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2018 (9) TMI 1226 - Tri - Insolvency and BankruptcyOverriding effect of provision of Insolvency and Bankruptcy Code, 2016 - attachment orders - Held that:- Proceeding under the sick industrial Companies (special provisions) repeal act 2003 was not, having overriding effect over other laws. But section 238 of the Insolvency And Bankruptcy Code 2016 specifically provides that the provisions of this Court shall effect, notwithstanding anything inconsistent in addition to that contained in any other law for the time being in force or any instrument affecting by any such law. Since the provision of Insolvency and Bankruptcy Code, 2016 has an overriding effect, and there exists a direct inconsistency between the provisions of liquidation as provided in Chapter 3rd of the I.B. Code, 2016 with the provision for attachment of assets for recovery of dues for supply of electrical energy under the U.P. Electricity Supply Code, 2005/ U.P. Government Electrical Undertaking (dues recovery) Act, 1956, therefore provisions of IB code shall prevail. The attached property is also a part of liquidation estate, under the purview of liquidation estate, which is available for benefit of all creditors as per provision of Section 36 (2) of the Code. If the attachment continues, the property would become available for the benefit of the respondents only, who are also secured operational creditors and ranks equally with other secured financial creditors under the Provisions of Section 53 of the Insolvency and Bankruptcy Code, 2016.Therefore, the property of the creditor which have been attached by the District Magistrate, Muzaffarnagar and Tehsildar, Muzaffarnagar is a part of liquidation estate. Since under liquidation process, it has to be sold and after that realised value will be distributed regarding provision of Section 53 of I.B. Code, 2016. It is also on record that by order of District Magistrate a notice board is on display at that attached property, which show that sale of the attached property is prohibited by order of the District Magistrate. In such situation, liquidator can never find any buyer to purchase the property. Therefore, we allow this company application and pass an order to the District Magistrate and Tehsildar Muzaffarnagar for immediate release of the attached property in favour of liquidator, so that he may sell the property, and after realisation of the value of the property it may be distributed in accordance with the relevant provisions of the I&B. Code, 2016. It is also to make clear that P.V.V.N.L also comes under the definition of secured operational creditor, who can realize their dues in the liquidation proceedings as per law after submitting their claim before the liquidator.
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