Whether NCLT has the jurisdiction to direct the Directorate of Enforcement (ED) to release the attached properties, invoking Section 32A of IBC, 2016 once a Resolution Plan that qualifies for immunity under Section 32A was approved – Mr. Shiv Charan and ors. Vs. Adjudicating Authority and Anr. – Bombay High Court

In this landmark judgment a division bench of Hon’ble Bombay High Court held that: (i) Whilst passing any order under Section 31, the NCLT not only must follow the provisions of the IBC, 2016 but also make sure that the resolution plan approved by it can be effectively implemented. (ii) It is it is wholly untenable to contend that the NCLT, and which is the Adjudicating Authority constituted under the IBC, 2016, is incompetent and/or powerless to either interpret or to give effect to the provisions of the very Act under which it was constituted. (iii) The NCLT had all powers to direct the ED to raise its attachment in relation to the attached properties of the corporate debtor once a resolution plan that qualifies for immunity under Section 32A was approved, and those very properties were the subject matter of the resolution plan. (iv) Whether the jurisdictional facts necessary to attract the immunity under Section 32A exist, is a mixed question of fact and law that the NCLT was entitled to entertain and dispose of. Once the jurisdictional facts are found to exist, whether the immunity becomes available is a question of law which is clearly within the domain of the NCLT’s jurisdiction. (v) When a resolution plan approved, quasi-judicial authorities including the Adjudicating Authority under the PMLA, 2002 must release their attachment on their own. (vi) The ED would not be a creditor at all, and no debt would be owed by the corporate debtor to the ED.

Related Posts

When a Court has to decide whether a person has really guaranteed the due performance of the contract by the principal debtor, all the circumstances concerning the transaction will have to be necessarily considered. Court cannot adopt a hyper technical attitude that the guarantor has not signed the agreement and so he cannot be saddled with the liability-P.J. Rajappan Vs. Associated Industries (Pvt.) Ltd. & another – Kerala High Court

Case Laws-SARFAESI-High Courts, IBC-Case Laws-High Courts, Indian Contract Act-Case Laws

Login with GoogleOR Username Password Remember…

Read Post »

A scheme sanctioned by the Court u/s 391 & 394 of the Companies Act, 1956 was binding on the creditors whether such creditors assented to it or not. A contract between the creditor and the principal debtor by which the creditor compounds with the principal debtor, discharges the surety-Shri Kundanmal Dabriwala Vs. Haryana Financial Corporation and another -Punjab & Haryana High Court

Case Laws-SARFAESI-High Courts, Companies Act-High Courts, IBC-Case Laws-High Courts, Indian Contract Act-Case Laws

Login with GoogleOR Username Password Remember…

Read Post »

Scroll to Top