The Insolvency and Bankruptcy Code's moratorium precludes enforcement actions under the Prevention of Money Laundering Act, as both statutes serve distinct legislative purposes without infringing on each other's objectives.

JUDGMENT

A. PROLOUGE

1. This writ petition raises the important question of the impact that a moratorium that comes into effect in terms of Section 14 of the Insolvency and Bankruptcy Code, 2006¹ would have on the powers of the Enforcement Directorate² to enforce an attachment under the provisions of the Prevention of Money Laundering Act, 2002³ . The petition raises a challenge to orders of attachment which have been made by the ED in exercise of powers conferred by the PMLA. While the writ petition as originally framed had assailed the validity of Provisional Attachment Orders⁴ dated 08 July 2020 and 05 August 2020, subsequently and since those orders came to be confirmed by the Adjudicating Authority, an amendment application was moved questioning the confirmation orders dated 01 January 2021 and 29 January 2021. The petition has been instituted by the Resolution Professional⁵ of Era Infra Engineering Limited⁶ which was admitted to insolvency proceedings under the provisions of the IBC. The challenge to the orders of attachment is essentially founded on the provisions of Section 14 of the aforesaid enactment with the petitioner contending that once the moratorium had come into effect, the ED stood denuded of jurisdiction to exercise powers under the PMLA. Before proceeding ahead to notice the submissions which have been addressed, it would be pertinent to notice the following essential facts.

B. THE ESSENTIAL FACTS

2. On 19 April 2018, the ED proceeded to freeze 74 bank accounts of EIEL in purported exercise of powers conferred by Section 102 of the Code of Criminal Procedure, 1973⁷ . The insolvency proceedings would be deemed to have commenced on 08 May 2018 when the petition was admitted and it is this date which would thus constitute the date of commencement of the Corporate Insolvency Resolution Process⁸ . Assailing the action initiated by the respondent under Section 102 of the CrPC, the petitioner preferred W.P.(C)9566/2019 which came to be allowed with the learned Judge quashing the orders dated 04 October 2018 and 19 April 2018 in terms of which its bank accounts had been frozen. The learned Judge, however, refrained from interfering with the order of 07 October 2019 which had been passed under Section 5 of the PMLA and had provisionally attached certain properties. The Court shall deal with the aforesaid order hereinafter. Proceeding further, it may be noted that on 04 October 2018, the Adjudicating Authority passed an order upholding the freezing of the bank accounts detailed hereinabove. Thereafter and on 07 October 2019, the respondent proceeded to attach 49 bank accounts of EIEL in exercise of powers conferred by Section 5 of the PMLA. It was this order which was left untouched on the first writ petition which had been filed by the petitioner and was referred to hereinabove.

3. Aggrieved by the PAO pertaining to the 49 bank accounts of EIEL, the petitioner filed an application to set aside the same before the National Company Law Tribunal⁹ . During the pendency of that challenge, the Adjudicating Authority by its order of 17 March 2020 confirmed the order of attachment. On 21 May 2020, the corporate debtor is said to have received an income tax refund pertaining to the assessment year 2015-2016. On 07 July 2020, the petitioner received an e mail from Axis Bank, with which its bank accounts aforenoted were maintained, to ascertain whether the debit freeze as imposed by ED stood lifted. The petitioner was also called upon to ascertain whether any other attac