NCLT: REJECTS LIQUIDATOR’S APPLICATION SEEKING RELEASE OF PROPERTIES ATTACHED UNDER PMLA

NCLT: REJECTS LIQUIDATOR’S APPLICATION SEEKING RELEASE OF PROPERTIES ATTACHED UNDER PMLA

NCLT refuses to order de-attachment of Rotomac Global Pvt. Ltd.’s (‘Corporate Debtor’) properties, attached by the Enforcement Directorate (‘ED’) under the Prevention of Money Laundering Act, 2002 (‘PMLA’); Notes that the Corporate Debtor was under liquidation, but under the PMLA, ED had passed a Provisional Attachment Order to impose restraint on transfer, disposal or dealing with the properties, in any manner; Further takes note of the Liquidator’s plea for the properties to be de-attached so as to declare the creditors’ right on the attached properties of the Corporate Debtor, to recover their dues; Comparing the objects of enacting the PMLA and the Insolvency and Bankruptcy Code, 2016 (‘IBC’) NCLT remarks that “the object of bringing I&B Code is to maximize the assets of the Corporate Debtor balancing the interest of all the stakeholders” whereas “the PMLA was created to forfeit illegal properties and to prevent the money laundering activities which are threat to financial system of the country and its integrity and sovereignty”; Lastly highlighting the fact that the PMLA provides for various remedies which the Liquidator can resort to, rules that the properties cannot be de-attached, without the Liquidator taking recourse to the remedies provided under the PMLA:Allahabad NCLT

The order was passed by Shri. Bikki Raveendra Babu (Member-Judicial) and Ms. Saroj Rajware (Member-Technical).