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TMI Blog2020 (12) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... mar as IRP. It is submitted that the respondent vide order dated 08.05.2019 in an arbitrary manner has provisionally attached the property of the corporate debtor under section 5 (1) of PMLA and the said order was confirmed by the Adjudicating Authority vide order dated 24.10.2019. Copy of the said order passed by Adjudicating Authority is annexed to the application as Annexure D - CoIly. It is further submitted that the said order was confirmed without giving cognisance to the submission made by the petitioner. It is further submitted that the assets which had been attached was acquired much before the commission of the alleged offences and the same was mortgaged to the bank against the loan raised for development of the said property. The property was acquired by the corporate debtor vide registered conveyance deed No. 833/2005 on 07.02.2005 and copy of the same has been annexed to the application as Annexure C.D. in the title holder, the property was duly mortgaged with Bank of India by depositing the title deeds on 05.09.2008 in view of sanction letter dated 14.06.2008. 3. It is further submitted by the applicant that Bank of India had issued notice under section 13 (2) of SAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 238 prevail over other laws, the property so attached by PMLA is not sustainable. However, if at all there is any claim or due against the corporate debtor the respondent may place their claim before the RP. 7. On behalf of the Enforcement Directorate, Advocate, Mr. Bhagyodaya Mishra appeared and denied all the allegations and submitted that, PMLA is a separate proceeding and as such the code does not have any overriding effect over the PMLA proceedings. It is further submitted by the learned lawyer of the Enforcement Directorate that by virtue of Section 71, the PMLA has overriding effect over their existing laws in the matter of dealing with money laundering and proceeds of crime. 8. It is further submitted by the learned lawyer of the Respondent that the Hon'ble Delhi High Court has held that the Money Laundering Law, PMLA, prevails over the Bankruptcy and Insolvency Code, when it comes to attachment of properties obtained as proceeds of crime. 9. Gone through the record and various judgments, also heard both sides. There is no dispute with regard to the judgments so cited by both sides, however, each case has its own merit. 10. While going through the various judgments/ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration has to be made through an order by the Adjudicating Authority in this regard. If one carefully goes through the said section, there is no way professional attachment order passed under the provisions of the PML Act would automatically invite a moratorium. This provision only speaks about the consequence for institution of the suit, for continuance and other proceedings against the corporate debtor. Therefore, Section 14 of the IBC is consequent upon an order passed by the Adjudicative Authority declaring moratorium. This would not apply to a special enactment which travels on its own path. After all, one cannot presume a conflict between two enactments having its distinct roles with their objectives. As stated, it only speaks about the follow up action over a property, which is subject matter of the proceedings before the National Company Law Tribunal under the IBC. Thus, Section 14 would not bar a proceeding under the PML Act" "Para 9. Section 32A of the IBC deals with the liability for prior offences. This provision would get attracted in a case where the resolution plan has been approved by the Adjudicating Authority under Section 31 of the IBC. Therefore, when no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Government of Karnataka to refuse the benefit of deemed extension of lease, is in the public law domain and, hence, the correctness of the said decision can be called into question only in superior court which is vested with the power of judicial review over administrative action. The NCLT, being a creature of a special statute to discharge certain specific functions, cannot be elevated to the status of a superior court having the power of judicial review over administrative action. Judicial review, as observed by this court in Sub- Committee on Judicial Accountability v. Union of India f1991] 4 SCC 699, flows from the concept of a higher law, namely, the Constitution. Paragraph 61 of the said decision captures this position as follows: "But where, as in this country and unlike in England, there is a written Constitution which constitutes the fundamental and in the sense a "higher law" and acts as a limitation upon the Legislative and other organs of the state as grantees under the Constitution, the usual incidents of parliamentary sovereignty do not obtain and the concept is one of "limited Government". Judicial review is, indeed, an incident of and flows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial available to show the same to have been "derived or obtained" as a result of "Criminal activity relating to a scheduled offence" and consequently being "proceeds of crime ", within the mischief of PMLA..... (xii) An order of attachment under PMLA is not illegal only because a secured creditor has a prior secured interest (charge) in the property, within the meaning of the expressions used in RDBA and SARFAESI Act. Similarly, mere issuance of an order of attachment under PMLA does not ipso facto render illegal a prior charge or encumbrance of a secured creditor, the claim of the latter for release (or restoration) form PMLA attachment being dependent on its bonafides." "Thus, we have no hesitation in holding that the NCLT has got no jurisdiction to go into the matters governed under the PMLA." 13. Thus, ongoing through the above decision and view taken by the Hon'ble Madras High Court, as of now, it is clear that this Adjudicating Authority has no jurisdiction under section 60(5) and/or 32A(2) of the IB Code or under Rule 11 of the NCLT, to quash and/or set aside the order so passed by a Competent Authority of Enforcement Directorate (ED) under the PMLA. This Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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