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TMI Blog2022 (4) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Corporate Debtor the sum of Rs. 386 Crores, received by them in lieu of alienating the property owned by the Corporate Debtor. c. to pass any other order this Hon'ble Tribunal may deem fit and necessary and thus render justice. IA(IBC)/599(CHE)/2021: a. To staying the attachment order dated 01.11.2019 of the Respondent to enable the Applicant to carry out the Liquidation process of the Corporate Debtor; b. Pass such other orders And further orders, as this Hon'ble Tribunal may deem fit and appropriate and thus render justice. 2. The brief facts of these Applications are as follows: MA(IBC)/05(CHE)/2020 I. The Applicant is the Resolution Professional of the Corporate Debtor viz., M/s. Padmaadevi Sugars Ltd. (hereinafter the "Corporate Debtor") appointed vide Order dated 15.10.2018, passed in an Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter the "IBC"), filed by a Financial Creditor; Bank of India against the Corporate Debtor. The Corporate Debtor was engaged in the business of processing Sugarcane and producing processed sugar. In light of the above mentioned Order dated 15.10.2018 the immovable property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action is unsustainable as the entire transaction was wholly devised by the 2nd Respondent and that the provisional attachment order against the immovable property of the Corporate Debtor is bad in law and should be raised. V. It is averred by the Applicant that as the Corporate Insolvency Resolution Process (for brevity the "CIRP") was commenced on 15.10.2018 which was extended further for a period of 90 (ninety) days vide order dated 17.10.2019, the moratorium is still in existence under Section 14. It is further submitted that, failure to raise the order of provisional attachment would result in the Corporate Debtor going into Liquidation. 3. The Learned Counsel for the 1st Respondent herein viz., the Deputy Commissioner of Income Tax (Benami Prohibition) has filed a Memo on 22nd January, 2020. A brief of the submissions given in the Memo is as follows: A. That the provisional attachment of the property i.e., sugar factory with all land and machinery belonging to the Corporate Debtor vide attachment order dated 1.11.2019 was well founded and warranted based on the premise that the transaction is in the nature of benami transaction within the meaning of Section 2(9)(A) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame and brig a claim before NCLT taking advantage of Section 60(5)." C. Additionally, the 4st Respondent submits that the instant property value does not fall under the ambit of debt due or payable to the Government (Central or State) or local authority. The authority while exercising the power under the Prohibition of Benami Transactions Act, 1988 does not stand as a creditor. Moreover, where there are two special statutes, both having non obstante clauses, the courts have held that where an Act has a distinct purpose, such Act would have precedence. In this regard, the 1° Respondent places reliance on the judgment of the Hon'ble High Court of Delhi in the case Deputy Director, Directorate of Enforcement Vs. Axis Bank & Ors. [(2019) 259 DLT 500] wherein the following was held in para 17: "The Government, when it exercises its powers under PMLA to seek attachment leading to confiscation of proceeds of crime, does not stand as a creditor, the person alleged to be complicit in the offence of money-laundering similarly not acquiring the status of a debtor. "The objective of PMLA being distinct from the purpose of RDBA, SARFAESI Act and Insolvency code, the latter three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents including the written submissions, counters, memos and compilation of case laws submitted by the Applicant and Respondents. It is seen from the submissions and the documents that the 1st Respondent has only provisionally attached the said properties, which means that it is for a period of either until further orders or 90 days from the end of month from the date of the notice under Section 24(1) of the Prohibition of Benami Property Transaction Act, 1988; whichever is earlier. It can be seen that the Date of the order for attachment was 01.11.2019 and the date of filing the Application is 03.01.2020 which is only 63 days from the date of attachment order. The Applicant ought to have waited for the said period to expire or for further orders from the 156 Respondent post which, the procedure for revoking the attachment as stipulated under the Prohibition of Benami Property Transaction Act, 1988 should have been preferred. The Applicant had sought that as the Corporate Debtor is undergoing CIRP, the provisional attachment Order of the 1st Respondent be raised, failure of which would result in liquidation of the Corporate Debtor. However, as it can be seen that the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation process of the Corporate Debtor. The Corporate Debtor has been ordered for Liquidation vide Order of this Adjudicating Authority dated 20.04.2020. The period of moratorium starts with the initiation of the CIRP and ends in two circumstances: (a) on the commencement of Liquidation or (b) upon the approval of a resolution plan. In the present case, the Liquidation period has commenced now which means that the moratorium has ended. 5. Be that as it may, the provisional attachment made by the Respondents comes under the statute of Prohibition of Benami Property Transaction Act, 1988 which in itself has stipulated a due process with respect to attachment of property under Section 7 of the same. As the Insolvency and Bankruptcy Code, 2016 and the Prohibition of Benami Property Transaction Act, 1988 are two special Acts, the Applicant has alleged that the former should prevail over the latter as the IBC, 2016 was framed in 2016. The general principle for construction in a circumstance where two special Acts are in conflict with each other is that, the Act made later should prevail vide the maxim 'leges posteriores priores conterarias abrogant'. However, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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