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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 ..... MENT SUDHANSU JYOTI MUKHOPADHAYA, J. The Appellant- 'Resolution Professional' of 'Shree Bhawani Paper Mills Limited'- ('Corporate Debtor') has challenged the order dated 10th September, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench, Allahabad, whereby the Adjudicating Authority held that Regulatory Authorities are not covered under the 'Moratorium' as provided under Section 14 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short), relevant portion of which reads as follows: "It is to be clarified that Section 10 application was admitted on the application of the Corporate Applicant, i.e. Corporate Debtor, now he seeks exemption from statutory compliances as required by the Sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpose 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 Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Professional'. Sub-section (2) of Section 17 empowers the 'Interim Resolution Professional' to act in terms of the provisions therein including clause (e) of Section 17(2) which reads as follows: 17. Management of affairs of corporate debtor by interim resolution professional.-(1) From the date of appointment of the interim resolution professional,- (a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional; xxx xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 follows: "28A. Recovery of amounts.─ (1) If a person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any direction of the Board for refund of monies or fails to comply with a direction of disgorgement order issued under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate had become due, by the person to his spouse or minor child or son's wife or son's minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so far as the movable or immovable property or monies held in bank accounts so transferred to his minor child or his son's minor child is concerned, it shall, even after the date of attainment of majority by such minor 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein is in contravention of Section 14 of the 'I&B Code'. 18. Section 238 of the 'I&B Code' is overriding provision and reads as follows: "238. Provisions of this Code to override other laws.-The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 19. Section 28A of the 'SEBI Act, 1992' being inconsistent with Section 14 of the 'I&B Code', we hold that Section 14 of the 'I&B Code' will prevail over Section 28A of the 'SEBI Act, 1992' and 'Securities Exchange Board of India' cannot recover any amount including the penalty from the 'Corporate Debtor'. The 'Bombay Stock Exchange' fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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