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TMI Blog2019 (4) TMI 1724X X X X Extracts X X X X X X X X Extracts X X X X ..... of India cannot recover any amount including the penalty from the Corporate Debtor . The Bombay Stock Exchange for the same very reason cannot take any coercive steps against the Corporate Debtor nor can threaten the Corporate Debtor for suspension of trading of shares. In view of Section 18 of the I B Code , the Interim Resolution Professional while taking control and custody of any asset including the tangible and intangible assets, cannot sell the shares of the Corporate Debtor during the period of Moratorium except in accordance with the provisions of the I B Code and with the approval of the Committee of Creditors . Therefore, dealing with the shares of the Corporate Debtor by the Bombay Stock Exchange during the period of Moratorium normally does not arise. The shares can be transferred only in the manner prescribed under the I B Code and following requirements framed under the SEBI Act, 1992 and the Companies Act, 2013 . Appeal disposed off. - Company Appeal (AT) (Insolvency) No. 734 of 2018 - - - Dated:- 23-4-2019 - Mr S.J. Mukhopadhaya, Chairperson, Mr A.I.S. Cheema, Member (Judicial) And Mr Kanthi Narahari, Member (Technical) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock Exchange threatened suspension of trading shares of the Corporate Debtor , which is against the provision of Section 14 of the I B Code . According to him, the Respondent- Bombay Stock Exchange has no jurisdiction to suspend trading shares nor can impose penalty in view of clear prohibition under Section 14 of the I B Code . 4. Reliance has been placed on Section 238 of the I B Code to suggest that the I B Code will have an overriding effect upon provisions of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 . 5. Reliance has also been placed on the decision of the Hon ble Supreme Court in Innoventive Industries Limited vs. ICICI Bank and Another─ (2018) 1 SCC 407 wherein the Hon ble Supreme Court held that any proceeding under any law against the Corporate Debtor cannot be proceeded once Moratorium is in effect. 6. Learned counsel appearing on behalf of the Respondents- Securities Exchange Board of India and Bombay Stock Exchange referring to Section 14 and Section 17 (2) (e) of the I B Code submitted that Section 14 is not applicable nor t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for complying with the requirements under any law for the time being in force on behalf of the corporate debtor. 12. From the aforesaid provisions, it is clear that the Interim Resolution Professional is responsible for complying with the requirements under any law for the time being in force on behalf of the Corporate Debtor , which includes the SEBI Act, 1992 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 framed therein. 13. The question arises for consideration is whether on failure to perform the duties, if any, penal order is passed for penalty imposed on the Corporate Debtor or any recovery can be made in terms of Section 28A of the SEBI Act, 1992 . 14. According to learned counsel for Securities Exchange Board of India and the Bombay Stock Exchange , Section 28A of the SEBI Act, 1992 will have overriding effect on the provisions of Section 14 of the I B Code . However, such submission cannot be accepted for the reasons as mentioned and discussed below. 15. Section 28A of SEBI Act, 1992 relates to recovery of amounts and reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor child or son's minor child, as the case may be, continue to be included in the person's movable or immovable property or monies held in bank accounts for recovering any amount due from the person under this Act. Explanation 2.- Any reference under the provisions of the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962 to the assessee shall be construed as a reference to the person specified in the certificate. Explanation 3.- Any reference to appeal in Chapter XVIID and the Second Schedule to the Income-tax Act, 1961, shall be construed as a reference to appeal before the Securities Appellate Tribunal under section 15T of this Act. ( 2) The Recovery Officer shall be empowered to seek the assistance of the local district administration while exercising the powers under sub-section (1). ( 3) Notwithstanding anything contained in any other law for the time being in force, the recovery of amounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any direction issued by the Board under section 11B, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moratorium normally does not arise. The shares can be transferred only in the manner prescribed under the I B Code and following requirements framed under the SEBI Act, 1992 and the Companies Act, 2013 . 21. At this stage, we may mention that in the case of Pr. Director General of Income Tax (Admn. TPS) vs. M/s. Synergies Dooray Automotive Ltd. Ors. etc.─ Company Appeal (AT) (Insolvency) No. 205 of 2017 etc. , this Appellate Tribunal held that the statutory dues i.e. the dues to Central Government or the State Government arising under any law for the time being in force and payable come within the meaning of Operational Debt . If penalty is imposed or amount is payable to the Securities Exchange Board of India in such case, it may claim as an Operational Creditor but cannot recover the same during the Resolution Process . The impugned order dated 10th September, 2018 stands modified and clarified to the extent above. The appeal stands disposed of with aforesaid observations and directions. However, in the facts and circumstances of the case, there shall be no order as to costs. - - TaxTMI - TMITax - Insolvency ..... X X X X Extracts X X X X X X X X Extracts X X X X
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