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TMI Blog2024 (8) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 2. Brief facts necessary to be noticed for deciding the Appeal are: (i) The Corporate Insolvency Resolution Process ("CIRP") commenced against the Corporate Debtor - Alchemist Infra Realty Limited by order dated 08.10.2021. In the CIRP, the Appellant submitted a Resolution Plan. (ii) The RP after conducting due diligence regarding compliance of Resolution Plan with regard to the provisions of Section 29A, shared the Plan with the Committee of Creditors ("CoC"). The CoC on 18.10.2023, approved the Resolution Plan of the Appellant with 100% vote share. The Letter of Intent was issued on 20.10.2023 to the Appellant. The RP filed an IA No.01/2024 seeking approval of the Resolution Plan. (iii) The Resolution Plan submitted by the Appellant proposed for vacation of charges by the Directorate of Enforcement ("ED") and other Authorities. The Resolution Applicant has prayed in the Resolution Plan that on approval of the Resolution Plan, all the charges/ attachments shall stand vacated by the respective Government Authorities, so that Resolution Applicant/ Corporate Debtor can monetize the assets by selling/ developing/ getting registry for implementation of the Resolution Plan. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protection of Section 32-A of me to uplift the attachment by Enforcement Directorate over the properties; and b. Pass an order for release of properties and accounts seized and attached by Central and State Agencies including Enforcement Directorate, Income Tax, Himachal Pradesh Government/ Authorities etc. to uphold the legislative scheme of Section 32-A of IBC; c. Pass any such further or other order(s) as this Hon'ble Appellate Tribunal may deem fit and proper in the facts and circumstances of the case to grant justice to the Appellants." 4. We have heard Shri Arun Kathpalia, learned Senior Counsel appearing for the Appellant and Shri Krishnendu Datta, learned Senior Counsel appearing for the Resolution Professional/ Respondent. 5. Learned Senior Counsel for the Appellant challenging the order of Adjudicating Authority submits that Adjudicating Authority committed error in not correctly appreciating the ambit and scope of Section 32-A of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "IBC"). It is submitted that purpose and intent of Section 32-A is to clearly grant protection to the Resolution Applicant from any liability of the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce (SFIO). Thus, vacation of charges by the abovementioned authorities are necessary for the successfully implementation of Resolution Plan as there is no business operation in the Corporate Debtor other than certain land banks and without monetisation of these assets, Corporate Debtor cannot be revived. Therefore, the Resolution Applicant has prayed in the Resolution Plan that on approval of the Resolution Plan by this Tribunal, all the above charges/ attachments shall stand vacated by the respective government authority so that the resolution Applicant/ Corporate Debtor can monetize the assets by selling/ developing/ getting registry from tehsildar / patwari / registrar for implementation of the Resolution Plan." 9. The judgment of the Bombay High Court in Shiv Charan and Ors. vs. Adjudicating Authority under the Prevention of Money Laundering Act, 2002 and Anr. - Writ Petition (L) No.9943 of 2023 was relied by the Appellant in support of the submission, which has also been noticed by the Adjudicating Authority in paragraph 38 of the judgment. Paragraph 38 of the impugned order is as follows: "38. The Ld. Counsel for the Applicant relied upon the judgment of Hon'ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, relied by the Appellant, refused the prayer of the Appellant of uplifting the attachment, relying on the judgment of the Delhi High Court in Rajiv Chakraborty vs. Directorate of Enforcement - (2022) SCC OnLine Del 3703, where the Delhi High Court has ruled that power to attach under the PMLA would not fall within the ken of Section 14(1)(a) of the IBC, 2016. The Adjudicating Authority in the impugned order has noted and extracted the relevant paragraphs of the judgment of the Delhi High Court. The Adjudicating Authority also noted that in the Rajiv Chakraborty's case, the Delhi High Court has specifically ruled that the statutory injunct against the invocation or utilization of the powers available under the PMLA would come into effect only once the trigger event envisaged under Section 32-A comes into effect. The above has been observed by the Adjudicating Authority in paragraph 44 of the judgment, which is as follows: "44. The Regulation 37 of IBBI (CIRP) Regulations, 2016 specifically provided that a Resolution Plan shall provide for the measures as may be necessary for insolvency resolution of the corporate debtor. The measure provided in the Regulation also includes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and acknowledge the requirement of the judicial proceedings/ investigations be noted by the SRA and the measures in that regard be provided in the Resolution Plan under the head contingencies or otherwise. The Regulation 38(2)(d) specifically require the mention of the provisions for the manner in which proceedings in respect of avoidance transactions, if any will be pursued after the approval of the Resolution Plan. Thus, apparently the scheme of the IBC does not stipulate that the SRA would be completely immune from all sort of shackles qua the judicial process. Nevertheless, in the case of Rajiv Chakraborty, Hon'ble High Court has provided that the RP can always approach the Authorities to release the attached properties of CD and the third parties like secured creditor, etc. would have prior claim over the attached properties, over the PMLA process. But such proposition apply only to such third party claimants, whose right accrue prior to commencement of the criminal proceedings. It would be dangerous to evolve any such propositions, which may envisage that the properties covered under Sec. 3 of the Prevention of Money Laundering Act, 2002, attached in terms of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at power to attach under PMLA would not fall within the ken of Section 14(1)(a). Whereas in the same judgment, Section 32A has been noticed and in paragraph 115, the Delhi High Court has laid down following: "115. The Court has independently come to the conclusion that the power to attach under the PMLA would not fall within the ken of Section 14(1)(a) of the IBC. Through Section 32A, the Legislature has authoritatively spoken of the terminal point whereafter the powers under the PMLA would not be exercisable. The events which trigger its application when reached would lead to the erection of an impregnable wall which cannot be breached by invocation of the provisions of the PMLA. The non obstante clause finding place in the IBC thus can neither be interpreted nor countenanced to have an impact far greater than that envisaged in Section 32A. The aforesaid issue stands answered accordingly." 16. Through, Section 32-A, the legislature have authoritatively spoken of the terminal point whereafter the powers under the PMLA would not be exercisable. The events which trigger its application when reached would lead to erection of an impregnable wall, which cannot be breached by invocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved resolution plan, must be released, if the jurisdictional facts for purposes of Section 32A exist. x x x 53. In the result, we rule that the attachment by the ED over the Attached Properties, being the four bank accounts of the Corporate Debtor, (with aggregate balances to the tune of Rs. 3,55,298/- and any interest earned thereon) and the 14 flats constructed by the Corporate Debtor valued at Rs. 32,47,55,298/-, came to an end on 17th February, 2023. Such release has occurred by operation of Section 32A of the IBC, 2016, and the ministerial act of communicating must be communicated by the Respondents in WP 9943 and the Petitioner in WP 29111 forthwith to the Corporate Debtor, marking a copy to the Petitioner in WP 9943, within a period of six weeks from the date of this judgment. Such a communication is necessary to enable the Attached Properties to be bankable assets that can be deployed into the revival of the Corporate Debtor in terms of the objective of resolution." 51. In the case before Hon'ble Bombay High Court, when this Tribunal had ordered release of the property attached by ED, upon approval of Plan, Hon'ble High Court viewed that this Tribunal was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed: "One must not, of course, construe even a reserved judgment of Russell, L.J. as if it were an Act of Parliament." And, in British Railways Board v. Herrington [(1972) 1 AC 877: (1972) 2 WLR 537: (1972) 1 All ER 749 (HL)j Lord Morris said: (All ER p. 761c) "There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case." 13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 14. The following words of Hidayatullah, J. in the matter of applying precedents have become locus classicus : (Abdul Kayoom v. CIT [AIR ~ 962 SC 680], AIR p. 688, para 19) "19. . .. Each case depends on its own facts and a close similarity between one case and another is not enough because even a single _significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst proceeding against the property of the corporate debtor in relation to an offence committed before the commencement of the CIRP, are as follows: 320.1. There must be resolution plan, which is approved by the adjudicating authority under Section 31 of the Code. 320.2. The approved resolution plan must result in the change in control of the corporate debtor to a person, who was not - (a) a promoter; (b) in the management or control of the corporate debtor; or (c) a related party of the corporate debtor; (d) a person with regard to whom the investigating authority, had, on the basis of the material, reason to believe that he has abetted or conspired for the commission of the offence and has submitted a report or a complaint. If all these aforesaid conditions are fulfilled then the law giver has provided that no action can be taken against the property of the corporate debtor in connection with the offence." 19. The Hon'ble Supreme Court also noticed the explanation to sub-section (2) of Section 32 and made following observations in paragraphs 321 and 322: "321. The Explanation to sub-section (2) of Section 32-A has clarified that the words "an action against the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en engrafted in the legislation, which is a legislative scheme and if legislature thought that immunity be granted to the Corporate Debtor or its property, it hardly furnishes a ground for this Court to interfere. In paragraph 326, it has been emphasized that the extinguishment of the criminal liability of the Corporate Debtor is apparently important to the new management to make a clean break with the past and start on a clean slate. In paragraph 326, following has been observed: "326. We are of the clear view that no case whatsoever is made out to seek invalidation of Section 32-A. The boundaries of this Court's jurisdiction are clear. The wisdom of the legislation is not open to judicial review. Having regard to the object of the Code, the experience of the working of the Code, the interests of all stakeholders including most importantly the imperative need to attract resolution applicants who would not shy away from offering reasonable and fair value as part of the resolution plan if the legislature thought that immunity be granted to the corporate debtor as also its property, it hardly furnishes a ground for this Court to interfere. The provision is carefully thought out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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