Milan Textile Enterprises Pvt. Ltd. Vs Initiating Officer (Madras High Court)
Madras High Court held that in terms of provisions of section 32A of the Insolvency and Bankruptcy Code 2016 no action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the CIRP.
Facts- Milan Textile Enterprises Private Limited purchased the petition-mentioned property vide sale deed dated 26.08.2004 registered on the file of Sub Registrar, Thallakulam. The Deputy Commissioner of Income Tax (Benami Prohibition), Chennai formed the opinion that this property is being held benami by the petitioner herein. Hence, provisional attachment order under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 was issued on 01.11.2019 restraining the petitioner from transferring or charging the said property. Vide order dated 28.01.2020, it was directed that the attachment would continue until further order was passed by the adjudicating authority. These two orders are assailed in this writ petition.
The prime contention of the petitioner is that when once the insolvency resolution plan had been approved by the NCLT and a new management has taken over, no action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the CIRP, where such property is covered under the Resolution Plan which results in the change in control of the corporate debtor.
