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TMI Blog2020 (10) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... e prayers now sought in the instant Application are as under:- a. Direct the Respondent No. 1 & 4 to release the attachment on the plant & machinery, factory building, moveable assets and Bank accounts belonging to the Corporate Debtor in the present Application. b. Pass such other further orders as this Adjudicating Authority may deem fit and proper in the facts and circumstances of the case. 4. Brief facts as stated by the Applicant are as under:- a. That the Interim Resolution professional was informed about the notice issued by the Economic Offence Wing, CB, CID Mumbai under section 4 and 5 of The Maharashtra Protection of Interest of Depositors (In financial establishments) Act 1999, for the attachment on plant and machinery, factory building and bank accounts by the Economic Offence Wing, CB, CID and about the notice issued by the Department of Central Excise for the attachment on moveable assets held by the company on 08.10.2018. b. That, as per section 18(1)(f) of Insolvency and Bankruptcy Code 2016 it is the duty of the interim resolution professional to take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Attachments by various investigative agencies directly come in the way of effective implementation of the Code, which is against the spirit, essence and objective the Code. It is already settled law as was held by the Honourable Supreme Court in case of M/s. Innoventive Industries Ltd. v. ICICI Bank, wherein it was observed that Section 238 of the Code unambiguously provides that the Code will apply, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. h. That in absence of access to the assets of the Corporate Debtor, the Applicant is unable to discharge his duties as per Section 17 to 20 of the IB Code, 2016, i. That R3 after receiving the notice dated 28.06.2019, contacted the Applicant/RP to bail them out from the instant proceedings and they are not necessary parties after realising the seized inventory. Therefore, the R3 turned out to be a proforma party after they have released the inventory and other moveable assets to the Resolution Professional on 25.02.2019. j. Reiterating above, the counsel for the Applicant prayed to allow the Application as prayed for. 5. Counsel for the R2 filed its counter and written submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts placed before us, we are satisfied that the NSEL has not accepted any deposit and if it has not accepted any deposit, then it would not fall within the definition of 'Financial establishment'. The NSEL has received money from the buyers at T+2 date and it was immediately paid to the sellers at T+2 date. However, on T+25 date, the patties who were sellers on T+2 date, and who were under obligation to make payment on T+25 date, failed to do so and it is not the NSEL but the sellers who receive the money from the buyers on T+2 date with an underlying obligation to make the payment of T+25 date but failed to do so and therefore, at the most, they could be referred to as 'financial establishment'....." k. Hence, prima facie as per the Hon'ble High Court judgment in Writ Petition No. 1181 of 2018, the Corporate Debtor is a Financial Establishment unde the provisions of the MPID Act. 1. That the Hon'ble Bombay High Court in Writ Petition No. 1181 of 2018 has quashed the impunged notification dated 21.09.2016 and the said notification relates to the petitioner in Writ Petitioner No. 1181 of 2018 and not the Corporate Debtor herein. m. That the Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of MPID Act were invoked on 24.10.2013. iv. The 63 Moons Technologies Limited was roped in being Holding Company as the NSEL did not had sufficient money or property to return the deposits or make payment of interest or render service against which the deposits were received in terms of Section 4 of the MPID Act, 1999 and the properties of the promoters/Petitioners were held liable for attachment. v. That 63 Moons Technologies Limited has filed Writ Petition (W.P No. 508/2017) against the State of Maharashtra challenging the constitutional validity of Section 4 & 5 of the MPID Act, 1999, being violative of Article 14, 19 and 300A of the Constitution of India. vi. That the second Writ Petition (W.P No. 1181/2018) against the State of Maharashtra challenging levy of attachment on the Petitioner/63 Moons Technologies Limited assets by Six Notifications issued by the State of Maharashtra by invoking the powers under MPID Act, the Writ Petition questioned the applicability of the provisions of MPID Act. vii. The Hon'ble Bombay High Court in W.P No. 1181/20118, took a view that the transaction entered on the platform of NSEL was not the one of deposit of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) Mumbai, appointed pursuant to Section 5 of MPID Act, 1999 and the properties of the Corporate Debtor, more fully described at page 17 of the Application have been attached under Section 4(1) & 5(1) of MPID Act, 1991 vide notification No. MIS.2014/CR541/Pol-11 of the Deputy Secretary to the Government of Maharashtra. It is contended by the RP that these properties belonging to the Corporate Debtor have been attached by R1 and R4 in view of which, it has made RP incapable of attracting worthwhile Resolution or even realizing reasonable value for the Assets, in the event of Liquidation. The RP further relied on Section 238 of the Code which contains the non-obstante clause. The RP has stated that, inspite of repeated notices, there was no representation in respect of R1 & R4, however, R4 in response to letters, stated that all the properties that are attached under the MPID Act, 1999 vest in the competent authority and cannot be disposed without prior orders of the designated court established under MPID Act, 1999. 9. The point for consideration is whether the relief sought in the instant Application can be granted or not? 10. A bare reading of the MPID Act, 1999, would show that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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