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2024 (4) TMI 828 - AT - Insolvency and BankruptcyRelease of assets (machines) seized by the Customs Authorities before initiation of CIRP - violation of principles of natural justice - HELD THAT:- On looking into the order of the Adjudicating Authority, it is clear that the order contains only direction to release the goods to the Customs Department without giving any reason and without even adverting to the facts, which were mentioned by the Applicant himself in the Application. The order of Adjudicating Authority, which does not give any reason for allowing the Application, deserves to be set aside on this ground alone. The statutory provision of Section 126 is clear and it does not need any interpretative exercise to know the legislative intendment. The option of paying the redemption fine given under the order dated 03.12.2020 has not been availed of, which is an admitted fact. The submission, which has been pressed by the learned Counsel for the Respondent is that since the period of 120 days did not expire and the CIRP commenced, the vesting of goods in Central Government shall not take place. Vesting of goods under Section 126, sub-section (1) is not dependent on exercise of option to pay the redemption fine. The payment of redemption fine and redeeming the goods is a benefit, which is provided by the statute, which option can be availed after the confiscation of the goods - In the present case, it is not the case of RP that any option was exercised for payment of redemption of fine. In the entire pleading of the Application, there is no claim of exercise of any option. Thus, the argument of Shri Rishav Banerjee that there shall be no vesting till the period for exercising the option comes to an end, has no relevance in the present case. More so, even CIRP commenced against the Corporate Debtor on 30.12.2020, it was always open for the RP, who was entitled to represent the Corporate Debtor to exercise option and redeem the goods by payment of redemption fine. The contention of the Respondent that even though, it has neither exercised the option of payment redemption fine nor redeemed the goods, but sill they continued to be owner of the goods cannot be accepted. The vesting of goods is on confiscation by the Central Government by provision of Section 126, sub-section (1) and the option to pay redemption fine and redeeming the goods, is only a benefit given to the Corporate Debtor, which however, shall not arrest the vesting of the goods as contemplated by Section 126, sub-section (1) - the submission of learned Counsel for the Respondent is not accepted in the present case that till the option for payment of redemption fine is not exercised within 120 days, the goods continued to vest in the Corporate Debtor. The order of the Adjudicating Authority impugned in the Appeal is unsustainable and deserve to be set-aside - Appeal allowed.
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