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Siddhi Vinayak Logistic Ltd. Versus The Deputy Director Directorate of Enforcement, Mumbai

2017 (10) TMI 567 - ATPMLA

Insolvency and Bankruptcy procedure - provisional attachment order - maintainability of petition - Held that:- The provisional attachment order not be interfered with by this Tribunal as validity of the provisional attachment order is to be determined by the Adjudicating Authority, who has the competent jurisdiction to decide the issue. Accordingly the appeal is not maintainable before this Tribunal - We are of the view that the above submission of learned Mr. Pankaj Vijayan, IRP has a force .....

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ely before expiry of 180 days from the date of PAO. - MP-PMLA-3866/MUM/2017 & FPA-PMLA-1970/MUM/2017 - Dated:- 5-10-2017 - Justice Manmohan Singh Chairman And Shri Anand Kishore Member For the Appellant : Shri Amit Desai, Sr. Advocate Shri Diggant Kakkad, Advocate, Shri Narendra Prasad Yadav, Advocate & Shri Ankit Shah, Advocate For the Respondent : Shri Nitesh Rana, Advocate For the IRP : Shri Pankaj Vijayan, Advocate (IRP) ORDER FPA-PMLA-1970/MUM/2017 1. By this order we propose to decide .....

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ly admitted under Section 7(5) of the Code. 11. This Adjudicating Authority hereby appoint Shri Dushyant C. Dave, having address at 1101, Dalamal Tower, B Wing, Free Press Journal Marg, Nariman Point, Mumbai, and having Registration No. IBBI/IPA-003/IP-N00061/2017-18/10502 under Section 13(1) of the Code. 12. the Interim Insolvency Resolution Professional is hereby directed to cause public announcement of the initiation of Corporate Insolvency Resolution Process and call for submission of claims .....

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ee or order in any court of law, tribunal, arbitration panel or other authority. (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein. (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisatioin and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of .....

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e order till the completion of Corporate Insolvency Resolution Process subject to the Proviso under sub-Section(4) of Section 14. 14. The moratorium declared by this Adjudicating Authority is not applicable to the criminal proceedings, if any, initiated under the provisions of Prevention of Money Laundering Act, 2002 by the Enforcement Directorate and to the criminal case, if any, initiated by the Central Bureau of Investigation against the Respondent Company. 15. This Application stands dispose .....

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e fixed. However, we have been informed that despite our direction and knowledge about our order, the matter was heard by the Adjudicating Authority for some time as informed by the learned counsel for the parties, if that is so in our opinion, it is a serious matter. We direct that in future, the Adjudicating Authority should be very careful and must follow the directions issued by the higher authority. 4. Mr. Desai, learned senior counsel for the appellant has made various submissions and has .....

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Special Criminal Application No. 1725 of 2014 the Hon ble High Court of Gujarat has declared that the proceedings u/s 5, 8 and 17 of PML Act are civil in nature, the relevant paragraphs quoted herein after: 30. The main purpose of Section 5 appears to be provisional attachment of the properties where prosecution is intended. Conjoint reading of Section 5 and 8 clearly indicates their purpose being the prevention of money-laundering activity if such case is made out, by confiscating properties i .....

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cts undertaken under Section 5, 17 and 18 with which Adjudicating Authority or the Court is authorized to deal with can be confirmed by the Adjudicating Authority or by the Special Court on conclusion of the trial. 31. In light of the aforementioned scheme of several provisions of P.M.L. Act, the question as to whether the proceedings under Section 5, 8 and 17 are civil proceedings or criminal is required to be addressed. The argument is that unless a report or the complaint as contemplated unde .....

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e reports or complaint, etc., as contemplated in the first proviso to Section 5. In view of second proviso, proceedings can be initiated under Section 5 even in absence of compliance of first proviso. Various safeguards impose fetters upon the attaching officer obliging him to immediately send the order made by him and the factum of attachment of the property made by him within the prescribed period to the Adjudicating Authority to enable it to adjudicate upon such attachment. It is pertinent to .....

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e civil proceedings and adjudicate thereupon as rightly argued by the learned counsel for the respondents. 5. Learned senior counsel for the appellant further submits that since the proceeding pending under Section 5 and 8 are not in the nature of criminal proceeding, para 14 of the order passed by the Adjudicating Authority (NCLT) is not applicable in the said circumstances. 6. His second submission is that the Act Insolvency and Bankruptcy Code, 2016 is a Special Act which has an overriding ef .....

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f the Act on other laws.-(1) The provisions of this Act and of any rules or schemes made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 973) and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the Memorandum or Articles of Association of an industrial company or in any other instrument having effect by virtue of any / .....

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anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any Court, tribunal or other authority. 9. It is clear that both these Acts are special Acts. This Court has laid down in no uncertain terms that in such an event it is the later Act which must prevail. The decisions cited in the above context are as follows: Maharashtra Tubes Ltd. v. State Industrial &am .....

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to the conclusion that the Special Court Act being a later enactment would prevail. The headnote which brings out succinctly the ration of the said decision is as follows: Where there are two special statutes which contain non obstante clauses the later statute must prevail. This is because at the time of enactment of the later statute, the Legislature was aware of the earlier legislation and its non obstante clause. If the Legislature still confers the later enactment with a non obstante clause .....

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Provisions) Act, 1985. Had the Legislature wanted to exclude the provisions of the Sick Companies Act from the ambit of the said Act, the Legislature would have specifically so provided. The fact that the Legislature did not specifically so provide necessarily means that the Legislature intended that the provisions of the said Act were to prevail even over the provisions of the Sick Companies Act. Under Section 3 of the 1992 Act, all properly of notified persons is to stand attached. Under Sect .....

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hich have to be collected by the Special Court for the purposes of distribution under Section 11(2). The distribution can only take place provided the assets are first collected. The whole aim of these provisions is to ensure that monies which are siphoned off from hanks and financial institutions into private pockets are returned to the banks and financial institutions. The time and manner of distribution is to be decided by the Special Court only. Under Section 22 of the 1985 Act, recovery pro .....

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Section 11(2) of the 1992 Act to prevail over the provisions of any other law including those of the Sick Industrial Companies (Special Provisions) Act, 1985. It is a settled rule of interpretation that if one construction leads to a conflict, whereas on another construction, two Acts can he harmoniously constructed then the latter must be adopted. If an interpretation is given that the Sick Industrial Companies (Special Provisions) Act 1985, is to prevail then there would be a clear conflict. H .....

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me for reconstruction has to keep in mind the fact that it is to be paid off or directed by the Special Court. The Special Court can, if it is convinced, grant time or installments. There can, therefore, be no stay of any proceedings for recovery against a sick company so far as the Special Court under the 1992 Act is concerned." 11. We are in agreement with the aforesaid decision of the case, more so when we find that whenever the legislature wishes to do so it makes appropriate provisions .....

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ion) Act is not excluded. It is clear that in the instant case there was no intention of the legislature to permit the 1985 Act to apply, notwithstanding the fact that proceedings in respect of a company may be going on before the BIFR. The 1992 Act is to have an overriding effect notwithstanding any provision to the contrary in another Act. Similar view was taken by the Bombay High Court in the case of Bhoruka Steel Ltd. Vs. Fairgrowth Financial Services Ltd. The judgment rendered on 09.02.2016 .....

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ent with a nonobstante clause it means that the Legislature wanted that enactment to prevail. If the Legislature does not want the later enactment to prevail then it could and would provide in the later enactment that the provisions of the earlier enactment continue to apply. In the present case, the said Act is later. The said Act provides that its provisions are to prevail over any other Act. This would include the Sick Companies Act. If the legislature wanted to provide otherwise, they would .....

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