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TMI Blog2020 (12) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... unity against prosecution of the corporate debtor and preventing action against the property of such corporate debtor undergoing CIRP or Liquidation. According to him the effect of attachment of the properties of the CD is to be nullified upon applying section 32A and de-attachment if any is to be asked for by the buyer and not by the liquidator. A reading of sub-section (2) of section 32A with the object behind the introduction we are of the considered opinion that section 32A is also applicable to liquidation proceedings. Under the object as well as under section it is specifically dealt with that the section is applicable to prevent insolvency in case the company goes into CIRP or liquidation. Coming to the objection that the ld. Counsel for the respondent submitted that proceedings are going on before the PMLA Appellate Authority which is attended by the Ld. Liquidator and the challenge against the attachment became final and therefore, even if the provisions of Code are amended, if the right of the parties had already been crystallized then, subsequent change in law would not take away such rights which had attained finality - It is true that the Liquidator who was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties having approached him. For the said reason he filed the application for an urgent hearing before the lockdown is lifted. As lockdown was declared due to pandemic COVID-19 situation, the normal operation of NCLT Kolkata Bench is yet to be resumed, the unnumbered application was listed on today for hearing through video conferencing (VC) by giving advance notice from the Registry to the applicant as well as to the respondent directing to submit written notes of defence, if any. 3. Heard both sides. Perused the records, written note of defence submitted on the side of the respondent and the citations referred to us on both sides. 4. Brief facts for the consideration of the application are the following: 5. Corporate Insolvency Resolution Process (in short; CIRP) was initiated by this Adjudicating Authority (AA) as against the Corporate Debtor (CD)/Varrsana Ispat Ltd., by an order dated 16-11-2017 (Annexure 'A'). For want of a resolution plan the CD was ordered to undergo Liquidation vide order dated 6-8-2019 (Annexure 'B'). While CIRP was initiated it was reported by the RP that CBI, BS FC has registered an FIR No. RCBD 1/2015/E0011, dated 26-10-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approached him. In the meanwhile on 28-12-2019 Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 was promulgated which was converted into the Insolvency and Bankruptcy Code (Amendment) Act, 2020 on 13-3-2020. After promulgation of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, section 32A has been inserted to the Code by giving much clarity in regards the assets under attachment and accordingly he filed this Application under newly inserted Section 32A of the I B Code' seeking permission to sell the assets of the CD which were attached by the respondent/ED. 8. The respondent/ED appeared through its Counsel Mr. Zoheb Hossain, and Mr. Agni Sen. A written notes of defence also submitted. The Ld. Counsel Mr. Zoheb Hossain objected to this application mainly on three grounds. Firstly he submitted that only after the liquidation process is over or resolution plan is approved then alone an application u/s. 32A can be made. Secondly he submitted that no Application can be filed by the liquidator u/s. 32A and according to him such an application can be filed only by the successful resolution applicant Thirdly he submitted that proceedings are going on before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter where a resolution plan is passed. The facts in the said case is entirely different in the instant case. Here in this case the CD is undergoing liquidation and the Liquidator seek permission to sell the assets already under order of attachment by the respondent in view of the application of amended provision of the Code. Considering the first objection our endeavour is to see whether section 32A is not applicable to the sale of assets of the CD which is under order of attachment and the proceedings of the respondent is under challenge and pending before the Appellate Authority, PMLA against confirmation of Provisional Attachment order, of the Adjudicating Authority, PMLA. What is prayed for in the case at hand is not for releasing the attachment. According to the Ld. Liquidator, de-attachment is not at all necessary because section 32A provide immunity against prosecution of the corporate debtor and preventing action against the property of such corporate debtor undergoing CIRP or Liquidation. According to him the effect of attachment of the properties of the CD is to be nullified upon applying section 32A and de-attachment if any is to be asked for by the buyer and not by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the commencement of the corporate insolvency resolution process of the corporate debtor, where such property is covered under a resolution plan approved by the Adjudicating Authority under section 31, which results in the change in control of the corporate debtor to a person, or sale of liquidation assets under the provisions of Chapter III of Part II of this Code to a person, who was not- (i) A promoter or in the management or control of the corporate debtor or a related party of such a person; or (ii) A person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court. Explanation.-For the purposes of this sub-section, it is hereby clarified that,- (i) an action against the property of the corporate debtor in relation to an offence shall include the attachment, seizure, retention or confiscation of such property under such law as may be applicable to the corporate debtor; (ii) nothing in this sub-section shall be constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Code to a person, who was not- . The above said discussion no doubt enables us to hold that the section 32A is also applicable to the assets of the CD undergoing liquidation and a liquidator can file an application like the one in hand. That being so we do not find any merit in the first and second objections on the side of the respondent. 13. Coming to the third objection, the ld. Counsel for the respondent submitted that proceedings are going on before the PMLA Appellate Authority which is attended by the Ld. Liquidator and the challenge against the attachment became final and therefore, even if the provisions of Code are amended, if the right of the parties had already been crystallized then, subsequent change in law would not take away such rights which had attained finality. To stress his said argument he relied upon a judgment of the Hon'ble Supreme Court in Lekh Raj v. Ranjit Singh [2018] 12 SCC 750. 14. It is true that the Liquidator who was the then RP preferred an application for de-attachment of the assets of the CD issued by the respondent on the ground of violation of moratorium declared under section 14 of the Code. The CA(IB) No. 399/KB/2018, which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor and therefore he can proceeds with the sale of the property under attachment and upon confirmation of the sale the buyer can seek appropriate relief for de-attachment in accordance with section 32A. 16. Having gone through the judgments cited by the Ld. Counsel for the respondents and upon hearing on both sides at length what we understood is that section 32A prohibits any action to be taken by the respondent as against properties of the CD undergoing CIRP or undergoing liquidation. But it would not have any application to the designated partner or an officer who is in default or was in any manner in-charge of or responsible to CD for conduct of its business or associated in any manner who was directly or indirectly involved in commission of such offence. To sum up the properties of a CD under liquidation is also to be exempted from the purview of the commission of such offence. In view of the above said position of law we are of the considered opinion that a liquidator can proceed with the sale of the assets even if it is under attachment by the respondent, to continue the time bound process of liquidation under the provisions of the Code and upon completion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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