Case Law Details
Sandeep Khaitan Resolution Professional for National Plywood Industries Ltd Vs JSVM Plywood Industries Ltd. (Supreme Court)
Conclusion: The power under Section 482 of the Code of Criminal Procedure may not be available to the Court to countenance the breach of a statuary provision under Sections 14 and 17 of the Insolvency and Bankruptcy Code (IBC).
Held: Respondent, JSVM Plywood Industries Ltd. had filed an application to allow it to operate its bank account maintained with the ICICI Bank Bhubaneswar and to unfreeze the bank account of its creditors over which the lien had been created and the accounts frozen pursuant to the lodging of an FIR by the appellant. Appellant contended that the former Managing Director of the Corporate Debtor in conspiracy with the respondent engaged in an illegal transaction to the tune of Rs. 32.50 lakh without authority from the appellant and in violation of Section 14 of the IBC. Appellant filed a cyber complaint and an FIR was lodged against the respondent. This was followed by filing an application under Section 19 read with Section 23 (2) of the IBC alleging non corporation by the previous management of the Corporate Debtor. Consequently, the ICICI Bank created a lien upon the bank account of the respondent based on the allegedly illegal transaction. Respondent challenged the FIR by way of a criminal petition under Section 482 of CrPC. High Court allowed this application leading to the present appeal by appellant. It was held that the power under Section 482 may not be available to the Court to countenance the breach of a statuary provision. The words ‘to secure the ends of justice’ in Section 482 cannot mean to overlook the undermining of a statutory dictate, which in this case was the provisions of Section 14, and Section 17 of the IBC. It would appear that having regard to the orders passed by NCLT admitting the application, under Section 7, and also the ordering of moratorium under Section 14 of the IBC and the orders which had been passed by Tribunal otherwise, the impugned order of the High Court resulting in the Respondent being allowed to operate the account without making good the amount of Rs 32.50 lakhs to be placed in the account of the Corporate Debtor could not be sustained.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
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