NCLAT directs ‘Corporate Debtor’ to approach the ‘Competent Forum’ by pursuing its remedy in Appeal under PMLA [Read Order]

The Delhi Bench of National Company Law Appellate Tribunal (NCLAT) has directed the ‘Corporate Debtor’ to approach the ‘Competent Forum’ by pursuing its remedy in Appeal under Prevention of Money Laundering Act (PMLA).

The ‘Appellant’/Resolution Professional, Kiran Shah has preferred the instant Company Appeal 1 as an ‘Aggrieved Person’ being dissatisfied with the order passed by the ‘Adjudicating Authority’.

Assailing the correctness, validity and legality of the impugned order passed by the ‘Adjudicating Authority’, the Appellant submitted that the impugned order is bad in law, since the attachment proceedings and its consequent order under the Prevention of Money Laundering Act. 2002 being a ‘Civil Proceedings’ ought to have been stayed because of the ‘Moratorium’ in terms of Section 14 of the I&B Code, 2016.

The appellant, the ‘Adjudicating Authority’ had failed to appreciate that upon admission of the ‘Application’ seeking initiation of the CIRP, the ‘moratorium’ had commenced, thereby imposing ‘stay’ on any kind of proceedings. As such, it is the plea of the Appellant that the ‘Attachment Proceedings’ and its resultant order under PMLA being Civil Proceedings should have been stayed with effect from 06.09.2019.

The coram of Judicial Member Justice M.Venugopal, Technical Member, V.P. Singh and Dr. Ashok Kumar Mishra said, “this ‘Tribunal’ makes it crystalline clear that the proper recourse to be resorted to by the ‘Corporate Debtor’ is to approach the ‘Competent Forum’ by pursuing its remedy in Appeal No. 33387/2019 (filed on 27.12.2019) under the ‘Prevention of Money Laundering Act, 2002’ to its logical end or any other ‘Jurisdictional Forum’ (other than the purview of I & B Code, 2016,) of course in the manner known to Law and in accordance with Law, if it so desires/advised.”

“It is significantly pointed out by this ‘Tribunal’ that the Judgment of this Tribunal in JSW Steel’s Case( Vide Comp. App.(AT) (Ins) No. 957 of 2019)is in applicable to the facts of the present case before this ‘Tribunal’ because of the latent and patent fact. There is no final approval of Resolution Plan in Company Appeal (AT) (Ins) No. 817 of 2021 and that apart the attachment order was confirmed by the Adjudicating Authority under the prevention of ‘Money Laundering Act’ of course after providing an opportunity of ‘Hearing’ to the Appellant/ Resolution Professional,” the NCLAT noted.

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