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2020 (2) TMI 917 - AT - Insolvency and BankruptcyApproval of resolution plan - CIRP proceedings - immunity from Attachment of assets after approval of Resolution Plan - money laundering - whether after approval of a ‘Resolution Plan’ under Section 31 of the Insolvency and Bankruptcy Code, 2016, is it open to the Directorate of Enforcement to attach the assets of the ‘Corporate Debtor’ on the alleged ground of money laundering by erstwhile Promoters? HELD THAT:- The Directorate of Enforcement has not been empowered under ‘I&B Code’ to decide the question. Even if the stand taken by the Directorate of Enforcement is accepted that ‘JSW Steel Limited’ is a ‘related party’ of ‘M./s. Bhushan Power & Steel Ltd.’- (‘Corporate Debtor’), the Directorate of Enforcement cannot decide whether ‘JSW Steel Limited’ is ineligible under Section 29A or Section 32A (1) (a) which can be determined by the ‘Committee of Creditors’/ Adjudicating Authority - Section 29A was inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 dated 18th January, 2018 with retrospective effect i.e. from 23rd November, 2017. The main object that persons, who are ineligible in terms of clauses (a) to (j) are excluded from acquiring the company. If a person becomes ineligible because of his own act, such person is not eligible to submit a ‘Resolution Plan’ individually or jointly or in concert with - However, on the direction of the Central Government, if a person is asked to join hands with others for compliance of such direction a person cannot be held to be ineligible on the ground of ‘related party’. The attachment of assets of the ‘Corporate Debtor’ by the Directorate of Enforcement pursuant to order dated 10th October, 2019 as illegal and without jurisdiction. The assets of the ‘Corporate Debtor’ (‘Bhushan Power & Steel Limited’) of which ‘JSW Steel Limited’ is a ‘Successful Resolution Applicant’ is immune from attachment by the Directorate of Enforcement. Resolution plan - Held that:- the distribution on the profit made during the ‘Corporate Insolvency Resolution Process’ should be made in terms of addendum to the RFP as held by the Hon’ble Supreme Court. - The Monitoring Committee with the help of the ‘Resolution Professional’ will now go through the RPF issued in terms of Section 25 of the ‘I&B Code’ and as consented to by the ‘Resolution Applicant’ (‘JSW Steel Limited’) will make distribution of profit accordingly. The condition imposed at paragraph 128 (j) stands substituted with the aforesaid observations. The impugned Judgment dated 5th September, 2019 passed by the Adjudicating Authority approving the plan submitted by ‘JSW Steel Limited’ is approved with aforesaid modification/ clarification as made above. The order of stay of implementation of the plan stands vacated. The approved plan be given effect immediately in the manner as ordered by the Adjudicating Authority and modified/ clarified by this Appellate Tribunal.
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