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2020 (10) TMI 332 - Tri - SEBIInterpretation of Statute - Whether Section 14 and 238 of IBC 2016 have an overriding effect on the provision of Section 28 of SEBI Act? - HELD THAT:- IBC which is a complete code in itself was enacted in the year 2016 and the law makers after considering the various acts prevailing at that time have framed the IBC to have a faster resolution process at par with developed countries with the primary objective of maximisation of value of assets to all stake holders. The preamble of IBC clearly mentions that the objective of the Code is maximisation of value of assets, to promote entrepreneurship, availability of credit and balance the interest of all stake holders in a time bound manner, whereas the primary object of SEBI is to protect the interest of the investors in securities market and to promote the development to regulate the securities and for matters connected therewith - it is evident that IBC is clearly a time bound action with a wider remit, whereas SEBI was given a broad mandate to protect the interest of investors and the IBC which had brought into force after considering various acts prevailing at that point of time must have also been considered SEBI Act and its implication in the corporate debtor and its operations. Therefore Section 14(1) in IBC which came into force after the enactment of IBC 2016 has precedence over Section 28A of SEBI Act. It is pertinent to go through the judgment of the Hon'ble Supreme Court in Innoventive Industries. Vs. ICICI Bank and others [2017 (9) TMI 58 - SUPREME COURT ] where Hon'ble Supreme Court shows the primacy of IBC over other Acts. Thus, the issue framed in the instant application got an overwhelming affirmative answer that Sections 14 and 238 of IBC has an overriding impact on Section 28A of SEBI Act when an application is admitted under CIRP under Section 7, 9 or 10 of IBC - As both the Central Acts are having similar objectives, instead of clinging to over the supremacy of the Act the Recovery Officer appointed by the SEBI under Section 28A may cooperate with the Resolution Professional in protecting the interests of the investors as well as finding a quicker resolution in the instant application. SEBI is suggested to direct their Recovery Officer to cooperate with the Resolution Professional and if required be a part of the CoC as an observer for a quicker resolution and maximisation of the value of the assets of the corporate debtor. Thus, it is concluded that Section 14 and Section 238 of IBC 2016 has an overriding effect on Section 28A of SEBI Act. As such there is no need to modify our earlier order dated 18.9.2019 - SEBI is not barred from taking any action as it may deem fit, against the directors, shareholders and key management personnel of the Corporate Debtor for their fraudulent acts. Application dismissed.
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