2021 (11) TMI 2 - HC - Money Laundering

Money Laundering - pre-conditions under Section 32A of the IBC is satisfied or not - HELD THAT - It is made clear that WP(C) 4680/2021 shall be listed on 30th November 2021 to receive the status report as directed pertaining to the issue of appointments and vacancies at the Adjudicating Authority under the PMLA. For the said purpose only WP(C) 4680/2021 shall be treated as a part heard matter.

Summary

Issues involved:
1. Fresh look at freezing orders under Section 60 of the Prevention of Money Laundering Act, 2002.
2. Benefit of Section 32A of the Insolvency and Bankruptcy Code, 2016 for a company under insolvency.

Issue 1: Fresh look at freezing orders under Section 60 of the Prevention of Money Laundering Act, 2002:

The court perused an affidavit filed by the Respondent-Enforcement Directorate (ED) and considered submissions by the counsels. A fresh affidavit was presented by the Petitioner in one of the cases, highlighting discrepancies in the inspection of records compared to the ED's affidavit. Both counsels for the ED expressed willingness to reevaluate freezing orders and related proceedings under Section 60 of the PMLA, acknowledging these matters as among the first under this section. The ED agreed to reconsider the freezing orders based on the writ petitions' contentions and the specific circumstances of each case.

Issue 2: Benefit of Section 32A of the Insolvency and Bankruptcy Code, 2016 for a company under insolvency:

In a case related to M/s Alok Industries, the Petitioner argued that the company was under insolvency proceedings, with a new management taking over post the Corporate Insolvency Resolution Process. The Petitioner sought the benefit of Section 32A of the IBC for alleged offences predating the insolvency commencement. The ED, while having filed a reply affidavit, expressed readiness to review whether the Petitioner meets Section 32A pre-conditions. The ED committed to issuing fresh orders within three months based on the facts presented in the writ petition and any additional submissions by the Petitioner.

The court concluded all submissions from the parties' counsels in the mentioned matters. The arguments were heard, and the judgment was reserved. A specific direction was given for the case related to M/s Alok Industries to be listed on 30th November 2021 to receive a status report on appointments and vacancies at the Adjudicating Authority under the PMLA, treating it as a part-heard matter for that purpose.