The NCLT lacks jurisdiction to vacate attachment orders under the Prevention of Money Laundering Act, as it operates as a self-contained code with specific provisions for appeals.

JUDGMENT :

Manindra Mohan Shrivastava, C.J.,

1. Instant appeal is directed against the order dated 18.09.2024 passed by the learned Single Judge, whereby the interim order passed on 06.07.2023 in favour of the appellant/writ petitioner has been vacated at the instance of buyers of different flats constituting properties of a housing project developed by respondent No.1 M/s. Udaipur Entertainment World Private Limited.

2. The petitioner Union of India has filed a petition under Article 227 of the Constitution of India with a prayer to quash and set aside an order dated 24.02.2022 passed by the National Company Law Tribunal, Mumbai (for short, hereinafter referred to as ‘NCLT Mumbai’). The petitioner’s case is that the properties in dispute, in the present case, were provisionally attached by the E.D. in exercise of powers under Section 5 of the Prevention of Money Laundering Act, 2002 (for short, hereinafter referred to as ‘PMLA 2002’) after a criminal motion was initiated under an FIR dated 07.03.2016 against certain persons who are accused of having committed offence under the PMLA 2002. The order of provisional attachment passed on 02.02.2019 was subsequently confirmed by the adjudicating authority by passing an order under Section 8 of the PMLA 2002 on 19.09.2019. Subsequently, the flat buyers of the Royal Raj Vilas Project initiated Corporate Insolvency Resolution Proceedings (for short, hereinafter referred to as ‘CIRP’) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, hereinafter referred to as ‘IB Code 2016’) against the respondent No.1-the builder-corporate debtor before the NCLT, Mumbai. The confirmation of attachment by adjudicating authority under the PMLA 2002 is in assail before the PMLA Tribunal. However, during the pendency of those proceedings, the NCLT, while granting approval of the resolution plan under Section 31 of the IB Code 2016 vide its final order dated 24.02.2022, vacated the attachment order of the subject property in purported exercise of powers under Section 238 of the IB Code 2016, whereas the orders and proceedings under the PMLA 2002 shall have overriding effect over other Acts including IB Code 2016 by virtue of provisions contained under Section 71 of the PMLA 2002. Therefore, the order dated 24.02.2022 passed by the NCLT, Mumbai to the extent it vacates the attachment order is ex facie illegal and without jurisdiction. According to the petitioner, the NCLT does not have jurisdiction to nullify, sit over or set aside the orders and proceedings drawn under the PMLA 2002. Even though, there is an alternative remedy, as the order of NCLT is apparently without jurisdiction, the writ petition has been preferred.

3. On 06.07.2023, learned Single Judge passed an ex parte stay order staying the operation of the order dated 24.02.2022 passed by the NCLT, Mumbai and all further proceedings in pursuance to the said order.

4. Respondents No.2 to 26-buyers of different flats in the Royal Raj Vilas Project, on whose instance CIRP were initiated before the NCLT, moved an application for vacating ex parte stay order dated 06.07.2023 mainly on the submission that the NCLT is authorised under the provisions of the IB Code 2016 to grant approval of the resolution plan under Section 31 of the said Act and as in view of overriding clause contained under Section 238 of the IB Code 2016, the NCLT has the jurisdiction and authority vested in it under the law to vacate the interim order of attachment in respect of property, which is subject matter of property, included in the resolution plan approved under Section 31 of the IB Code 2016. Learned Single Judge, upon consideration of the submissions of the respective parties, vacated the interim order by impugned order giving rise to instant appeal.

5. Learned Additional Solicitor General argued that the learned Single Judge, while vacating interim order, failed to appreciate that a serious issue of jurisdiction of the NCLT to vacate the order passed un