NCLT Hyderabad: 'Provisional Order Of Attachment' Made Under PMLA Would Not Nullify The Protection Granted Under Section 32A IBC

NCLT Hyderabad bench comprising of Dr. Venkata Ramakrishna Badarinath Nandula and SH. Charan Singh in its recent order has cleared that, the provisional order of attachment under Section 5 of the Prevention of Money Laundering Act, 2002, in respect of the properties of the corporate debtor covered under the approved resolution plan, would not end the protection available to such properties under section 32A IBC. The order of attachment made under Section 5 of PMLA by the Enforcement Directorate in respect of the assets and properties of the corporate debtor forming part of the approved resolution plan is unsustainable and untenable under law as the said property is immune from the impugned provisional order of attachment under Section 32A of IBC. Bench mentioned that their inquiry, therefore, is confined only to finding "whether the provisional order of attachment under Section 5 of the PMLA, in respect of the properties of the corporate debtor covered under the approved resolution plan, would wipe out the protection available to such properties under Section 32A of the IBC?" The Tribunal holds that, in terms of Section 60 of the IBC, this adjudicating authority has the jurisdiction to adjudicate on the impugned provisional order of attachment only to the extent of examining whether the 'protection' envisaged under Section 32A of the IB Code can be extended to the properties of the corporate debtor forming part of the approved resolution plan till a resolution takes place or the sale of liquidation assets occurs.