Any attachment of a tainted assets of Corporate Debtor prior to the commencement of CIRP would always be available to fulfil the object and achieve the goal of IBC | Provisional Attachment Order under PMLA will not bar the admission of insolvency proceedings against the Corporate Debtor under IBC – State Bank of India Vs. Shree Mahalaxmi Corporation Pvt. Ltd. – NCLT Kolkata Bench

In this important decision, NCLT Kolkata Bench held that:
(i) When confiscation of the ‘Proceeds of Crime’ takes place, PMLA is performed by the Government not in its status/capacity/role as Creditor. the legislative intent of the PMLA is to prevent a person engaged in criminal activity intending to convert the “proceeds of crime” into assets intending to be projected as legitimate or untainted and to prohibit a person indulging in money laundering to avail of the “proceeds of crime” to get a discharge for his civil liability towards his creditors for the simple reason such assets are not lawfully his to claim.
(ii) Any attachment of a tainted assets of the Corporate Debtor prior to the commencement of CIRP would always be available to fulfil the object and achieve the goal of IBC. The Provisional Attachment Order under PMLA will not bar the admission of insolvency proceedings against the Corporate Debtor under IBC.
(iii) The case of State Bank of India v. R.P. Info Systems Ltd. decided on 19.02.2024, reported at (2024) ibclaw.in 211 NCLT is identical to the instant case.

Any attachment of a tainted assets of Corporate Debtor prior to the commencement of CIRP would always be available to fulfil the object and achieve the goal of IBC | Provisional Attachment Order under PMLA will not bar the admission of insolvency proceedings against the Corporate Debtor under IBC – State Bank of India Vs. Shree Mahalaxmi Corporation Pvt. Ltd. – NCLT Kolkata Bench Read Post »