TaxTMI 
TaxTMI 
2026 (3) TMI 1457
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....2. Mr. J. Rajesh, Mr. Dhrupad Vaghani, Mr. Md. Arsalan Ahmed & Mr. Yashwardhan Aggarwal, Advocates for R-1. JUDGMENT [Per: Justice Mohd. Faiz Alam Khan, Member (Judicial)] A common issue is involved in the aforesaid appeals and therefore for the sake of convenience both above appeals are being disposed of by passing this common order. Factual Matrix pertaining to CA (AT) (Ins) No. 1786 of 2025 2. CA (AT) (Ins) No. 1786 of 2025 has been filed by the appellant-BSE Ltd. Challenging the impugned order dated 31.10.2025 passed by the Ld. National Company Law Tribunal, Mumbai (Adjudicating Authority) in IA No. 2590 of 2025 in CP (IB) No. 1113(MB) of 2022 whereby the appellant has been directed to vacate the debit freeze with immediate effect and issue necessary communication to the Respondent No. 2 within 15 days from the passing of the order. 3. Brief facts necessary for the disposal of the instant appeal are that Corporate Debtor (CD) is an Investment Company /Holding Company of the future group facilitating the funding of group companies through various investments and landing of loans and advances and also providing services to scale up/support the retail business....
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....er vide reply dated 24.03.2025 appellant responded by stating that they will only lift the debit freeze after receiving the due amount of Rs. 15,15,857/- and as such the debit freeze on the Demat account was not removed. 11. Aggrieved by the refusal of the appellant to defreeze the aforesaid Demat account of the CD the appellant -BSE Ltd. has preferred an IA No. 2590 of 2025 before Ld. Adjudicating Authority, which was disposed of by passing impugned order, which is under challenge in this appeal. Factual Matrix pertaining to CA (AT) (Ins) No. 1862 of 2024 12. The instant appeal has been preferred by the appellant-BSE Ltd. challenging the impugned order dated 31.07.2024, passed by Ld. NCLT, Mumbai (Adjudicating Authority) disposing IA No. 928 of 2023in CP IB No. 2941/MB/2019 whereby the application moved by the Respondent No. 1/liquidator has been allowed and direction has been given to the appellant and other Respondents to defreeze the Demat account of the CD with consequential directions. 13. Necessary facts required for the disposal of this appeal are that vide order dated 25.02.2022, passed in CP (IB) No. 2941/MB/2019 by Xander Finance Services Ltd. under Section 7....
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....ely, stated that the Demat account of the CD can only be de-freezed if the CD has completed all the necessary compliances in accordance with the LODR Regulation, as well as the fine so levied on the CD is paid. It is further stated that the CD has neither completed necessary compliances in accordance with the LODR Regulations nor has paid the fines levied for such non-compliances. It was further informed that due to non-compliance of various Regulations of SEBI (LODR) Regulations, 2015, freezing action against Cox and kings Ltd., Cox and Kings Financial Services Ltd. and Tulip Stars Hotels Ltd. were taken on November 19, 2019 and February 25, 2020, respectively. It was further stated that since Liz Traders and Agents Pvt. Ltd. were disclosed as Promoters of the above mentioned companies in the shareholding pattern filed by the them, Demat account of Liz traders and agents has also freezed. 18. Aggrieved by the refusal of the appellant to de freeze the aforementioned Demat account the IA No. 928 of 2023 was filed by the liquidator/Respondent No. 1 requesting the Adjudicating Authority to direct the appellant and other Respondents to defreeze the Demat account of the CD with conse....
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.... highlighted along with Regulation 14 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 (LODR) Regulations and it is submitted that a comprehensive securities law framework exists to ensure compliance by listed entities including payment of Annual License Fee (ALF) and the issue falls within the domain of the exchange and the Adjudicating Authority was not having any jurisdiction to grant the prayers sought by the Respondent No. 1. Reliance has been placed by Ld. Counsel for the Appellant on Embassy Property Developments Pvt. Ltd. vs. State of Karnataka, (2019) SCC Online SC 1542. 23. It is further submitted that Demat accounts of the CD were freezed much prior to the commencement to the CIRP process and thus was not an action arising from or in relation to the Insolvency Proceedings. Emphasis has been laid on Gujarat Urja Vikas Nigam Ltd. vs. Amit Gupta and Ors., (2021) 7 SCC 209. 24. It is further submitted that the impugned order fails to consider that freezing of the Demat account has no nexus with the Insolvency/liquidation of the CD under the Securities Law Framework and therefore there was no occasion for the Ld. Adjudicating Authority to assu....
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....aper Mills vs. BSE Ltd. is wholly misplaced. 27. It is further submitted that pre-requisite for application of the overriding Principle contained under Section 238 of the Code that the provisions of the other law are in consistent with the provisions of the Code as per the test laid down by the Hon'ble Supreme Court in Kishorebhai Khamachand Goyal vs. State of Gujarat (2003) 12 SCC 274. However, those tests are not satisfied in the instant case. 28. It is further submitted that despite the impugned order recognized that appellant has discretion and power to relax the action taken in terms of the circulars issued by the SEBI and exchange, has completely disregarded the submissions of the appellant that the appellant should be given an opportunity to exercise its discretion under the various circulars issued by the SEBI and the Exchange and has set a dangerous precedent allowing the non-compliant listed entities to allow them to simply by pass the process and requirements under aforesaid circulars and in this way the various circulars issued by the SEBI and Exchange has been ignored and the Securities Law Framework has been undermined. 29. Ld. Counsel for the Appellant furth....
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....hich requires the Appellant to follow up with the listed entity and, only thereafter, deny permission for further listing. The Appellant may freeze the promoters' shares only if the listed entity fails to pay the ALF. In other words, freezing of the promoters' shares can occur only as the third step in the recovery process by the Appellant under the SEBI Circular dated 11.02.2021. 30.3 It is also submitted that the Appellant has filed claim in the CIRP of FRL which was admitted in full by the RP of FRL and when FRL was admitted into Liquidation the Appellant again filed the claim which was also admitted in full and the payment to the Appellant was subject to the provisions of the Code, and the recovery of the ALF was also subject to the insolvency resolution and liquidation process. The SEBI Circular dated 11.02.2021 at Clause 5 provides that no action must be taken, and to withdraw any action where the listed entity is under moratorium, recognizing the bar against recovery proceedings under Section 14(1)(a) of the Code. 30.4 It is also submitted that SEBI had, in their Affidavit in Reply to the IA No. 2590 of 2025, relied on Clause 5 of the SEBI Circular dated 11.02.....
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....s International Pvt. Ltd. 2021 SCC OnLine NCLAT 2918, Pinakin Shah- Liquidator v The Assistant Commissioner of State Tax Company Appeal (AT)(Ins) No. 32 of 2021, Hemant Mehta, RP of Pan India Utilities v Ass. Commissioner of State Tax 2022 SCC Online NCLAT 4191, GUVNL v Amit Gupta (2021) 7 SCC 209, Varrsana Ispat Ltd v Deputy Director of Enforcement 2019 SCC OnLine NCLAT 235 and Kiran Shah v Enforcement Directorate Company Appeal (AT)(Ins) No. 817 of 2021. 30.8 Ld. Counsel for the Respondent No.3 SEBI on the other hand submits that the issue of freezing of the demat accounts of the Corporate Debtor falls within the domain of the Stock Exchange in terms of the circulars issued by the Respondent No. 3/SEBI and the Exchange; and the Hon'ble NCLT does not have jurisdiction to grant the prayers sought for by the Respondent No. 1 under Section 60(5) of the IBC in view of the law laid down by the Hon'ble Supreme Court in Embassy Property Developments Pvt. Ltd. v State of Karnataka [ 2019 SCC Online SC 1542] and Gujrat Urja Vikas Nigam Limited v. Amit Gupta and Ors. [(2021) 7 SCC 209], as Ld. NCLT does not have jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2....
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.... effect on the rights of the Appellant and Respondent No. 3 and also on Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth & Ors.; 2025 SCC OnLine SC 493,Judgment dated 20.08.2024 passed by the Hon'ble NCLT, Mumbai in IA 5538/ 2023 in Dolphin Offshore Enterprises (India) Ltd. v BSE Ltd. to show lack of jurisdiction of NCLT to entertain application to defreeze the demat account. 30.13 Ld. Counsel for the Respondent No.1 in company Appeal No. 1862 of 2024 submits that he approached BSE and NSE for de-freezing the demat account but was refused. Hence, she filed IA No. 928/2023 seeking de- freezing of the demat account and by passing the Impugned Order the demat account was unfrozen and the shares there after were sold for Rs. 1,36,65,499.2/- and amount has been distributed to the creditors on an undertaking to abide by any orders passed by this Hon'ble Tribunal. Admittedly, the shares in the demat account of the CD were owned by it and there is no controversy or dispute surrounding the same. 30.14 It is further submitted that Ld. Adjudicating Authority is having jurisdiction to pass the impugned order as R1 is neither challenging the validity of the actions of the stock excha....
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....e to BSE or SEBI are 'operational debt' and that Section 238 of the Code Overrides Section 28A of the SEBI Act. The case of Hemant Mehta v ACST, CA(AT)(Ins) No. 328/2022 dt. 05.08.2022 has also been relied to show that, where bank accounts had been frozen by GST authorities, the Adjudicating Authority has jurisdiction to interfere under Section 60(5). 30.17 Ld. Counsel for the Respondent No. 1 has further placed reliance on ED v Manoj Kumar Agrawal, CA(AT)(Ins) No. 575/2019 dt. 09.04.2021 that attachments cannot continue and property would be available till resolution in terms of Section 32A of the Code. Three-member judgment of this Appellate Tribunal in Vantage Point Asset Management Pte Ltd. v Gaurav Misra, 2025 SCC Online NCLAT 1652 has also been relied wherein it is held that properties attached under PMLA prior to initiation of insolvency proceedings could be included in the information memorandum and could be part of a resolution plan. ABG Shipyard Liquidator v CBITC, (2023) 1 SCC 472 is also highlighted wherein the Hon'ble Supreme Court held that the Code overrides the Customs Act. It is submitted that the appeal is liable to be dismissed. Analysis and Findings 31.....
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....s in the domain of the exchange and the NCLT does not have jurisdiction to entertain any application for de freezing of these demat accounts as the same could only be done by an appropriate authority established under the securities law framework, more so when the same was not having any nexus with the Insolvency/liquidation of the CD and was connected solely with the obligations of listed entities and promoter of listed entities, to be discharged under the securities law framework. 33. At this juncture, it would be relevant to have a glance on the relevant provisions of the SCRA, LODR Regulations and SOP Circulars issued by the appellant. Section 9 of the SCRA, 1956 is reproduced as under: "Power of recognised stock exchanges to make bye-laws. 9. (1) Any recognised stock exchange may, subject to the previous approval of the 27[Securities and Exchange Board of India], make bye-laws for the regulation and control of contracts. (2) In particular, and without prejudice to the generality of the foregoing power, such bye-laws may provide for: (a) the opening and closing of markets and the regulation of the hours of trade; (b) a clearing ho....
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.... (m) the listing of securities on the stock exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities; (n) the method and procedure for the settlement of claims or disputes, including settlement by arbitration; (o) the levy and recovery of fees, fines and penalties; (p) the regulation of the course of business between parties to contracts in any capacity; (q) the fixing of a scale of brokerage and other charges; (r) the making, comparing, settling and closing of bargains; (s) the emergencies in trade which may arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in such emergencies, including the power to fix maximum and minimum prices for securities; (t) the regulation of dealings by members for their own account; (u) the separation of the functions of jobbers and brokers; (v) the limitations on the volume of trade done by any individual member in exceptional circumstances; (w) the obligation of....
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.... shall, in addition to liability for action in terms of the securities laws, be liable for the following actions by the respective stock exchange(s), in the manner specified in circulars or guidelines issued by the Board: (a) imposition of fines; (b) suspension of trading; (c) freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories. (d) any other action as may be specified by the Board from time to time (2) The manner of revocation of actions specified in clauses (b) and (c) of sub-regulation (1), shall be as specified in circulars or guidelines issued by the Board. Section 11 A of the Securities and Exchange Board of India Act, 1992 is reproduced as under: Securities and Exchange Board of India Act, 1992 11A. (1) Without prejudice to the provisions of the Companies Act, 1956 (1 of 1956), the Board may, for the protection of investors, - (a) specify, by regulations- (i) the matters relating to issue of capital, transfer of securities and other matters incidental thereto; and (ii) the manner in which such matters sha....
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....y of the stipulated periods indicated in the aforementioned notices, forthwith intimate the depositories to freeze the entire shareholding of the promoter(s) in such entity as well as all other securities held in the demat accounts, if the non-compliant listed entity fails to comply with the aforesaid requirement(s) and/or pay fine levied. The depository(ies) shall immediately freeze such demat accounts and also intimate the promoter(s) about the details of non-compliances resulting in freezing of their demat accounts. 7. If the non-compliant listed entity subsequently complies with the respective requirement(s) and pays the fine levied, in terms of this circular, the concerned recognized stock exchange(s) shall display on their website details of compliance and fines paid by the listed entity. Simultaneously, the recognized stock exchange(s) shall intimate the depositories to unfreeze the entire shareholding of the promoter(s) in such entity as well as all other securities held in the demat account of the promoter(s), immediately from the date of compliance. 8. If any non-compliant listed entity fails to pay the fine despite receipt of the notice as stated above,....
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....k exchange is necessarily required to be resolved and taken care of within the securities law frame work including SEBI Regulations and SoP Circulars discussed herein before. 39. At this juncture, it is also necessary to recall the relevant provisions of the Insolvency and Bankruptcy Code, 2016 (Code) to understand the jurisdiction of the NCLT as provided under Section 60(5) of the Code and also the relevant provisions of the Code which deals with the duty of the IRP/RP as well as the liquidator with regard to dealing with the properties of the CD. "Section 16 Appointment and tenure of Interim Resolution Professional (1) The Adjudicating Authority shall appoint an interim resolution professional 1[on the insolvency commencement date]. (2) Where the application for corporate insolvency resolution process is made by a financial creditor or the corporate debtor, as the case may be, the resolution professional, as proposed respectively in the application under section 7 or section 10, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him. (3) Where the application for corporate insolvency....
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....he authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor; (d) have the authority to access the books of account, records and other relevant documents of corporate debtor available with government authorities, statutory auditors, accountants and such other persons as 1[may be specified; and]. [(e) be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor.]. Section 18 Duties of Interim Resolution Professional The interim resolution professional shall perform the following duties, namely: - (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all ....
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....resolution professional may make an application to the Adjudicating Authority for necessary directions. (3) The Adjudicating Authority, on receiving an application under sub-section (2), shall by an order, direct such personnel or other person to comply with the instructions of the resolution professional and to cooperate with him in collection of information and management of the corporate debtor. Section 20 Management of operations of corporate debtor as going concern. (1) The interim resolution professional shall make every endeavor to protect and preserve the value of the property of the corporate debtor and manage the operations of the corporate debtor as a going concern. (2) For the purposes of sub-section (1), the interim resolution professional shall have the authority- (a) to appoint accountants, legal or other professionals as may be necessary; (b) to enter into contracts on behalf of the corporate debtor or to amend or modify the contracts or transactions which were entered into before the commencement of corporate insolvency resolution process; (c) to raise interim finance provided that no security interest ....
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....ional to continue to function as the resolution professional until such time as the Board confirms the appointment of the proposed resolution professional. Section 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 sub-section (1), the resolution professional shall undertake the following actions, namely: - (a) take immediate custody and control of all the assets of the corporate debtor, including the business records of the corporate debtor; (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings; (c) raise interim finances subject to the approval of the committee of creditors under section 28; (d) appoint accountants, legal or other professionals in the manner as specified by Board; (e) maintain an updated list of claims; (f) convene and attend all meetings of the committee of cre....
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....ecified by the Board and prepare a report; (d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers necessary; (e) to carry on the business of the corporate debtor for its beneficial liquidation as he considers necessary; (f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may be specified; [Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in liquidation to any person who is not eligible to be a resolution applicant]. (g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business; ....
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....ion to the corporate debtor. (2) The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors. (3) Subject to sub-section (4), the liquidation estate shall comprise all liquidation estate assets which shall include the following: - (a) any assets over which the corporate debtor has ownership rights, including all rights and interests therein as evidenced in the balance sheet of the corporate debtor or an information utility or records in the registry or any depository recording securities of the corporate debtor or by any other means as may be specified by the Board, including shares held in any subsidiary of the corporate debtor; (b) assets that may or may not be in possession of the corporate debtor including but not limited to encumbered assets; (c) tangible assets, whether movable or immovable; (d) intangible assets including but not limited to intellectual property, securities (including shares held in a subsidiary of the corporate debtor) and financial instruments, insurance policies, contractual rights; (e) assets subject to the determination of ownership by the court or au....
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.... any subsidiary of the CD, financial instruments, insurance policies and also the assets subject to the determination of the ownership by a court or authority. (Section 18 of the Code). Section 25 of the Code provides that it shall be the duty of the RP to protect and preserve the assets of the CD and for this purpose the RP shall immediately take custody and control of all the assets of the CD, represent the CD with third party and also to prepare information memorandum. 41. Likewise, the liquidator is duty bound to take into his custody or control all the assets, property and actionable claims of the CD and to take such measures to protect and preserve the assets and properties of the CD as he considers necessary and also to sell immovable and movable properties and actionable claims of the CD by public auction (Section 35 of the Code). The liquidator is further obliged to form a liquidation estate of the assets of the CD and shall hold the same as a fiduciary for the benefit of all the creditors. Thus the scheme as provided in the IBC empowers the IRP/RP and liquidator of the CD to immediately take the custody of the properties and assets of the CD and to further deal with th....
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....bout the powers and jurisdiction of the NCLT. **************************************************************** ****** 37. From a combined reading of sub-section (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 the 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. Clause (c) of sub-section (5) of Section 60 is very broad in its sweep, in that it speaks about any question of law or fact, arising out of or in relation to insolvency resolution. But a decision taken by the Government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase "arising out of or in relation 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 han....
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....corporate debtor with third parties and exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. Sections 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 sub-section (1), the resolution professional shall undertake the following actions: (a) *** (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings;" (emphasis supplied) This shows that wherever the corporate debtor has to exercise rights in judicial, quasi-judicial proceedings, the resolution professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5). 41. Therefore in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has t....
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.... which relate to the insolvency of the corporate debtor. However, in doing so, we issue a note of caution to NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the corporate debtor. The nexus with the insolvency of the corporate debtor must exist. 74. Therefore, we hold that the RP can approach NCLT for adjudication of disputes that are related to the insolvency resolution process. However, for adjudication of disputes that arise dehors the insolvency of the corporate debtor, the RP must approach the relevant competent authority. For instance, if the dispute in the present matter related to the non-supply of electricity, the RP would not have been entitled to invoke the jurisdiction of NCLT under IBC. However, since the dispute in the present case has arisen solely on the ground of the insolvency of the corporate debtor, NCLT is empowered to adjudicate this dispute under Section 60(5)(c) of IBC. I.3. Residuary jurisdiction of NCLT under Section 60(5)(c) 84. The respondents have relied upon the decision of thi....
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....5. In TATA Consultancy Services Ltd. v. SK Wheels (P) Ltd. (Resolution Professional), 2021 SCC OnLine SC 1113, Hon'ble Supreme Court cautioned the NCLT in exercising jurisdiction even at interim stage, in following words; "31. While in the present case, the second issue formulated by this Court has no bearing, we would like to issue a note of caution to NCLT and NCLAT regarding interference with a party's contractual right to terminate a contract. Even if the contractual dispute arises in relation to the insolvency, a party can be restrained from terminating the contract only if it is central to the success of CIRP. Crucially, the termination of the contract should result in the corporate death of corporate debtor. The jurisdiction of NCLT under Section 60(5)(c) of IBC cannot be invoked in matters where a termination may take place on grounds unrelated to the insolvency of corporate debtor. Even more crucially, it cannot even be invoked in the event of a legitimate termination of a contract based on an ipso facto clause ...... 33. Admittedly, this Court has clarified the law on the present subject-matter in Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. ....
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.... the court ought not to substitute its own view by supplanting the role of the expert. Courts do not act as appellate authorities over policies framed by the statutory regulator and may interfere only when it is found that the actions are arbitrary or violate of constitutional or statutory mandates. The court cannot examine the correctness, suitability, or appropriateness of the policy, particularly when it is framed by a specialised regulatory agency in collaboration with experts. The court cannot interfere merely because in its opinion a better alternative is available. 49. The Hon'ble Supreme Court in BALCO Employees' Union v. Union of India, (2002) 2 SCC 333 observed that it is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. 50. The Hon'ble Supreme Court again in ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1 held as under: "84.............. Section 60(5), when it speaks of the NCLT having jurisdiction to entertain or dispose of any application or proceeding by or against the corporate de....
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....d with residuary jurisdiction and it therefore casts a responsibility on the Adjudicating Authority to intervene in certain circumstances. The present is also a fit case where the Adjudicating Authority could have exercised its residuary discretion under Section 60(5) so as to ensure that the objectives of IBC are not frustrated including providing relief to the Liquidator in stalemate circumstances as the present. It has also been held by the Hon'ble Supreme Court in the Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (Civil Appeal No. 9241 of 2019) that the residuary jurisdiction of the NCLT under Section 60(5)(c) of the IBC provides it a wide jurisdiction and can be exercised as long as the matter is not dehors the insolvency proceedings. 17. Given that the persistent efforts on the part of the Appellant to defreeze the accounts of the Corporate Debtor did not bear any result; given that there is sufficient proof of reluctance on the part of Respondents 1 to 4 to defreeze the bank accounts of the Corporate Debtor; given that Section 238 of IBC overrides anything inconsistent contained in any other enactment and also given that Section 60(5) of the IBC vests residuary ju....
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....unal again opined as under; "110. 'Tribunal' makes it candidly clear that filing of Application under Section 60(5) of the I & B Code is not an 'all pervasive' one, thereby conferring 'Jurisdiction' to an 'Adjudicating Authority' (NCLT) to determine 'any question/issue of priorities', question of Law or Facts pertaining to the 'Corporate Debtor' when in reality in 'Law', the 'Adjudicating Authority' (NCLT) is not empowered to deal with the matters falling under the purview of another authority under PMLA." 56. Reliance has been placed by the Appellant on the judgement of this Appellate Tribunal in Regional Provident Fund Commissioner Vs. T.V. Balasubramanian (RP) (Sholingur Textiles Limited) & Anr. (Company Appeal (AT) (Ins) N0. 1521 of 2019 wherein the attachment made by the EPFO before initiation of the CIRP was held to be valid. 57. In P. Mohanraj and Others Vs. Shah Brothers Ispat Private Limited, (2021) 6 SCC 258 Hon'ble Supreme Court has considered the applicability of moratorium on the act of statutory Authority and held that no Sections 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings ca....
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....t Regulations Rules of 1957 is hit by either Moratorium under section 14 or under section 238 of the Code. It is an issue in relation to Investors therefore, such an issue cannot be construed as inconsistent with the provisions of I&B Code, therefore, this Bench is of the opinion that the action of National Stock Exchange or Bombay Stock Exchange is neither connected to the prohibitions given." 59. Reliance is also placed on the judgement of the Hon'ble Supreme Court in Kishorebhai Khamanchand Goyal Vs. State of Gujarat and Another (2003) 12 SCC 274 in order to emphasise that the overriding effect of the IBC by virtue of section 238 of the IBC could only be enjoyed when the following tests are passed: "(1) Whether there is direct conflict between the two provisions. (2) Whether the legislature intended to lay down an exhaustive Code in respect of the subject-matter replacing the earlier law. (3) Whether the two laws occupy the same field." 60. Ld. Counsels for the Appellant and Respondent No.3 have also placed reliance on the case decided by NCLT Mumbai in Shobha Limited. & Sadash Lazman Jogalekar v. Pancard Clubs Ltd, CP No. 593 and 1085 of 2016 da....
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....on 142-A of the Customs Act, 1962 was in issue - authorities had submitted that dues payable to it were to be treated as "first charge" on the property of the assessee concerned. In the resolution process, it was argued that the Customs Act, 1962 acquired primacy and had to be given effect to. This Court, after noticing the overriding effect of Section 238 IBC, held as follows: (SCC p. 496, paras 56-57) "56. For the sake of clarity following questions, may be answered as under: (a) Whether the provisions of IBC would prevail over the Customs Act, and if so, to what extent? 56.1. IBC would prevail over the Customs Act, to the extent that once moratorium is imposed in terms of Sections 14 or 33(5) IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act. (a) Whether the respondent could claim title over the goods and issue notice to sell the goods in terms of the Customs Act when the liquidation process has been initiat....
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....itors, who are private persons." 64. It is submitted by Ld. Counsel for the Respondent No.1 that the liability on the CD is vicarious and the same has arisen on account of failure of FRL to pay the ALF and the CD may not be held vicariously liable to pay the ALF. Reliance in this regard is placed on the judgement of the Hon'ble Supreme Court in State Bank of India v. Smt. Shyama Devi (1978) 3 SCC 399, Dilip Hariramani v. Bank of Baroda (2024) 15 SCC 443 and Ashutosh Ashok Parasrampuriya and Anr. V Gharrkul Industries Private Limited (2023) 14 SCC 770. 65. Ld. counsel for the appellant and Respondent No.3 in rebuttal has placed reliance on Dolphin Offshore Enterprises (India) Limited v. Bombay Stock Exchange Limited (BSE), IA/5538/2023 In C.P.(IB)/4087(MB)/C-III-2018 decided by the NCLT wherein after approval and implementation of the Resolution Plan, and after the decision of the new management to continue trading of the shares of the Applicant on BSE, the new management applied to the BSE for which reinstatement fee as per the SEBI LODR was asked to be paid and quantum of which, on an application by the Applicant, was suitably reduced. Further the applicant paid such fees on....
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....iate directions for providing statutory relief to the appellants. 67. In Vantage Point Asset Management Pte. Ltd. vs. Gaurav Mishra (RP) and Anr., CA (AT) (Ins) No. 1495 of 2024 decided on 14.010.2025, a co-ordinate Bench of this Appellate Tribunal while considering the applicability of Section 32 A of the Code came to the conclusion that by provisional attachment of the property by the Directorate of Enforcement the ownership rights of the CD may not be divested and it may not be said that the CD does not continue to be the owner of the asset and despite attachment the CD is entitle to enjoy that property. 68. In Ms. Anju Agarwal RP v. Bombay Stock Exchange & Ors., (2019) ibclaw.in 123 NCLAT, this Appellate Tribunal held that Section 14 of the Code will prevail over Section 28A of the SEBI Act, 1992 and Securities Exchange Board of India cannot recover any amount including the penalty from the Corporate Debtor. The Bombay Stock Exchange for the same very reason cannot take any coercive steps against the Corporate Debtor nor can threaten the Corporate Debtor for suspension of trading of shares. The Bombay Stock Exchange deals with the shares. The shares of the Corporate Debto....
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.... or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case may be, of the corporate debtor pending in any court or tribunal shall stand transferred to the adjudicating authority dealing with insolvency resolution process or liquidation proceeding of such corporate debtor. (4) The National Company Law Tribunal shall be vested with all the powers of the Debts Recovery Tribunal as contemplated under Part III of this Code for the purpose of sub-section (2). (5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of- (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. (6) Notwithstanding ....
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....rom or relate to the insolvency of the corporate debtor and nexus with the insolvency of the corporate debtor must exist. 72. Since much emphasis has been given by Ld. Counsels for the Appellant and Respondent No.3 on the two cases (Embassy Property Developments (P) Ltd. and Gujrat Urja Vikas Nigam (Supra). It is pertinent to mention that in the facts of the case of Gujrat Urja Vikas Nigam (Supra) PPA was terminated solely on the ground of insolvency since the event of default contemplated was the commencement of insolvency proceedings against the corporate debtor. In absence of the insolvency of the corporate debtor, there would be no ground to terminate the PPA. The termination was not independent of the insolvency, therefore, the dispute in that case was solely arising out of and relates to the insolvency of the corporate debtor and it was thus held that the RP can approach the NCLT for adjudication of the dispute which was related to the insolvency resolution. 73. In the case of Embassy Property Developments Pvt. Ltd. (Supra), the corporate debtor was holding a mining lease granted by the Government of Karnataka which was to expire on 25.05.2018. A notice for premature te....
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....he Insolvency Resolution or Liquidation Proceedings of the Corporate Debtor or Corporate Person under this Code, in our, considered opinion, the issue of de-freezing of the Demat account of the CD, wherein the shares, which are admittedly the property of the CD, were lying, was/is a question of fact arising out of and in relation to the insolvency resolution and liquidation proceedings of the corporate debtors, as provided under Section 60 (5) (c) of the Code. 75. We earlier in this judgment while discussing the SEBI Act, SCRA, LODR Regulations and Circulars issued by the SEBI have stated that the main object of framing these Regulations and Act is to streamline the Regulatory framework of the Securities at the exchange and any entity which will comply with the provisions contained therein would only be entitled to transact business at the exchange and in this regard ample powers have been provided to the appellant to regulate and streamline such business and in doing so the powers have also been given even to impose penalties on those entities which are not compliant with these Regulations/Circulars and the power also lies with the appellant to freeze the demat accounts of such....
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....th regard to the ownership of shares lying in the Demat account, Ld. NCLT was certainly having jurisdiction to entertain an application for de freezing of the aforesaid Demat accounts. We at this juncture, recall that in Embassy Property Development Pvt. Ltd. (supra) Hon'ble Supreme Court while considering the jurisdiction of NCLT under Section 60 (5) (C) of the IBC precisely in paragraph no. 37 held that the jurisdiction of the NCLT delineated under Section 60 (5) cannot be stretched so far as to bring absurd results and held that it will be a different matter if proceedings under statutes like Income Tax Act had attained finality, the dues payable to the Government would come within the meaning of the expression operational debt under Section 5 (21) of the Code, making the Government operational creditor in terms of Section 5 (20) and further clarified that the moment the dues to the Government are crystallized and what remains is only the payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the Resolution Plan as approved by the Adjudicating Authority namely the NCLT. 78. Thus a distinction has been carved out by the Hon'ble....
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....and the impugned orders have been passed in valid exercise of such jurisdiction. 81. For the reasons mentioned herein before, we do not find any good ground to interfere in the impugned judgments. 82. In result, we do not find any merit in the appeals and the same are dismissed as such. There is no order as to costs. 83. Pending I.A.'s if any are hereby closed. ============= Document 1 à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchan Board of India GENERAL MANAGER CORPORATION FINANCE DEPARTMENT COMPLIANCE AND MONITORING DEPARTMENT - II CFD/CMD/AAD/SG/BM/OW/03859/2021 February 11, 2021 Ms. Latika Kundu, MD and CEO, Metropolitan Stock Exchange of India Ltd., Vibgyor towers, Bandra-Kurla Complex, Bandra (E) Mumbai Mr. Neeraj Kulshrestha, Chlef Regulatory Officer, Bombay Stock Exchange Ltd., Floor 25, P J Towers, Dalal Street, Mumbal Ms. Priya Subbaraman, Chief Regulatory Officer, National Stock Exchange of India Ltd, Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai Sub: Standard Operating Procedure....
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.... entity. Stage 3: Freezing of shareholding of promoter(s) 3.3. If the sald listed entity fails to pay ALF within the stipulated period as per the notice stated above, the concemed recognized stock exchange(s), upon expiry of the period indicated in the notice, shall issue notice to the promoter(s) of such entity, to ensure compliance with the requirement(s) and pay ALF within 30 days from the date of such notice falling which the stock exchange shall go ahead with freezing of the demat account(s) of the promoter(s). While issuing the aforementioned notices, the recognized stock exchange shall also send intimation to other recognized stock exchange(s) where the shares of the said entity are listed. 3.4. The stock exchange shall also give an opportunity to such promoter(s) of being heard/ of providing a written representation against freszing of their demat account(s). 3.5. In case of failure of non-payment of ALF, the concemed recognized stock exchange(s) may, after giving a reasoned explanation in writing for accepting/rejecting the representation (personal hearing or written) by the * promoters, freeze the demat account(s) of promoter(s). The exchange and depository(ie....
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....said entity may be allowed on "trade to trade basis' on the first trading day of every week, till the time of payment of ALF by the listed entity. 4. Stock exchanges may deviate from the above by granting exemption/ waiver on the above, wherever desired. TAR 5. The recognized stock exchanges may keep in abeyance the action against any sald entity dr withdraw the action in specific cases where specific exemption from compliance with The requirements under the Listing Regulations/moratorium on enforcement proceedings has been provided for under any Act, Court/Tribunal Orders etc. S. Randhawa Delhi Regd. No. 17815 INDIA. VT OF Document 4 à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India अनà¥à¤µà¤°à¥à¤¤à¥€ : Continuation : 4 Applicability of the SoP 6. The above SoP is applicable with Immediate effect and shall supersede the notices/ circulars dated June 11, 2019 and November 06, 2020, previously Issued by the exchanges on the subject matter. Accordingly, no fu....