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2020 (5) TMI 666 - Tri - Insolvency and BankruptcyRemoval of provisional attachment - attachment of assets of the corporate debtor, specifically the land, buildings, capital works in progress, plant, machinery, furniture, etc. - overriding effect of IBC over PMLA - contention of the learned counsel is that the effect of the Provisional Attachment Order is to create an encumbrance on the assets of the Corporate Debtor. The moratorium prohibits creation of any encumbrance over the assets of the Corporate Debtor - whether respondent no. 1 can issue Provisional Attachment Order against the assets of the Corporate Debtor during the currency of moratorium order passed under section 14 of the I&B Code? - section 5(1) of PMLA, 2002 - HELD THAT:- The admitted fact is that CIRP has commenced against the Corporate Debtor -company, viz. LMIPHL. The Provisional Attachment Order was issued on 30.12.2019 by attaching the assets of the Corporate Debtor under the relevant provisions of the PML Act. The attachment is challenged on the ground that the proceedings under the PML Act are of civil nature. Therefore, the proceedings are hit by moratorium order passed under section 14 of the I&B Code. The attachment will have effect on creating encumbrance over the assets of the Corporate Debtor which is prohibited by virtue of moratorium order. The Provisional Attachment Order is also challenged on the ground that the provisions of the I&B Code have overriding effect by virtue of section 238 of the I&B Code. So, any order passed under section 14 of the I&B Code will prevail against any order passed under the PML Act as regards the assets of the Corporate Debtor. The contention of the learned counsel is that the provisions of the I&B Code will have overriding effect over other laws. By virtue of section 238 of the I&B Code, when an order under section 14 of the I&B Code is passed, then attachment cannot be effected under the PML Act - As against this it is the contention of the learned counsel for the ED that the proceedings under the PML Act are different than the proceedings under the I&B Code. Proceedings are initiated under the PML Act in connection with involvement of proceeds of crime. Therefore, moratorium has no application. The applicant cannot take shelter under section 32A(2) of the I&B Code, because when Provisional Attachment Order was passed there was no resolution plan approved by the COC, which was confirmed by the Adjudicating Authority under section 31 of the I&B Code - In the present case, no Resolution Plan is approved by the COC as on the date of the Provisional Attachment Order. Therefore, section 32A(2) of the I&B Code will not apply to the Provisional Attachment Order passed by respondent no. 1. Application dismissed.
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