Money Laundering Act, 2002 bars the jurisdiction of Civil Court in matters in which the Director, 'Adjudicating Authority' or the Appellate Tribunal has the power to decide and no injun....
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....dent/Enforcement Directorate and later affirmed by the 'Adjudicating Authority' PMLA. 76. The averment made by the 'Applicant'/IRP of 'Corporate Debtor' in IA 81 of 2020 in CP(IB) No. 397/NCLT/AHM/2018 is that the Asset/property which was attached provisionally through an Order dated 08.05.2019 was confirmed by the 'Adjudicating Authority' of PMLA on 24.10.2019 in an erroneous manner without considering the submission made on behalf of the Applicant that the Asset/Property which was attached, was acquired prior to the commission of purported offences under the same was mortgaged to the Bank against the loan raised for the development of the said property. 77. According to the Appellant, the property which was attached by the Respondent/Enforcement Directorate was acquired by a registered 'Conveyance Deed' on 07.02.2005 and that the 'Equitable Mortgage of the said Property' was created by means of 'Deposit of Title Deeds' on 05.09.2008, pursuant to its Sanction Letter dated 14.06.2008 considering release of the Credit Facilities to the 'Corporate Debtor'. 78. It comes to be known that upon 'Default' committed by the 'Corporate Debtor' in repayment of the loan amount, the Ba....
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....ent' order dated 08.05.2019 is the major income generating asset of the 'Corporate Debtor' and without which, there is no possibility of arriving at a satisfactory 'Resolution Plan' during the tenure of 'CIRP' of the 'Corporate Debtor'. 84. It is the case of the 'Appellant' is that the 'objective' of the I & B Code 2016 can well be achieved, if the 'property' in question is handed over to the Appellant/Applicant who acts on behalf of the 'Committee of Creditors' dealing with 'Resolution' of the 'Corporate Debtor' of course, in the interest of all stakeholders. 85. The Respondent/Enforcement Directorate before the 'Adjudicating Authority' had filed a 'reply' in IA 81 of 2020 in CP(IB) No. 397/NCLT/AHM/ 2018 averring, inter alia, that the 'Provisional Attachment order' was issued on 08.05.2019 and that the 'Adjudication' proceeding was initiated since then as such any Order later to that date shall have no effect because of the fact that the proceeding for confirmation under Section 8A of the 'Prevention of Money Laundering Act, 2002' was continuing. 86. Apart from that, based on the materials in its possession of the Respondent, the 'Attachment of the Property' of the 'borr....
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....ution Plan' by an 'Adjudicating Authority' of course subject to the requirement of certain conditions being satisfied. In the instant case in hand, admittedly, there is no approval of 'Resolution Plan' till date and as such, it is held by this 'Tribunal', that the Appellant cannot press into service the ingredients of Section 32-A(2) of the I & B Code. 92. To put it, in clear and in an unequivocal term, this Tribunal points out that Section 32 A of the I & B Code, 2016 in the present form and content in a cocksure manner will negate the action i.e. taken to discharge the criminally acquired asset/property in the considered opinion of this 'Tribunal'. Further more, such Illgotten/ Illegitimate Assets will be legitimised after the 'Corporate Insolvency Resolution Process' was completed. 93. A mere running of the eye of the 'Prevention of the Money Laundering Act 2002' latently and patently indicates that it pertains to 'Proceeds of Crime' and provides for the penal action in respect of the 'Proceeds of Crime'. It is to be remembered that only when an endeavour is made to show the source of that money as something legitimate, it would amount to projecting the 'Proceeds' as untai....
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....tion to an 'Adjudicating Authority' to determine issues/questions relating to priorities, question of Law or fact emanating out of or in relation to the 'Insolvency Resolution'. APPEAL & APPELATE AUTHORITY 100. Section 61 of the I & B Code although provide for filing of an 'Appeal' to the National Company Law Appellate Tribunal by 'any person' aggrieved by an Order of an 'Adjudicating Authority' (NCLT) of course within 30 days etc, in the instant Case, the Appellant/Applicant in IA 81 of 2020 in CP(IB) No. 397/NCLT/AHM/2018 had in fact, approached the Appellate Tribunal under the 'Prevention of Money Laundering Act, 2002' by filing an Appeal No. 3387 of 2019, on 27.12.2019 against the order of the 'Adjudicating Authority' 'PMLA'. 101. At this stage this 'Tribunal' aptly points out the decision of the Hon'ble Supreme Court in Northern Plastics Ltd. v Hindustan Petroleum (1997) 91 ELT 502 SC where in at paragraph 11 it is observe that..... "if he has not been subjected to a legal wrong has suffered no legal grievance, then, he has no legal or justiciable claim to hang on, he is not a person aggrieved and has no locus standi to challenge the order". 102. Moreover, in the d....
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....firmed by the Adjudicating Authority under the prevention of 'Money Laundering Act' of course after providing an opportunity of 'Hearing' to the Appellant/ Resolution Professional. 108. Even the decision in Bank of India's Case in 2019 SCC Online ATPMLA 23 relied on the side of Appellant, in the earnest opinion of this Tribunal is inapplicable because of the fact the Bank had obtained a secured charge in respect of the properties under attachment, which was acquired before the offence under the prevention of Money Laundering Act, 2002. However, it cannot be forgotten that in the present case on hand, before this Tribunal, the property came to be attached belonging to that of 'Corporate Debtor' as 'Proceeds Of Crime'. 109. In so far as the decision in Manoj Kumar Aggarwal case is concerned (reported in 2021 SCC OnLine NCLAT 121), this 'Tribunal' is of the considered opinion that the said decision runs contra to the 'Principle of Stare Decisis'. 110. As far as the present case is concerned, the 'Appellant/Resolution Professional' even though has filed Company Appeal (AT)(Ins) No. 817 of 2021 being dissatisfied with the order dated 31.12.2020 in IA 81 of 2020 in CP(IB) No. 39....