TaxTMI 
TaxTMI 
2025 (6) TMI 1436
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....icle 227 of the Constitution of India with a prayer to quash and set aside an order dated 24.02.2022 passed by the National Company Law Tribunal, Mumbai (for short, hereinafter referred to as 'NCLT Mumbai'). The petitioner's case is that the properties in dispute, in the present case, were provisionally attached by the E.D. in exercise of powers under Section 5 of the Prevention of Money Laundering Act, 2002 (for short, hereinafter referred to as 'PMLA 2002') after a criminal motion was initiated under an FIR dated 07.03.2016 against certain persons who are accused of having committed offence under the PMLA 2002. The order of provisional attachment passed on 02.02.2019 was subsequently confirmed by the adjudicating authority by passing an order under Section 8 of the PMLA 2002 on 19.09.2019. Subsequently, the flat buyers of the Royal Raj Vilas Project initiated Corporate Insolvency Resolution Proceedings (for short, hereinafter referred to as 'CIRP') under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, hereinafter referred to as 'IB Code 2016') against the respondent No. 1-the builder-corporate debtor before the NCLT, Mumbai. The confirmation of attachment by adj....
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....ough Section 238 of the IB Code 2016 provides that the provisions of the Code shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, in respect of those properties of the corporate debtor which were attached even prior to commencement of the resolution proceedings, it was not within jurisdiction of the NCLT to approve resolution plan including such property of the corporate debtor and the NCLT being Tribunal of the limited jurisdiction has no plenary jurisdiction to quash and set aside attachment orders. Learned Additional Solicitor General would also submit that once provisional attachment order passed under Section 5 is confirmed by the adjudicating authority by drawing proceedings under Section 8 of the PMLA 2002, the correctness and validity of the order could be assailed only by filing an appeal before the PMLA Tribunal. In fact, in the present case, it is contended that the confirmation order passed under Section 8 of the PMLA 2002 by the adjudicating authority is challenged in appeal before the PMLA Tribunal and the PMLA Tribunal passed a status quo order. The order of the NCLT is, therefore, clear....
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..../financial creditors invoked jurisdiction of the NCLT against the respondent No. 1 corporate debtor leading to initiation of CIRP under Section 7 of the IB Code 2016 and NCLT, Mumbai after following the process of law duly approved the resolution plan under Section 31 of the IB Code 2016 on 24.02.2022. The petitioner had full notice and knowledge of the proceedings and orders passed by the NCLT, Mumbai as various notices were issued to the petitioner by NCLT, Mumbai from time to time, but the petitioner chose not to appear in those proceedings. Even though order was passed way-back on 24.02.2022, which was in full notice and knowledge of the petitioner, the petitioner failed to take recourse to the statutory remedy of appeal within the period of limitation before the National Company Law Appellate Tribunal as was available under the IB Code 2016 and allowed the period of limitation to expire. Long after the order attained finality, having not been challenged within the period of limitation, present petition has been filed after almost one year i.e. on 10.03.2023. Therefore, this writ petition, having failed to avail statutory remedy of appeal within the period of limitation prescri....
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....y the adjudicating authority and therefore, on appeal having been filed, status quo order was passed by the PMLA Appellate Tribunal, as would be clear from the contents of paragraph 27 of the impugned order, has recorded that the contention of the parties pertained to merit of the writ petition. All that has been said is that the Court refrains itself from giving such findings on merits at that stage, which may affect the merits of the case and it would be considered and decided whenever occasion arise to hear the writ petition on merits. Without recording any prime facie view on the serious issue of jurisdiction of the NCLT, learned Single Judge has exercised its discretion to vacate the interim order. 13. Present is not a case where the appellant Union of India (E.D.) has confined challenge only to the correctness and validity of the order of the NCLT on alleged violation of the provisions of law, but the appellant has called in question very jurisdiction of the NCLT to assume jurisdiction to vacate the orders passed by the competent authorities under the provisions of the PMLA 2002. 14. The PMLA 2002 is a special enactment to prevent money laundering and to provide for confisc....
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....djudicating authority, could be subjected to challenge only before the appellate tribunal created under the PMLA 2002. If any party is aggrieved by the order passed by the PMLA Appellate Tribunal, the remedy is to file an appeal before the High Court. Thus, the orders and proceedings of attachment under the Act are subject to orders that may be passed by the appellate authority. Therefore, in case of attachment of any property, which is alleged to be involved in money laundering, PMLA 2002, is a self-contained Code. 16. The IB Code 2016 is an Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interest of all the stakeholders including alteration in the priority of payment of government dues and to establish an insolvency and bankruptcy fund, and matters connected therewith or incidental thereto. The IB Code 2016 aims to regulate insolvency resolutions and liquidation for corporate persons. Resolution plans prepared by the resolution professional....
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....d whether the NCLT has jurisdiction to vacate an order of attachment passed by the E.D., particularly when such order has been confirmed by the adjudicating authority under Section 8 and correctness and validity of that order is under challenge before the appellate tribunal, which has passed an order of status quo. 19. In the present case, it is admitted position that the order of provisional attachment passed under Section 3 of the Act was confirmed by the adjudicating authority by passing an order under Section 8 and that order is under challenge before the appellate tribunal and it is on record that appellate tribunal has passed an order of status quo much before the order passed by the NCLT on 24.02.2022. Thus, the order of NCLT nullifies the order of confirmation of the attachment by the adjudicating authority and even the status quo order passed by the tribunal. In other words, the NCLT, vide order impugned in the writ petition, has brought the orders and proceedings under the PMLA 2002 to an end. The issue of jurisdiction of the NCLT, which is a tribunal of limited jurisdiction, indeed requires serious consideration. In our view, a serious question is to be tried in the wri....
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....o be erstwhile Director of M/s. Udaipur Entertainment World Private Limited. The petition was dismissed mainly on the ground that the petitioner having failed to prefer an appeal within the period of limitation as provided under the law, could not maintain writ petition. Therefore, the basis for dismissal was failure to avail the statutory remedy of appeal. When the matter was taken up by the Bombay High Court, none of the parties informed that in a petition filed by Union of India wherein M/s. Udaipur Entertainment World Private Limited was impleaded as party, an interim order passed on 06.07.2023 and operating. Though, M/s. Udaipur Entertainment World Private Limited (respondent therein) raised a strong objection to the maintainability of the petition on the ground that the statutory remedy available has not been availed within the period of limitation provided therefor, the factum of filing of pendency of petition before this Court wherein an interim order was passed on 06.07.2023, was suppressed when the case was heard by the Bombay High Court on 27.09.2023. The order passed by the Court on 22.08.2023 shows that the same counsel, who represented M/s. Udaipur Entertainment World....