9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 933 - AT - Insolvency and BankruptcyAttachment of Immovable property - attachment during the period when Moratorium under Section 14 of the Insolvency Bankruptcy Code, was in force - evasion of duty - benami transactions - HELD THAT - It must be borne in mind that in the act / transaction of Money Laundering, there is Washing the Money. In case of a Benami Transaction, to evade or avoid Tax or defrauding the Revenue, the Victim is the State and not the individual, which in Law is species of fraud - The onus of establishing that a particular sale is Benami and the apparent purchaser is not the real owner, rests upon the person asserting it to be so. The burden is to be strictly discharged by letting in evidence of a definite character, which will either directly prove the fact of Benami or establish circumstances, unerringly and reasonably and raising an inference of that fact, as per decision of the Hon ble Supreme Court in Jeydayal Poddar V Bibi Hazre 1973 (10) TMI 55 - SUPREME COURT . It comes to be known that the provisional Attachment dated 01.11.2019 was affirmed on 10.11.2021 by the Competent Authority, under Section 24 (3) of The Benami Transactions (Prohibition) Act, 1988. Also, it is crystalline clear that the Applicant / Appellant cannot embark upon a method to avoid / evade / supplant or circumvent the procedural hierarchy, as envisaged under the The Benami Transactions (Prohibition) Act, 1988, to be fulfilled by an aggrieved / affected person - the ingredients of Section 29 (A) of the The Benami Transactions (Prohibition) Act, 1988 (Amended 2016 by Act 43) deals with the aspect of Benami Transactions. This Tribunal on a careful consideration of divergent contentions, keeping in mind, the entire gamut of the facts and circumstances of the instant case in a conspectus and holistic fashion / manner comes to an inevitable, irresistible and inescapable conclusion that the Applicant in Law is not entitled to prefer an Application before the Adjudicating Authority. Suffice it for this Tribunal to pertinently observe that the said Miscellaneous Application is misconceived one, in the eye of Law, and the same is per se is not maintainable. Application dismissed.
Issues Involved:
1. Legality of the attachment of immovable property of the Corporate Debtor during the moratorium period under the Insolvency and Bankruptcy Code (IBC), 2016. 2. The interplay between the Insolvency and Bankruptcy Code, 2016, and The Benami Transactions (Prohibition) Act, 1988. 3. Whether the National Company Law Tribunal (NCLT) has the jurisdiction to entertain applications related to the attachment under The Benami Transactions (Prohibition) Act, 1988. Issue-Wise Detailed Analysis: 1. Legality of the Attachment of Immovable Property During Moratorium: The appellant contended that the attachment of the immovable property of the Corporate Debtor by the respondent was illegal as it was done during the moratorium period under Section 14 of the Insolvency & Bankruptcy Code, 2016. The appellant cited several Supreme Court judgments, including "Alchemist ARC Vs Hotel Gaudavan Private Limited (2018) 16 SCC 94" and "Anand Rao Korada Vs Varsha Fabrics - taxman.com 474 (2019)", to support the argument that such attachments are non-est in the eye of law during the moratorium period. The respondent countered that Section 14 of the IBC does not prohibit actions under The Benami Transactions (Prohibition) Act, 1988, and cited the judgment of the Hon'ble Madras High Court in Deputy Director, Office of the Joint Director, Directorate of Enforcement -Versus- Asset Reconstruction Company India Limited, which held that the moratorium under Section 14 of the IBC does not affect provisional attachment orders under the Prevention of Money Laundering Act, 2002. 2. Interplay Between IBC, 2016 and The Benami Transactions (Prohibition) Act, 1988: The appellant argued that the IBC, being a special enactment, overrides The Benami Transactions (Prohibition) Act, 1988, as per Section 238 of the IBC. The appellant also pointed out that the immovable properties attached by the respondent were mortgaged with financial creditors before the attachment order and thus should not be subject to the Benami Act. The respondent argued that the attachment under The Benami Transactions (Prohibition) Act, 1988, is valid and that the NCLT does not have jurisdiction to entertain applications challenging such attachments. The respondent cited the judgment in Kiran Shah-Versus-Enforcement Directorate, Kolkata, which held that the moratorium under the IBC does not hinder actions under the Prevention of Money Laundering Act, 2002. 3. Jurisdiction of NCLT to Entertain Applications Related to Attachment Under The Benami Transactions (Prohibition) Act, 1988: The tribunal observed that the attachment under The Benami Transactions (Prohibition) Act, 1988, can only be challenged under the said Act, which is a self-contained code. The tribunal noted that the appellant cannot seek a public law remedy under the Benami Act before the NCLT. The tribunal also noted that the provisional attachment dated 01.11.2019 was affirmed on 10.11.2021 by the competent authority under Section 24(3) of The Benami Transactions (Prohibition) Act, 1988. The tribunal concluded that the appellant cannot circumvent the procedural hierarchy established under the Benami Act by filing applications before the NCLT. Conclusion: The tribunal held that the applications filed by the appellant before the NCLT were not maintainable in law. The tribunal dismissed the appeal, stating that the appellant is not entitled to prefer applications under the IBC to challenge the attachment under The Benami Transactions (Prohibition) Act, 1988. The tribunal emphasized that the procedural wrangle under the Benami Act must be adhered to and followed by the aggrieved parties. In fine, the tribunal dismissed the instant Company Appeal (AT)(INS) No.292/2022 and closed the connected IA/612/2022 (for Stay). The applications MA(IBC)/05(CHE)/2020 and MA(IBC)/543(CHE)/2022 filed by the Resolution Professional and Liquidator of M/s. Padmaadevi Sugars Ltd. before the NCLT were also dismissed as not maintainable in law.
|
