9911796707
TMI Blog2025 (5) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... CLT directed that Shree Ganesh should be liquidated as per the provisions of the IBC. Furthermore, the writ petitioner was appointed as the liquidator by the NCLT. The writ petitioner in his capacity as an officer of the NCLT was duty bound to complete liquidation process of Shree Ganesh as per the provisions of the IBC and within the timelines which were presented under the IBC. While Section 14 of the IBC was applicable once CIRP was commenced in respect of any corporate debtor, Section 33(5) of the IBC was applicable once an order of liquidation had been passed by the NCLT. Section 33(5) stated as follows. "Subject to Section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor. Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority". In CIRP, what was contemplated was approval of a Resolution Plan. After liquidation order, the corporate debtor might be sold as a going concern or the assets might be sold. Therefore, once CIRP was admitted, the assets of a corporate debtor could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shree Ganesh, which was not confirmed and set by the Adjudicating Authority under the PMLA on 09.10.2019. The Respondent No.2 appealed against such decision. An order of status quo was passed in the said appeal proceedings on 20.09.2023. The writ petitioner was not concerned with the PMLA orders. They should dissolve upon sale in view of Section 32A of the IBC. On 30.11.2022, the writ petitioner was in receipt of an order of seizure no. 01/2022 ("Provisional Seizure Order"), which was issued by the respondent no. 2 under Section 37A of the Foreign Exchange Management Act, 1999 ("FEMA") in respect of the assets of Shree Ganesh, the company. The issuance of the Provisional Seizure Order was in complete disregard of the moratorium prescribed by Section 33(5) of the IBC. On 31.01.2023, the writ petitioner was in receipt of a petition u/s 37A(2) of FEMA seeking confirmation of the Provisional Seizure Order from the respondent no. 3 directing him to personally appear in the proceedings ("Notice"). The issuance of the Notice was in breach of the moratorium imposed by Section 33(5) of the IBC. Accordingly, the writ petitioner filed the instant writ petition challenging the Provisional S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Indirect Taxes and Customs reported at (2023) 1 SCC 472. The Hon'ble Supreme Court of India held that the provisions of the IBC would prevail over the Customs Act, 1962 due to Section 238 of IBC, iii) Duncans Industries Limited v. AJ Agrochem reported at (2019) 9 SCC 725. The Hon'ble Supreme Court of India held that Section 16G of Tea Act, 1953 was overridden by Section 238 of IBC, iv) Innovative Industries Limited v. ICICI Bank reported at (2018) 1 SCC 407. The Hon'ble Supreme Court of India held that non-obstante clause of IBC would prevail over the Maharashtra Relief Undertaking (Special Provisions) Act, 1958, v) Principal CIT v. Monet Ispat and Energy Limited reported at (2018) 18 SCC 786. The Hon'ble Supreme Court of India held that non- obstante clause of IBC would prevail over the Income Tax Act, 1961, vi) Assistant Director, Enforcement Directorate v. Raj Kumar Ralhan, Resolution Professional reported at 2019 SCC Online NCLT 30928. The National Company Tribunal, inter alia, held that (i) moratorium declared under Section 14 of IBC was applicable to proceedings under the FEMA, ii) the Enforcement Directorate could not proceed against the corporate debtor as long as morator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn, the Adjudicating Authority issued Show Cause Notice dated 06.07.2020 in terms of Rule 4(1) of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 and further fact of pendency of Appeal being No. FPA-PMLA-3332/KOL/2019 together with stay petition No. MP-PMLA-6636/KOL/2019 before the Ld. Appellate Tribunal against Order dated 09.10.2019 passed by the Adjudicating Authority under Section 8 of PMLA, 2002 in Original Complaint No. 1146 of 2019 thereby not confirming the attachment of properties of Accused/ Corporate Debtor under PMLA, 2002. On the contrary, in the writ petition, the petitioner mis-stated before this Court that the Central Government was trying to attach the same properties in circuitous way and the respondent no. 2 maliciously sought to do indirectly what he could not achieve directly in the PMLA proceeding. Annexure-P3 to writ petition was nothing but an intermediate action in order to protect the Interest of Revenue and the aggrieved person had always a right of appeal against the Order passed under Section 37A(3) of the FEMA, 1999 and from the Affidavit-in-Opposition of the respondents and Affidavit-in-Reply of the petitioner, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 i.e., much prior to such order of liquidation and hence, no bar u/s 33(5) of the IBC, 2016 was applicable in the present case. Annexure-P3 issued u/s 37A(1) of the FEMA, 1999 was an intermediate action in the said proceeding under the FEMA, 1999 against the Accused/Corporation Debtor. Section 32A(2) of the IBC, 2016, as referred to on behalf of the petitioner, did not also debar the action of the respondent no. 2 herein in issuing the Annexure-P3 herein. Section 32A(2) ibid was disjunctive in nature with respect to the approved resolution plan and sale of liquidation assets to a person by the word 'or'. With respect to sale of liquidation of assets to a person the provision, thus, provided that no action shall be taken against the property of the corporate debtor in relation to an offence committed prior to commencement of the corporate insolvency resolution process of the corporate debtor, where such property was covered under a sale of liquidation asset under the provisions of Chapter 3 of Part-II of the IBC to a person who was not a promoter or in the management or control of the corporate debtor or a related party of such person or had not abetted or conspired for the commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more. According to it, no action will be taken against property of the corporate debtor in relation to any offence committed prior to the commencement of the CIRP. 10. While the PMLA came into force in 2002, the IBC came into existence in 2016. In Ramsarup Industries Limited (supra) and Others, the Hon'ble Supreme Court held that the provisions of the IBC would override the provisions of the FEMA. Therefore, the moratorium under the IBC would override the provisions of the FEMA. Not only was the IBC enacted while the FEMA was in existence, but Section 238 of the IBC also clearly provided for a non-obstante clause. On the other hand, FEMA did not have such non- obstante clause. In this regard, reliance was placed on behalf of the petitioner on Paschimanchal Viduyt Vitran Nigam Ltd. (supra), Sundaresh Bhatt, Liquidator of ABG Shipyard (supra), Duncans Industries Limited (supra), Innovative Industries Limited (supra), Principal CIT vs. Monet Ispat and Energy Limited (supra) where the IBC was permitted to override the corresponding provisions of the Electricity Act, 2003, the Customs Act, 1962, the Tea Act, 1953, the Maharashtra Relief Undertaking (Special Provisions) Act, 1958 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
