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TMI Blog2025 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... CLT, Mumbai - violation of principles of natural justice. Violation of principles of natural justice - HELD THAT:- The order dated 27.09.2023 was passed by the High Court of Bombay after hearing and in presence of the counsel for ED but no such argument, which was raised herein as referred in the stay order dated 06.07.2023 was made by the counsel for ED, rather even after dismissal of the writ petition with aforesaid observations, the order dated 27.09.2023 was not put to challenge by the ED in any manner. It is not worthy that the SLPs preferred against the judgment and order dated 27.09.2023 have also been dismissed by the Hon'ble Supreme Court in NARESH SUNDARLAL JAIN VERSUS UDAIPUR ENTERTAINMENT WORLD PRIVATE LIMITED ANR. [ 2023 (10) TMI 1478 - SC ORDER] . Further, a perusal of stay order dated 06.07.2023 also reveals that counsel for petitioner strongly raised another point that the petitioner was not impleaded as party in the CIRP before the NCLT, Mumbai and the order dated 24.02.2022 has been passed by the NCLT, Mumbai behind back of the petitioner, which suffers from blatant violation of the principles of natural justice. In respect of such plea of petitioner, for viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f to give any findings on such legal issue, at this stage, which may affect merits of the writ petition. However, such legal issue shall be considered and decided whenever the occasion comes to hear the writ petition on merits. Similar is in respect of all other contentions, made by the respective counsels for parties, which also touch to the maintainability and merits of the writ petition, hence, same shall be considered at the time of final hearing of the writ petition. Conclusion - i) The petitioner cannot take resort of the violation of principles of natural justice and cannot plead unawareness to the proceedings before the NCLT, Mumbai and the order dated 24.02.2022 passed therein - ii) The stay order was vacated, and the court directed the petitioner to address the jurisdictional issue and consider converting the writ petition under Article 226 of the Constitution. In the opinion of this Court, stay order dated 06.07.2023 is liable to be vacated and hence, as a final conclusion, the stay order is hereby vacated. The application filed by the respondents under Article 226(3) of the Constitution of India stands allowed and consequentially the stay application of petitioner is he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r- Corporate Debtor before the NCLT, Mumbai and the NCLT, while granting approval of the resolution plan under Section 31 of the IB Code, 2016, vide its final order dated 24.02.2022 has also vacated the attachment order of the subject property in exercise of powers under Section 238 of the IB Code. NLCT held in para No.43 of the order that since properties attached vide the order of ED and PMLA are part of the properties under the Resolution Plan, therefore, this bench is empowered to deal with the properties under Section 238 of the IB Code and accordingly in exercise of powers under Section 238 of the IB Code read with Rule 11 of the NCLT Rules, order of attachment of property has been vacated, hence, the petitioner has preferred the instant writ petition, challenging the order of NCLT, Mumbai. 4. This Court, while issuing notices for admission of the writ petition, to the respondents vide order dated 06.07.2023, passed an ex-parte stay order in the following terms:- Meanwhile, operation of the order dated 24.02.2022 passed by the National Company Law Tribunal Mumbai Bench (Annexure-1) and all further proceedings in pursuance to the said order shall remain stayed. 5. Respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, Mumbai after following the process of law has approved the Resolution Plan during CIRP under Section 31 of the IB Code, 2016 vide order dated 24.02.2022. Such order, which has been passed by the NCLT, Mumbai, as adjudicating authority under Section 31 of the IB Code, can be subjected to appeal before the National Company Law Appellate Tribunal at New Delhi under Section 32 read with Section 61 of the IB Code, 2016, for which, limitation of 30 days is provided, which can be extended upto 15 days only but not beyond that. Learned counsel submits that the petitioner was well aware about the pending proceedings before the NCLT, Mumbai and passing of order dated 24.02.2022, therefore, he could have challenged the same by way of filing statutory appeal thereagainst within the prescribed period of limitation before the National Company Law Appellate Tribunal, New Delhi, but petitioner did not opt to avail such statutory remedy under IB Code, rather after expirty of period of limitaion and having lost the opportunity to file the appeal, has sought to challenge the order of NCLT dated 24.02.2022 by filing the instant writ petition on 10.03.2023 before the High Court, which is not only de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttachment order dated 19.09.2019 passed under PMLA and ED was also made party respondent No.2. Later on, that writ petition was withdrawn on 27.07.2020 with liberty to approach before the NCLT, Mumbai to initiate proceedings under the IB Code. ED was well aware of such order, since the order dated 27.07.2020, allowing withdrawal of the writ petition and granting liberty to approach before the NCLT, Mumbai, was passed after hearing the counsel for ED and it was also observed by the Division Bench of the High Court that the respondents are at liberty to seek intervention in the matter, if they are not made party in the proceedings before the NCLT, Mumbai. It has further been pleaded by the respondents that the resolution professional too sent various communications through written letters and e-mails to the ED on 22.06.2021, 25.06.2021, 09.06.2022, 17.08.2022, 03.09.2022 and 10.09.2022. Such communication sent by the resolution professional to ED have not been denied by the petitioner, rather counsel for petitioner, during course of arguments does not dispute to receive few of letters from resolution professional. It has been apprised that one letter and e-mail dated 22.06.2021 was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IB Code, the attachment by the ED for offences prior to commencement of the CIRP stands automatically vacated and the properties of the Corporate Debtor become immune from any action. In this regard, learned counsel has relied upon the judgment of Hon ble Supreme Court delivered in case of Manish Kumar Vs. Union of India [(2021) 5 SCC 1] wherein the Union of India itself took a stand that Section 32-A of the IB Code provides immunity to the Corporate Debtor and its properties, when there is an approval of the Resolution Plan resulting in the change of management of the control of Corporate Debtor. Learned counsel submits that since the insolvency proceedings commenced w.e.f. 16.04.2021, the orders of provisinal attachment and final attachment dated 02.04.2019 and 19.09.2019 were issued prior thereto, hence, attachment orders stand automatically vacated, since the management of respondent No.1-Company had been taken over by the JVD Live Space w.e.f. 28/29 July, 2021. Thus, the prayer of counsel for petitioner is that on merits as well there is no prima facie case of petitioner for continuing the stay order on account of afore-stated reason and in view of the subsequent facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the corporate debtor has to exercise a right that falls outside the purview of the IBC, 2016 especially in the realm of the public law, they cannot through the resolution professional, take a bypass and go before NCLT for the enforcement of such a right. In addition, counsel for petitioner has also relied upon the judgment of Madras High Court dated 02.06.2020 delivered by the Division Bench in Writ Petition No.29970/2019 and other connected writ petitions in case of Deputy Director Vs. Asset Re-Construction Company (India) Limited, in support of maintainability of the writ petition. 19. In respect of the order dated 27.09.2023 which was passed by the High Court of Bombay in presence of counsel for ED in CWP No.11982/2023, counsel for petitioner submits that it is true that the ED was party as respondent No.2 in the writ petition and the counsel for ED had also put in appearance but due to having lack of updated instructions, he was not aware about the stay order dated 06.07.2023 passed by the Rajasthan High Court in the present writ petition and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his context, it is note worthy that after passing the stay order dated 06.07.2023, undisputedly a Writ Petition No.11982/2023 (titled Naresh Sundarlal Jain Vs. M/s Udaipur Entertainment World Pvt. Ltd. and Anr.) was filed before the High Court of Bombay wherein petitioner was also made party respondent No.2. In that writ petition, the same order dated 24.02.2022 passed by the NCLT, Mumbai was challenged, which is under challenge in the present writ petition. The High Court of Bombay has dismissed the writ petition vide order dated 27.09.2023 and while dismissing the writ petition, in respect of pending proceedings of appeal before the PMLA Appellate Authority, filed by respondent No.1 challenging the order of attachment passed by the ED and in respect of stay order passed in the appeal, the High Court of Bombay in para No.17 made following observations:- 17. At this stage, the learned counsel for Respondent No.1 submits that now even the Appeal pending before the PMLA Appellate Authority questioning the order of attachment of properties of Respondent No.1 has been rendered infructuous in view of the order passed by the NCLT, Mumbai which has attained finality. Although, there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the D.B. CWP No.18091/2019 and getting liberty to approach NCLT, Mumbai, vide order dated 27.07.2020, which was passed by the Division Bench of the High Court of Rajasthan at Principal Seat Jodhpur, in presence of and after hearing of the counsel for petitioner-ED. Secondly, liberty was given by the Division Bench to the respondents as well to intervene in the matter, if they are not made party in proceedings before the NCLT, Mumbai. Thirdly, even during pendency of such proceedings, resolution professional sent various communications dated 22.06.2021, 25.06.2021, 09.06.2022, 17.08.2022, 03.09.2022 and 10.09.2022 before and after passing the order dated 24.02.2022. Such communications sent by the resolution professional to ED have not been denied by the petitioner and most important thing is that counsel for petitioner, during course of arguments does not dispute to receive few of letters from ED as also having knowledge about proceedings pending before the NCLT, Mumbai. It is noteworthy that the ED also replied one letter and e-mail dated 22.06.2021, through its reply letter dated 25.06.2021 to the resolution professional. Thus, such material on record explicitly reflects tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction of the NCLT, to vacate the attachment orders issued by the ED is concerned, counsel for petitioner contends that NCLT lacks inherent jurisdiction to quash the attachment orders passed by the ED under PMLA, 2002 and counsel for petitioner has relied upon Section 71 of the PMLA, 2002 with the aid of judgment of the Supreme Court in case of Embassy Property Development (supra) to contend that the proceedings under the PMLA have overriding effect over the proceedings under the IB Code, 2016. Whereas in counter thereto, learned counsel for respondents has relied upon Section 32-A of the IB Code and argued that on commencement of the insolvency proceedings w.e.f. 16.04.2021, the attachment orders passed by the ED stand automatically vacated and the properties of the corporate debtor become immune from any action including the attachment and in support of this legal submission, learned counsel for respondents, has referred the judgment of the Supreme Court in case of Manish Kumar (supra). Learned counsel also pointed out that the management of Corporate Debtor-respondent No.1 has been changed and taken over by the JVD Live Space w.e.f. 28/29 July, 2021. In the opinion of this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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