TaxTMI 
TaxTMI 
2022 (8) TMI 1575
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....undering Act, 2002 (for short, "the PMLA") and the Insolvency and the Bankruptcy Code, 2016 (for the sake of brevity, "the IBC"). The petitioner no.2 along with others took out a resolution application as contemplated in the IBC in respect of the corporate debtor, the petitioner no.1-Company. Ultimately, the said resolution applicants succeeded and a resolution plan was approved. 2. The corporate insolvency resolution process commenced on January 8, 2018. The resolution plan was approved by the National Company Law Tribunal (NCLT) on September 4, 2019. The National Company Law Appellate Tribunal (NCLAT) affirmed such approval on March 4, 2021. A Special Leave Petition preferred against such approval was dismissed on May 4, 2021. 3. The re....
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..... The learned Senior Advocate places reliance on Section 2(1)(u) of the PMLA, which defines "proceeds of crime" as any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. 9. Section 5 contemplates attachment of property involved in money laundering in case of any person who is in possession of any proceeds of crime and in respect of situations where such proceeds of crime are a likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceeding relating to confiscation of such proceeds of crime. 10. As such, it is argued that the entire proceeding under the PMLA against the corporat....
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....nstitution in view of such availability of appeal. 14. It is further contended that, subsequent to the attachment order impugned in the present writ petition, a final order of attachment has been passed in respect of the property under Section 8(3) of the PMLA. Since the provisional order of attachment has merged with such final order, in the absence of any challenge to the final order, the present writ petition against the provisional order of attachment does not lie, it is argued. 15. Learned counsel for the respondents seeks to impress upon this Court that the scheme of Section 8 of the PMLA is self-sufficient and is not circumscribed by Section 32-A of the IBC. 16. Learned counsel for the respondents cites, in support of his contenti....
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....t of the IBC in 2016. 21. Insofar as Section 32-A of the IBC is concerned, sub-section (1) thereof provides that the same would operate notwithstanding anything to the contrary contained in the IBC or any other law for the time being in force, giving precedence to the said provision even over other Sections of the IBC, apart from other prevailing statutes. 22. Moreover, it has been held repeatedly by the Supreme Court on several occasions that upon a Resolution Plan being approved, further claims against the corporate debtor get extinguished. 23. Inasmuch as the maintainability of the writ petition is concerned, the attachment order contemplated in Section 5 of the PMLA takes within its fold a provisional attachment of the proceeds of th....
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....ed in Section 32-A. As such, it cannot but be observed that the provisional order of attachment dated February 16, 2022 and all consequential actions, including any order which might have been passed under Section 8(3) of the PMLA, are prima facie vitiated and de hors the lawful authority of the respondents. 27. Insofar as the cited judgment is concerned, the issues which fell for consideration before the Supreme Court in Vijay Madanlal Choudhary (supra) were the validity and interpretation of certain provisions of the PMLA and the procedure followed by the Enforcement Directorate while inquiring into/investigating offences under the PMLA. The said issues are not germane in the present case, since the validity of the PMLA and/or the proced....
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.... light of day. Hence, the rigours of Section 71 of the PMLA might, arguably, grant supremacy to the said Act over the 1973 Code. 32. In the case at hand, however, the comparison is between the PMLA of 2002 and the subsequent IBC of 2016. Hence, the analogy and precedentiary value of Vijay Madanlal Choudhary (supra) are entirely inapplicable to the instant case. 33. Moreover, Section 5 of the 1973 Code was considered by the Supreme Court. It envisages that nothing in the 1973 Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. ....