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2021 (5) TMI 185 - AT - Insolvency and BankruptcySeeking release of attached property and to restore possession - property of Corporate Debtor who is not a financial establishment as defined under Section 2(e) WBPIDFE Act - assets of the Corporate Debtor should be kept outside the purview of sale or not - consistency of provision of Section 3 of the WBPIDFE Act with Sections 14 and 33(5) of the IBC - whether Section 14 as well as Section 33(5) of the IBC shall prevail over Section 3 of WBPIDFE Act?. Whether the property of Corporate Debtor who is not a financial establishment as defined under Section 2(e) WBPIDFE Act can be attached? - HELD THAT:- Under the WBPIDFE Act, the property acquired either in the name of a financial establishment or in the name ofany other person on behalf of such financial establishment can also be attached. In the present case, the property of the Corporate Debtor is attached on the allegation that Corporate Debtor is one of the Companies of Pincon Group Companies and the Pincon Group Companies had fraudulently accepted the deposits and all the money went to Corporate Debtor and the Corporate Debtor had purchased the attached properties with the money of the depositors. In this regard, the appellant placed reliance on the findings of the designated court - There is nothing on record that Corporate Debtor had raised any objection under Section 14(3) of the WBPIDFE Actthat the properties were wrongfully attached and produced before the court. In such circumstances, we are unable to convince with the argument of Ld. counsel for the respondent that the findings of the designated court are not binding on the Corporate Debtor - thus, the properties of the corporate debtor can be attached. Whether High Court of Calcutta in WP No. 24110(W)of 2016 vide order dated 23.04.2019 directed that the assets of the Corporate Debtor should be kept outside the purview of sale? - HELD THAT:- High Court have not placed on record any objection which has been filed under section 14 (3) of WBPIDFE Act. In such a situation, it cannot be said that the Hon’ble High Court directed that the assets of the Corporate Debtor be kept outside the purview of sale. Whether the provision of Section 3 of the WBPIDFE Act is inconsistent with Sections 14 and 33(5) of the IBC. Therefore, Section 14 as well as Section 33(5) of the IBC shall prevail over Section 3 of WBPIDFE Act? - HELD THAT:- In this case, the properties of the Corporate Debtor were attached during 10.11.2017 to 17.11.2017 and after investigation DEO, WB filed charge sheet on 31.01.2018 under Sections 406, 409, 420 and 120B of IPC and under Section 3(1)(e) of the WBPIDFE Act against 41 accused persons, including Manoranjan Roy Director of the M/s Pincon Spirits Ltd. On 16.04.2018, the registered office of M/s. Pincon Spirits Ltd. (Corporate Debtor) was sealed. Thereafter, on 26.04.2018 and 25.02.2019, various properties of M/s Pincon Spirits Ltd. were attached by the DEO, WB. Meanwhile, on 19.07.2018 initiated CIRP against M/s Pincon Spirits Ltd. Thus, admittedly, the properties of M/s Pincon Spirits Ltd. were seized and the registered office was sealed much prior to the initiation of CIRP - the moratorium has been declared after the properties were attached by the DEO, WB and produced before the Designated Court of Economic Offences - Section 14 of the IBC has no overriding effect on Section 3 of the WBPIDFE Act. Whether Section 33 (5) of the IBC prevails over Section 3 of the WBPIDFE Act? - HELD THAT:- No resolution plan was approved which resulted in the change in control of the Corporate Debtor, therefore, there is no bar to take action against the property of the Corporate Debtor in connection with the offence. The explanation to sub-section (2)has clarified that the words and actions against the Corporate Debtor in relation to an offence would include the attachment, seizure, retention or confiscation of such property under the law applicable to the Corporate Debtor. Since the word ‘include’ issued under sub-clause 1 of the explanation, the word ‘action’ against the property of the Corporate Debtor is intended to have the widest possible amplitude. There is a clear nexus with the object of the IBC. The other part of the clarification under the explanation is found in the second sub-clause of the explanation. The Director of the Corporate Debtor and the property of the Corporate debtor cannot get immunity from the prosecution. Thus, the attached property, which is confiscated by the Designated Court of Economic Offences, cannot be de-attached - Now the attached property is not in possession and control of the DEO, WB. Therefore, as per the impugned order DEO, WB cannot de-attach the property which is already confiscated by the Designated Court of Economic Offences. The impugned order is not sustainable in law therefore, the order is hereby set aside - Appeal allowed.
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