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[Insolvency] NCLT empowered to direct ED to release attached properties: Bombay High Court

ED also filed a cross petition in High Court questioning NCLT’s jurisdiction and power to direct release of properties.

The High Court did not agree with ED’s argument that the NCLT does not have the power to direct the ED to lift its attachment that had been imposed under the provisions of the PMLA.

“Section 32A itself mandates that once a resolution plan is approved, no action can be taken against the properties of the corporate debtor in relation to an offence committed prior to the commencement of the CIRP of the corporate debtor, where such property is covered under a resolution plan approved by it under Section 31 of the IBC, 2016. It is it is wholly untenable to contend that the NCLT, and which is the Adjudicating Authority constituted under the IBC, 2016, is incompetent and/or powerless to either interpret or to give effect to the provisions of the very Act under which it was constituted,” the High Court held.

The division bench thus ruled that the NCLT had all powers to direct the ED to raise its attachment concerning the attached properties of the corporate debtor once a resolution plan that qualifies for immunity under Section 32A was approved, and those very properties were the subject matter of the resolution plan.

Source: Barandbench

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