TaxTMI 
TaxTMI 
2026 (1) TMI 869
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....ferred to as "the Act") was issued on 01.11.2019 restraining the petitioner from transferring or charging the said property. Vide order dated 28.01.2020, it was directed that the attachment would continue until further order was passed by the adjudicating authority. These two orders are assailed in this writ petition. 2.City Union Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 on 18.03.2021 to initiate corporate insolvency resolution process against the petitioner - company. The application was admitted on 21.03.2022 and CIRP was ordered to be initiated. Moratorium envisaged under Section 14(1) of IBC also came into force. An Insolvency Resolution Professional was also appointed to take over the management. On 05.01.2024, the resolution plan was submitted by the Resolution Professional and the same was also duly approved by NCLT. As a result, the successful Resolution Applicant replaced the erstwhile management. 3.In the meanwhile, on 23.09.2021, the adjudicating authority under the Prohibition of Benami Property Transactions Act, 1988 confirmed the attachment. Questioning the same, the erstwhile management had filed an appeal before the....
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....s have filed their written submissions and the learned counsel on either took me through them. 7.I carefully considered the rival contentions and went through the materials on record. The maintainability of this writ petition can first be decided. It is true that questioning the attachment order, appeal is pending before the Appellate Tribunal (PBPT). The endeavor of the petitioner herein to obtain release of the property at the interim stage did not fructify. The Hon'ble Supreme Court in Jai Singh v. UOI (AIR 1977 SC 898) held that two parallel remedies in respect of the same matter at the same time cannot be pursued. The Hon'ble Supreme Court in S.J.S.Business Enterprises Pvt Ltd v. State of Bihar (2004) 7 SCC 166, however took a benevolent approach. It suggested that instead of dismissing the writ petition on the ground that the alternative remedy had been availed of, the court may call upon the party to elect whether it will proceed with the alternative remedy or with the application under Article 226. Such an approach was adopted when the petitioner had already filed a civil suit. The Hon'ble Supreme Court did not fault the petitioner because before the final di....
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....o a person, or sale of liquidation assets under the provisions of Chapter III of Part II of this Code to a person, who was not- (i) a promoter or in the management or control of the corporate debtor or a related party of such a person; or (ii) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court. Explanation.-For the purposes of this sub-section, it is hereby clarified that,- (i) an action against the property of the corporate debtor in relation to an offence shall include the attachment, seizure, retention or confiscation of such property under such law as may be applicable to the corporate debtor; (ii) nothing in this sub-section shall be construed to bar an action against the property of any person, other than the corporate debtor or a person who has acquired such property through corporate insolvency resolution process or liquidation process under this Code and fulfils the requirements specified....
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....rect conflict has arisen. The Resolution Plan approved by NCLT included the property that had been attached by the adjudicating authority under the PBPT Act. The successful resolution-applicant contends that when once the NCLT had blessed the resolution plan, it comes into effect and all the past sins associated with the corporate debtor stood purged. The successful resolution applicant commences his journey on a clean slate. I now have to test whether this proposition is correct. 10.The answer is found in the language of Section 32A(2) of IBC, 2016. It states that no action shall be taken against the property of the corporate debtor. The expression "property" is not qualified by any adjective. When there is no limiting expression, the word in question must be given its fullest import. "Property of the corporate debtor" would include all the properties standing in the name of the corporate debtor". The word "property" in Section 3(27) of the Code as including money, goods, actionable claims, land and every description of property and every description of interest including present or future or vested or contingent interest arising out of, or incidental to property. The property ....
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....g anything contained in the Transfer of the Property Act, 1882 (4 of 1882) or any other law for the time being in force, where, after the issue of a notice under section 24, any property referred to in the said notice is transferred by any mode whatsoever, the transfer shall, for the purposes of the proceedings under this Act, be ignored and if the property is subsequently confiscated by the Central Government under section 27, then, the transfer of the property shall be deemed to be null and void." According to the learned Standing Counsel since the attachment order had been already made, any subsequent transaction cannot nullify the attachment and will have to be treated as void. But this contention overlooks the very nature of the subsequent transaction. Section 57 of PBPT Act, 1988 prohibits transfer by any mode. The expression "transfer" has been defined in Section 2(99) of the PBPT Act, 1988 as including sale, purchase or any other form of transfer of right, title, possession or lien. The property that is said to be held benami continues to be in the name of the original purchaser ie., Milan Textile Enterprises Pvt Ltd., It has not changed hands. There has been no sale of ....