2022 (8) TMI 933

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he 'Adjudicating Authority' (National Company Law Tribunal, Division Bench - II, Chennai). Earlier, the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench - II, Chennai), while passing the 'impugned order' in MA(IBC)/05(CHE)/2020 at Paragraph No.5 had observed the following:- "It is seen from the submissions and the documents that the 1st Respondent has only provisionally attached the said properties, which means that it is for a period of either until further orders or 90 days from the end of month from the date of the notice under Section 24(1) of the Prohibition of Benami Property Transaction Act, 1988; whichever is earlier. It can be seen that the Date of the order for attachment was 01.11.2019 and the date of filing the Application is 03.01.2020 which is only 63 days from the date of attachment order. The Applicant ought to have waited for the said period to expire or for further orders from the 1st Respondent post which, the procedure for revoking the attachment as stipulated under the Prohibition of Benami Property Transaction Act, 1988 should have been preferred. The Applicant had sought that as the Corporate Debtor is undergoing CIRP, the provisio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....'Order' of 'attachment' of the 'immovable property' of the 'Corporate Debtor', when 'Moratorium' under Section 14 of the Insolvency & Bankruptcy Code, was in force. The Learned Counsel for the Appellant proceeds to point out that the 'attachment' of the 'immovable property' of the 'Corporate Debtor' by the 1st Respondent is an illegal one, as per decisions of the Hon'ble Supreme Court in a)"Alchemist ARC Vs Hotel Gaudavan Private Limited (SC) (2018) 16 SCC 94; b) Anand Rao Korada Vs Varsha Fabrics - taxman. Com 474 (SC) (2019); c) Supremacy of 238 of IBC was upheld in (CIT Vs Monnet Ispat (2018) 169 DTR 263 (SC)] d) Dreams Infra Private Limited Vs. The Competent Authority Dreams Infra India Private Limited, Karnataka High Court WP No.13477/2020 (GM-RES) The Learned Counsel for the Appellant takes a stand that the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench - II, Chennai) had failed to take into account of the facts that the 'immovable properties' attached by the 1st Respondent are subject to mortgage with the Financial Creditors viz., 1) Bank of India and 2) Indian Overseas Bank for securing Credit facilities, which was sanctioned much earlier ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r the 1st Respondent / Bank that the 'impugned orders' passed by the 'Adjudicating Authority' (National Company Law Tribunal, Division Bench - II, Chennai) are perfectly valid in 'Law' and they require no interference in the hands of this 'Tribunal', at the 'Appellate' stage. Advancing his argument, the Learned Counsel for the 1st Respondent points out that Section 14 of the Insolvency & Bankruptcy Code, 2016, does not prohibit to proceed under the 'The Benami Transactions (Prohibition) Act, 1988 (Amended 2016 by Act 43)', although 'Moratorium' shields the 'Corporate Debtor' from 'Legal Action' during its period of recovery, such a situation, cannot extend to cases that entail 'Benami Transactions'. The Learned Counsel for the 1st Respondent brings out to the 'Notice' of this 'Tribunal' that in the matter of Deputy Director, Office of the Joint Director, Directorate of Enforcement -Versus- Asset Reconstruction Company India Limited and others (vide Writ Petition No.29970 of 2019), the Hon'ble Madras High Court had observed and held that the 'Moratorium' as per Section 14 of the Insolvency & Bankruptcy Code, 2016 does not affect the 'provisional attachment' order passed under 'Pr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d one and this 'Appellate Tribunal' (NCLAT) is not empowered to determine the points / issues pertaining to the 'Attachment' under 'The Benami Transactions (Prohibition) Act, 1988 (Amended 2016 by Act 43)'. To put it precisely, the transaction in issue falls within the ambit of the 'The Benami Transactions (Prohibition) Act, 1988' and viewed in that perspective the invocation of Section 32 (A) and Section 60 (5) of the Insolvency & Bankruptcy Code, 2016 will be of no assistance to the Appellant / Applicant, in the considered opinion of this 'Tribunal'. The Learned Counsel for the 1st Respondent while summing up, submits that the Appellant / Applicant cannot seek for public 'Law' remedy, under the 'The Benami Transactions (Prohibition) Act, 1988', before this 'Appellate Tribunal'. It must be borne in mind that in the act / transaction of 'Money Laundering', there is 'Washing the Money'. In case of a 'Benami Transaction', to evade or avoid 'Tax' or 'defrauding' the 'Revenue', the  'Victim' is the 'State' and not the 'individual', which in 'Law' is 'species' of 'fraud'. The 'onus' of establishing that a particular 'sale' is 'Benami' and the apparent purchaser is not the 'real....