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2019 (4) TMI 2112 - Tri - Insolvency and BankruptcyDirection to de-attach the immovable property belonging to the corporate debtor - handing over original title deeds of the immovable properties to the Resolution Professional - HELD THAT - It is clear from the reading of the aforesaid observations of Hon'ble the Supreme Court in PR. COMMISSIONER OF INCOME TAX VERSUS MONNET ISPAT AND ENERGY LTD. 2018 (8) TMI 1775 - SC ORDER that the Insolvency Bankruptcy Code would override anything inconsistent contained in any other enactment including the Income Tax Act Section 238 is a non-obstante clause with widest amplitude. The Income Tax Department has already de-attached the properties belonging to the corporate debtor and accordingly, the possession by the Resolution Professional may be taken. It is directed that the title deed be handed over to the Resolution Professional at the earliest but not later than ten days. However, in respect of SEBI-respondent No. 1 the stand taken is that it is bound by the directions issued by the Securities Appellate Tribunal. The aforesaid stand is in the teeth of the observation of Hon'ble the Supreme Court in Monnet Ispat case (Supra). There is only one condition imposed by Hon'ble the Supreme Court that the code is to override anything inconsistent in any other enactment. It is obvious that various provisions in the Insolvency Bankruptcy Code would require the Resolution Professional to run the affairs of corporate debtor on day to day basis and to take possession of the property belonging to the corporate debtor. In view of the provisions of non-obstante clause of Section 238 of the Code, any right under any other law cannot come in the way of the Insolvency Bankruptcy Code. In the absence of records and possession of the property belonging to the corporate debtor, the Resolution Professional would not be able to perform his statutory duties in a time bound manner and there would be no possibility of any resolution which is the primary object of the Insolvency Bankruptcy Code as emphasised by the Hon'ble Supreme Court in various judgments including ARCELORMITTAL INDIA PRIVATE LIMITED VERSUS SATISH KUMAR GUPTA ORS. 2018 (10) TMI 312 - SUPREME COURT and M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK ANR. 2017 (9) TMI 58 - SUPREME COURT . SEBI is directed to de-attach the properties of the corporate debtor and hand over the possession to the Resolution Professional along with all its record so as to enable the Resolution Professional to conduct the CIR Process expeditiously in accordance with the time line given in the Code. Application allowed.
Issues: Application for direction to SEBI to de-attach immovable property of corporate debtor and hand over title deeds to Resolution Professional; Application for direction to Income Tax Department to de-attach immovable properties of corporate debtor and hand over title deeds to Resolution Professional.
Analysis: 1. The application before the National Company Law Tribunal sought directions for SEBI to de-attach immovable property of the corporate debtor and hand over the original title deeds to the Resolution Professional. The Tribunal noted that a petition under Section 7 against the corporate debtor was admitted, instituting a moratorium on legal proceedings against the debtor. SEBI had attached the assets of the corporate debtor based on orders by the Adjudicating Officer and Securities Appellate Tribunal (SAT), with SEBI claiming it must follow SAT's orders until modified or appealed to the Supreme Court. 2. The Income Tax Department had attached certain properties of the corporate debtor, but later de-attached them as per a revocation order. The Tribunal considered the argument based on a Supreme Court judgment that the Insolvency & Bankruptcy Code, with its non-obstante clause in Section 238, overrides other enactments like the Income Tax Act. This judgment emphasized that the Resolution Professional needed possession of the properties to fulfill statutory duties and achieve the primary objective of the Code, which is resolution of insolvency. 3. The Tribunal relied on the Supreme Court's position that the Code supersedes conflicting provisions of other laws, ensuring that the Resolution Professional can manage the debtor's affairs effectively. The Tribunal directed SEBI to de-attach the properties and hand over possession to the Resolution Professional promptly to facilitate the Corporate Insolvency Resolution Process (CIR Process) as per the Code's timeline, emphasizing the importance of allowing the Resolution Professional to carry out their duties without hindrance from other legal proceedings. 4. In conclusion, the Tribunal allowed the application, directing SEBI to de-attach the properties of the corporate debtor and transfer possession to the Resolution Professional along with all relevant records. This decision aimed to enable the Resolution Professional to conduct the CIR Process efficiently, in line with the Code's provisions and timelines, emphasizing the paramount objective of achieving resolution in insolvency cases. Judgment: - The Tribunal allowed the application, directing SEBI to de-attach properties of the corporate debtor and hand over possession to the Resolution Professional for effective management during the Corporate Insolvency Resolution Process.
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