Pranav B Prem

The National Company Law Tribunal (NCLT), New Delhi Bench, Court-IV, comprising Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Shri Atul Chaturvedi (Technical Member), has dismissed applications filed by the Resolution Professional (RP) of Dr. Jain Video on Wheels Ltd., holding that the Tribunal has no jurisdiction to interfere with property attachments confirmed under the Prevention of Money Laundering Act, 2002 (PMLA).

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Background of the Case

The RP, Mr. Vikram Kumar, filed two applications (I.A. 4373 of 2021 and I.A. 5680 of 2023) under Sections 14(1) and 60(5) of the Insolvency and Bankruptcy Code (IBC). He sought directions to stay proceedings before the PMLA Adjudicating Authority and to set aside the provisional attachment order dated 31 March 2021 over an industrial plot belonging to the corporate debtor. The attachment was later confirmed on 6 December 2021.

The RP argued that the attachment violated the moratorium under Section 14 of the IBC, which bars continuation of proceedings and alienation of assets once Corporate Insolvency Resolution Process (CIRP) begins. He contended that PMLA proceedings were “civil proceedings” and thus hit by Section 14. Reliance was placed on Supreme Court rulings in P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. (2021), Alchemist ARC v. Hotel Gaudavan Pvt. Ltd. (2017), and other decisions. The RP further argued that under Section 238 of the IBC, the Code overrides other laws in case of conflict.

Enforcement Directorate’s Stand

The Directorate of Enforcement (ED) opposed the application, pointing out that the attachment was made under Section 5 of PMLA based on a CBI FIR alleging inflated bills and diversion of funds, causing a loss of over ₹2.83 crore to the exchequer. The ED stressed that the property represented “proceeds of crime” and its attachment was confirmed by the PMLA Adjudicating Authority.

Relying on precedents such as Embassy Property Developments Pvt. Ltd. v. State of Karnataka (2019), Varrsana Ispat Ltd. v. Deputy Director, ED (2019), and Kiran Shah v. ED (2021), the ED argued that the NCLT cannot review or override decisions of a coordinate adjudicating authority under a different statute. It further submitted that Section 32A of the IBC, which provides immunity to corporate debtors’ assets, applies only after approval of a resolution plan — which was not the case here.

Tribunal’s Findings

After hearing both sides, the NCLT dismissed the applications. It observed:

• The moratorium under Section 14 of the IBC does not extend to proceedings under the PMLA, which has its own statutory framework and remedies.

• The confirmed attachment order under PMLA falls exclusively within the jurisdiction of PMLA authorities, not the NCLT.

• Section 32A immunity is available only post-approval of a resolution plan; since no plan was approved, the protection did not apply.

• Directing de-attachment would amount to trenching upon the jurisdiction of the PMLA adjudicating authority.

The Bench emphasized that the objectives of the PMLA (preventing money laundering and confiscating proceeds of crime) are distinct from those of the IBC, and both statutes must be harmoniously applied in their respective domains. The RP’s remedy lies before the PMLA Appellate Tribunal under Sections 8, 26, and 42 of PMLA.

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Accordingly, the NCLT dismissed the RP’s applications as devoid of merit and held that it lacked jurisdiction to interfere with attachments confirmed under PMLA. The order reinforces the principle that NCLT’s powers are confined to the IBC framework and do not extend to proceedings under other special legislations like PMLA.

Appearance

For the Applicant: Mr. Bhargav Thali, Advocate.

For the RP: Mr. Abhishek Anand, Mr. Karan Kohli, Ms. Vaishnavi, Advocates.

Cause Title: Vikram Kumar (RP) V. Directorate of Enforcement

Case No: I.A. NO. 4373 OF 202 & I.A. 5680 OF 2023 IN C.P. IB NO 843 (ND) OF 2018

Coram: Shri Manni Sankariah Shanmuga Sundaram (Judicial Member), Shri Atul Chaturvedi (Technical Member)