Whether attachment of property of Corporate Debtor under PMLA prior to the initiation of CIRP bars admission of Section 7 application under IBC and a Creditor’s right of secured interest over the property remains secured – State Bank of India Vs. R.P. Info Systems Ltd. – NCLT Kolkata Bench
In Section 7 application, Hon’ble NCLT, Kolkata Bench holds that:
(i) Properties attached under the PMLA prior to the initiation of the CIRP, should still became available to fulfil objects of the IBC.
(ii) PMLA and I&B Code subserve completely different, divergent and distinct purpose.
(iii) The subject property which stands attached under the PMLA can be released in the event a Corporate Debtor is admitted by the competent authority in CIRP and a creditor’s right of secured interest over the property remains secured, it would still have the right to enforce its secured interest over the property in question.
(iv) Irrespective of the prior attachment order under the PMLA, the tainted properties of the Corporate Debtor would always be available to fulfil the object and achieve the goal of IBC.
(v) Attachment order under PMLA will not bar admission under IBC.
(vi) Hon’ble Bench has admitted Section 7 application.