Special issues-Bank Accounts freezing/Property Attachment

If a bank account of the Corporate Debtor was under the garnishee orders from the dates prior to initiation of CIRP, it does not form part of the liquidation estate – CS Dr Ahalada Rao Vummenthala, Liquidator of Kadevi Industries Ltd. Vs. Axis Bank – NCLT Hyderabad Bench

The Hon’ble NCLT, Hyderabad Bench observed that in the present instance, the account having a balance of Rs. 18,61,866 was under the garnishee orders of much larger amounts from the different Tax Authorities from the dates prior to initiation of CIRP against the Corporate Debtor. This amount was unavailable to the Corporate Debtor prior to the commencement of the CIRP, and as such, it does not form part of the liquidation estate.

If a bank account of the Corporate Debtor was under the garnishee orders from the dates prior to initiation of CIRP, it does not form part of the liquidation estate – CS Dr Ahalada Rao Vummenthala, Liquidator of Kadevi Industries Ltd. Vs. Axis Bank – NCLT Hyderabad Bench Read Post »

In a proceeding before a Court or Tribunal, all necessary parties are to be impleaded, even if, a party is not a necessary party, which may be treated as a proper party | Even if, Directorate of Enforcement was not necessary party in the Appeal filed by the SRA, it would have been appropriate that ED was also heard while deciding the issue – Directorate of Enforcement – NCLAT New Delhi

The Hon’ble NCLAT recalled its order reported in (2024) ibclaw.in 494 NCLAT, on the IA filed by ED. The ED was not a party in the above order. The Hon’ble Bench held that in a proceeding before a Court or Tribunal, all necessary parties are to be impleaded, even if, a party is not a necessary party, which may be treated as a proper party, whose presence may be necessary for deciding the issues, which have come up before the Court or who may have some stake in the issues, which has arisen for adjudication.

In a proceeding before a Court or Tribunal, all necessary parties are to be impleaded, even if, a party is not a necessary party, which may be treated as a proper party | Even if, Directorate of Enforcement was not necessary party in the Appeal filed by the SRA, it would have been appropriate that ED was also heard while deciding the issue – Directorate of Enforcement – NCLAT New Delhi Read Post »

No permission can be granted to the ex-employee/ key managerial person to operate the bank accounts after commencement of CIRP and appointment of IRP – Sanjay Chandrakant Jagtap Vs. lshwar Punjabi and Anr. – NCLAT New Delhi

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No permission can be granted to the ex-employee/ key managerial person to operate the bank accounts after commencement of CIRP and appointment of IRP – Sanjay Chandrakant Jagtap Vs. lshwar Punjabi and Anr. – NCLAT New Delhi Read Post »

Once the CIRP is initiated, the amount lying in “No Lien Account” is an asset of the Corporate Debtor and during moratorium, the Bank in any case cannot appropriate this money – Bank of India Vs. Mr. Naren Sheth RP, Jaybharat Textiles & Real Estate Ltd. – NCLAT New Delhi

The Hon’ble NCLAT held that once the CIRP was initiated, the amount lying in the “No Lien Account”, which on that date belonged to the Corporate Debtor, by natural corollary is an asset of the Corporate Debtor which the IRP/RP was obliged to take under his control/custody as per provisions of Section 18 of IBC, 2016. Since the moratorium had commenced, the Bank in any case could not have appropriated this money.

Once the CIRP is initiated, the amount lying in “No Lien Account” is an asset of the Corporate Debtor and during moratorium, the Bank in any case cannot appropriate this money – Bank of India Vs. Mr. Naren Sheth RP, Jaybharat Textiles & Real Estate Ltd. – NCLAT New Delhi Read Post »

NCLT, having derived its powers under the IBC, has no jurisdiction per se to decide on an order passed by the Adjudicating Authority under PMLA and to direct the ED to release attachment unless Section 32A of the Code is triggered – DSK Motors Pvt. Ltd. Vs. Deputy Director Directorate of Enforcement – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:
(i) This Tribunal, having derived its powers under the I&B Code, has no jurisdiction per se to decide on an order passed by the Adjudicating Authority under PMLA and to direct the ED to release attachment unless Section 32A of the Code is triggered.
(ii) Unless the pre-requisites under section 32A of the Code is fulfilled, there is no impediment to the ED or the Adjudicating Authority under PMLA to go ahead with the proceedings under PMLA.
(iii) Judgment passed by Hon’ble Bombay High Court in Mr. Shiv Charan & Ors. Vs. Adjudicating Authority under PMLA & Anr. (2024) ibclaw.in 154 HC is distinguishable since the observations made therein pertain to a circumstance where resolution plan was approved by the Adjudicating Authority.

NCLT, having derived its powers under the IBC, has no jurisdiction per se to decide on an order passed by the Adjudicating Authority under PMLA and to direct the ED to release attachment unless Section 32A of the Code is triggered – DSK Motors Pvt. Ltd. Vs. Deputy Director Directorate of Enforcement – NCLT Mumbai Bench Read Post »

Creating charge/mark red entry in land revenue record pertaining to the Corporate Debtor’s properties during the moratorium is not permissible and continuing the said red entry/charge after approval of acquisition plan in liquidation process is clearly illegal & arbitrary – Su-Kam Power System Ltd. and Anr. Vs. State of Himachal Pradesh and Ors. – Himachal Pradesh High Court

Hon’ble Himachal Pradesh High Court held that:

(i) Since the provisions of the said Code had overriding effect on all laws in view of Section 238 of the Code, it was not permissible for the respondents to create a charge on the property of the Corporate Debtor during the currency of the moratorium in violation of the provisions of the IBC.
(ii) As per the amended Section 31 of the Code, the Clean Slate principle of taking over Corporate Debtor under a Resolution Plan, will also apply to taking over by way of acquisition plan.
(iii) The plea of the respondents that the tax dues claimed by them will have priority as a “Crown Debt”, therefore, cannot be accepted, and their action in continuing the said red entry/charge on account of dues recoverable from erstwhile management of the Corporate Debtor under the Himachal Pradesh Value Added Tax Act, 2005, Himachal Pradesh Goods and Services Tax Act, 2017 and the CST Act, 1956, would be clearly illegal & arbitrary.

Creating charge/mark red entry in land revenue record pertaining to the Corporate Debtor’s properties during the moratorium is not permissible and continuing the said red entry/charge after approval of acquisition plan in liquidation process is clearly illegal & arbitrary – Su-Kam Power System Ltd. and Anr. Vs. State of Himachal Pradesh and Ors. – Himachal Pradesh High Court Read Post »

Successful Resolution Applicant (SRA) is entitled to relief of extension of benefit of protection of Section 32A of IBC to lift the attachment under PMLA by Enforcement Directorate over the assets of the Corporate Debtor – Vantage Point Asset Pte. Ltd Vs. Gaurav Misra, RP of Alchemist Infra Reality Ltd. – NCLAT New Delhi

In this case, the NCLT while approving the Rplan, refused to grant prayer made by the SRA for release of the assets attached by ED under PMLA.

Hon’ble NCLAT referring judgments in Shiv Charan and Ors. vs. Adjudicating Authority and Anr. (2024) ibclaw.in 154 HC, Rajiv Chakraborty vs. Directorate of Enforcement (2022) ibclaw.in 257 HC and Manish Kumar vs. Union of India and Anr. (2021) ibclaw.in 16 SC allowed the reliefs and set aside relevant portion from the impugned order and held that the SRA is entitled to relief of extension of benefit of protection of Section 32-A to lift the attachment by Enforcement Directorate over the assets of the Corporate Debtor.

Successful Resolution Applicant (SRA) is entitled to relief of extension of benefit of protection of Section 32A of IBC to lift the attachment under PMLA by Enforcement Directorate over the assets of the Corporate Debtor – Vantage Point Asset Pte. Ltd Vs. Gaurav Misra, RP of Alchemist Infra Reality Ltd. – NCLAT New Delhi Read Post »

NCLAT directs that IRP shall not impose any freeze on the account which are under the RERA direction – Vinod Kumar Jha, Directors (Powers Suspended) of Ajnara Realtech Ltd. Vs. Sachin Dhiman and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that it is for the RERA to take appropriate steps and further directions if there is any non-compliance of the RERA direction. Insofar as the projects which are not covered by the order of the RERA dated 30.06.2023, construction shall be carried out under the supervision of the IRP with the assistance of the promoters, directors, staff and employees. We are also of the view that for carrying out the construction which are covered by RERA direction, IRP shall not impose any freeze on the account which are under the RERA direction.

NCLAT directs that IRP shall not impose any freeze on the account which are under the RERA direction – Vinod Kumar Jha, Directors (Powers Suspended) of Ajnara Realtech Ltd. Vs. Sachin Dhiman and Anr. – NCLAT New Delhi Read Post »

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