Canara Bank Vs Deccan Chronicle Holdings Limited (NCLT Hyderabad)
NCLT Hyderabad held that provisional order of attachment u/s. 5(1) of the PMLA of the properties of the corporate debtor covered under the approved resolution plan would not wipe of the protection available to such properties u/s. 32A of I&B Code.
Facts- The present application is filed by SREI Multiple Assets Investment Trust – Vision India Fund, the successful Resolution Application of Deccan Chronicle Holdings Limited mainly praying that declaration that the assets and/or properties of the Corporate Debtor which form part of the Resolution Plan cannot be attached by the Respondent No. 1 (i.e. Enforcement Directorate) by the order purportedly issued u/s. 5(1) of the Prevention of Money Laundering Act, 2002 after approval of Resolution Plan.
Conclusion- On careful examination of the ‘impact’ of the impugned provisional order of attachment on the implementation of the approved resolution plan by the Successful Resolution Applicant (SRA) and taking into consideration the ‘clean slate’ theory propounded by Hon’ble Supreme Court, besides the very object behind introducing section 32A by way of an amendment in I&B Code, in our considered view, the power of this Tribunal to interfere with the “impugned measure” is well within the teeth of section 60 (5)(c) of IB Code.
Held that, all the assets and properties of the corporate debtor which formed part of the approved resolution plan for the resolution of the insolvency of the corporate debtor, are immune from the provisional order of attachment made vide order No.1 of 2020, ECIR No.CIR/HYZO/02/2015 dated 15.10.2020, under section 5(1) of Prevention of Money Laundering Act, 2002” the Bench concluded.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
This Application is filed by SREI Multiple Assets Investment Trust – Vision India Fund, the successful Resolution Applicant of Deccan Chronicle Holdings Limited praying that:
“(a) Declaration that the assets and/ or properties of the Corporate Debtor which form part of the Resolution Plan cannot be attached by the respondent no.1 by the Order No.1/ 2020 (In ECIR No.CIR/ HYZO/ 02/ 2015) purportedly issued under section 5(1) of the Prevention of Money Laundering Act, 2002 after approval of the Resolution Plan.
(b) An order quashing the provisional order of attachment dated October 15, 2020 being Order No.1/ 2020 (In ECIR No.CIR/ HYZO/ 02/ 2015) purportedly issued under section 5(1) of the Prevention of Money Laundering Act, 2002 by the respondent no.1.
(c) An order of injunction be passed restraining the respondent no.1 from taking any step and/ or further step in pursuance of the order dated October 15, 2020 being Order No.1/ 2020 (In ECIR No.CIR/ HYZO/ 02/ 2015) purportedly issued under section 5(1) of the Prevention of Money Laundering Act, 2002 in respect of assets and/ or properties mentioned in paragraph 7 hereof during the pendency of this application.
(d) An order staying the operation of the order dated October 15, 2020 being Order No.1/ 2020 (In ECIR No.CIR/ HYZO/ 02/ 2015) purportedly issued under section 5(1) of the Prevention of Money Laundering Act, 2002 by the respondent no.1 insofar as they purport to attach the assets and/or properties mentioned in paragraph 7 hereof during pendency of this application.
(e) Ad interim order in terms of prayers above.”
2. By Board Resolution (Annexure ‘A’, page 45 of the IA), Shri Arindam Mukherjee is authorized to affirm this IA on behalf of the applicant.
3. Respondent no.1 is the Enforcement Directorate, Department of Revenue, Ministry of Finance, a law enforcement agency and economic intelligence agency responsible for enforcing economic laws. Respondent no.2 is Chairman of the Supervisory Committee of the Corporate Debtor and the erstwhile IRP of the Corporate Debtor. Respondents no.3 to 6 are proforma parties, who have charges in respect of assets of the properties of the Corporate Debtor registered in their respective names under the approved Resolution Plan of the Corporate Debtor. Assets of respondent no.1 are required to be transferred to respondents no.3 to 6. Whereas, Deccan Chronicle Holdings Limited is the Corporate Debtor, whose management and control are vested with the Successful Resolution Applicant, after approval of Resolution Plan.
4. Averments made in the IA:
4.1 Vide order dated 05.07.2017 and 19.07.2017 (continuation order) (Annexure ‘B’, page 47 and 70 of this IA) passed in CP IB No.41/7/ HDB/ 2017, Deccan Chronicle Holdings Limited has been admitted into CIRP and respondent no.2 herein was appointed as Resolution Professional. Respondent no.2 has taken all the required steps, such as, constitution of CoC, inviting Expression of Interest. After extension of date for receiving Expression of Interest (EoI), 11 participants submitted EoIs, out whom two Resolution Applicants were in the forefront, viz. Arm Infra & Utilities and SREI Multiple Assets Investment Trust – Vision India Funds (the applicant herein). Fifteenth CoC, has approved the Resolution Plan submitted by the applicant with 81.30% votes under section 30(4) of the Code. Ultimately, the CIRP concluded on 15.02.2019. This Tribunal vide order dated 03.06.2019 (Annexure ‘C’) passed in IA No.66 of 2019 has approved the Resolution Plan submitted by respondent no.2 herein. Annexure ‘D’, page 103, is the Resolution Plan dated 11.12.2018 of this IA.
4.2 The Resolution Plan submitted by the applicant, inter alia, records the terms and conditions for implementation of the Resolution Plan, wherein the Financial Creditors of the Corporate Debtor and/ or its assignees or nominees including the proforma respondents no.3 to 6 hold exclusive charge in the manner more fully and particularly described in Exhibit ‘E’, Part ‘B’ (page 145 of the IA) of the Resolution Plan.
