Anil Kohli Vs Directorate of Enforcement (NCLAT Delhi)
NCLAT Delhi held that section 238 of the Insolvency & Bankruptcy Code, 2016 [IBC] cannot override the Prevention of Money Laundering Act, 2002 [PMLA]. Thus, attachment under PMLA cannot be undone merely because CIRP is ongoing.
Facts- This appeal arises from the impugned order dated 21.05.2018, passed by the National Company Law Tribunal (NCLT), Mumbai Bench (‘Adjudicating Authority’). The appeal has been filed u/s. 61(1) of the Insolvency and Bankruptcy Code, 2016 by Mr. Anil Kohli, the Resolution Professional (RP) for Dunar Foods Limited (Corporate Debtor) challenging the refusal of the Adjudicating Authority to direct the Directorate of Enforcement (ED) to release the provisionally attached assets of the Corporate Debtor.
The Appellant/RP asserts that the continued attachment of properties under the Prevention of Money Laundering Act, 2002 (PMLA) violates the moratorium u/s. 14 of the IBC and frustrates the CIRP objectives.
Conclusion- The IBC cannot be said to override the PMLA merely because the ED’s attachment interferes with the CIRP. The ED does not act as a creditor, but as a public enforcement agency. The attached assets are not to satisfy creditors, but to uphold penal objectives and international obligations under FATF and UN Conventions.
