2022 (1) TMI 13 - HC - Money Laundering

Money Laundering - Provisional Attachment order - approval of a Resolution Plan with an order approving liquidation under Section 33 when the plain language of Section 32A(2) of the IBC - HELD THAT - List on 24th January, 2022 for hearing.

Summary

Issues:
1. Interpretation of provisions of the Insolvency and Bankruptcy Code, 2016 regarding liquidation and resolution plan approval.
2. Transfer of attachment order from immovable assets to sale proceeds.
3. Impleadment of auction purchaser and secured creditors as respondents.
4. Decision on further payment by auction purchaser pending NCLT application.

Analysis:
1. The appeal challenges the judgment allowing the respondent to proceed with liquidation despite a Provisional Attachment order under the Prevention of Money Laundering Act. The Additional Solicitor General argues that the conditions for Section 32A application, as per the Supreme Court ruling in Manish Kumar v. Union of India, were not met. The Single Judge erred in equating resolution plan approval with liquidation order approval under Section 33, as Section 32A(2) of the IBC delineates distinct trigger events for assets under resolution versus liquidation.

2. During the proceedings, the Additional Solicitor General indicates willingness to transfer the attachment order to the sale proceeds for deposit by the auction purchaser. This proposal aims to address concerns regarding the attachment of assets worth ?274.60 crores. The court takes note of this proposal and issues a notice to the respondent, with their counsel accepting the notice.

3. The auction purchaser, Lucky Holdings Pvt. Ltd., and the secured creditors led by Edelweiss Asset Reconstruction Company Ltd. were parties before the Single Judge but not impleaded in the appeal. Upon the Additional Solicitor General's no objection, the court impleads them as respondents. The parties are directed to file an amended memo of parties within ten days to reflect this change.

4. Lucky Holdings Pvt. Ltd. expresses unwillingness to make further payments to the Official Liquidator pending the NCLT's decision on their application, scheduled for a hearing on 2nd February, 2022. Similarly, the secured creditors oppose shifting the attachment order from immovable assets to the auction purchaser's deposited money. The court schedules the next hearing for 24th January, 2022, directing parties to complete pleadings and file necessary documents. Until then, a status quo is ordered regarding the assets of PSL Limited, the company in liquidation.