9911796707
TMI Blog2020 (10) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... a [ 2019 (8) TMI 1038 - BOMBAY HIGH COURT ] has categorically held that NSEL is not a Financial Establishment and that all the attachments made under the MPID Act, 1999 on the premise that NSEL is a Financial Establishment would not subsist. Section 238 of the IB Code, 2016 provides for non-obstante clause to the effect that the 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 such law - The Hon ble Supreme Court in the case of Solidaire India Ltd. Vs. Fairgrowth Financial Services Pvt. Ltd. [ 2001 (2) TMI 968 - SUPREME COURT ] has held that where two statutes contain non-obstante clause, latest statute would prevail. Thus IB Code, 2016 being the later statute of the two, provisions of Section 238 of IB Code, 2016 would prevail over the provisions of MPID Act, 1999, insofar as it relates to enquiry on attachments which are civil in nature as per Section 7 of MPID Act, 1999 - Further, since the Hon ble High Court of Bombay has ruled that NSEL is not a Financial Establishment, the impugned notification of the Deputy Secretary to the Government of Maharashtra with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation utility or the depository of securities or any other registry that records the ownership of assets including the following :- a) Assets over which the corporate debtor has ownership rights which may be located in a foreign country; b) Assets that may or may not be in possession of the corporate debtor; c) Tangible assets, whether movable or immovable; d) Intangible assets including intellectual property; e) Securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; f) Assets subject to the determination of ownership by a court or authority; c. That as per section 20(1) of Insolvency and Bankruptcy Code 2016, the Interim Resolution Professional (IRP) shall make every endeavour to protect and preserve the value of the property of the corporate debtor and manage the operations of the corporate debtor as a going concern. d. That the attachments by various government agencies discussed above have been a big hindrance whilst performing the applicant's duties as an IRP of the Corporate Debtor, to keep it as a going concern and hence this application/petition for urgent interim measure of granting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 provided an electronic platform for trading of commodities and on 31.07.2013, the operations of R2 were suspended. However 24 of its members, including the Corporate Debtor herein, defaulted in pay-in obligations and were declared as 'Defaulters'. b. That on 30.09.2013, an FIR was registered with MRA police station and the same was transferred to the EOW, Mumbai under the provisions of the Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999 ('MPID Act'). c. That the attachment of properties was done under the provisions of the MPID Act by the state of Maharshtra. d. That NSEL has to recover ₹ 83,46,62,840/- from the Corporate Debtor. The aforesaid properties were attached to recover the genuine trading client's money to the tune of ₹ 83,46,62,840/-and the same was crystallized by the High Court appointed Committee headed by Justice (Retd) V. C. Daga. e. That the Applicant herein has appropriate remedies under the provisions of the MPID Act before MPID Court. f. That the Section 14 of the IB Code, 2016 does not apply to the Criminal proceedings and applies only to suits and civil proceedings and that rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider that the Corporate Debtor is declared a 'Financial Establishment' as per the provisions of MPID Act vide notification dated 31.03.2017. The said notification was not under challenge and the Bombay High Court has not passed any order with respect to this Notification and even the Corporate Debtor has not challenged the notification. As a result the notification stands and therefore the Corporate Debtor is a 'Financial Establishment' as per the MPID Act. n. Reiterating above, the Counsel for R2 prayed to dismiss the Application with costs. 6. Counsel for the Applicant filed written submissions inter-alia stating as under:- a. That the R1 turned out to be proforma party after impleading R4. b. That the Applicant did not seek any relief against R2 and he was only arrayed as party for substantial participation in proceedings. c. That the R4 being "Collector and District Magistrate, Mumbai City" could not appar before this Adjudicating Authority. However, R4 has submitted his reply to the counsel for the Applicant on 15.04.2019 & 04.07.2019, which are filed before this Adjudicating Authority vide memo. d. That the Hon'ble High Court of Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if it is not so within the meaning of Section 2(C) of the MPID Act, then NSEL cannot be charged and proceeded under the provisions of the MPID Act, 1999. viii. The Hon'ble High Court also opined that when the State Government of Maharashtra has itself alleged certain misdeeds to the NSEL only to a limited extent that the transaction between the NSEL and borrowers were not fully supported with actual delivery of goods which emerged into a financial mishap due to collusion between the NSEL, borrowers and their clients and this is a case of criminal conspiracy and criminal breach of trust, where the money of people is washed out. ix. That the Hon'ble High Court of Bombay vide order dated 22.08.2019, has quashed various impunged notifications issued by state of Maharashtra in exercise of provisions of MPID Act. x. That the Hon'ble High Court of Bombay in W.P No. 508/2017 has concluded that the NSEL is not a Financial Establishment within the purview of the MPID Act, 1999. xi. That the Hon'ble High Court of Bombay in W.P No. 1181/2018 has set aside and quashed the six impunged notifications passed by State of Maharashtra in exercise of provisions of Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the attachment that are effected by the competent authority under the MPID Act, 1999, the designated court would further enquire into claims/objections on such attachments and for that purpose, Section 7 of the MPID Act, 1999 provides the designated court all the powers as contained in Civil Procedure Code. 11. It is pertinent to note that the properties of the Corporate Debtor are attached under the provisions of the MPID Act for the alleged dues of ₹ 98.8 Crores, payable by the Corporate Debtor to NSEL on the premise that NSEL is Financial Establishment. However, Hon'ble High Court of Bombay in the matter of "63 Moons Technologies Limited vs. State of Maharashtra" has categorically held that NSEL is not a Financial Establishment and that all the attachments made under the MPID Act, 1999 on the premise that NSEL is a Financial Establishment would not subsist. 12. Section 238 of the IB Code, 2016 provides for non-obstante clause to the effect that the "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 such law". The Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
