The Tribunal lacks jurisdiction to modify its prior orders under Section 60(5) of the Code, and attachment of properties under PMLA must be resolved by the Special Court.

ORDER

IA 3277/2023

1. Heard the Ld. Counsel for the Applicant and the Liquidator.

2. RELIEFS SOUGHT: The Applicant being the Deputy Director of Enforcement at Directorate of Enforcement, Ahmedabad Zonal Office has preferred the present Interlocutory Application (IA) praying for (a) condonation of delay of 629 days in filing the IA; (b) modification of the Order dated 18.11.2019 passed in MA No.2357 of 2019 with respect to the priorities of claim among the parties; and (c) direction for halting further liquidation proceedings of the Corporate Debtor during pendency of the IA.

3. FACTS OF THE CASE: The Applicant had issued Provisional Attachment Order No.15/2014 dated 26.12.2014 to attach 5 (five) immovable properties of the Corporate Debtor, which prima facie fell within the definition of “proceeds of crime” under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as “the PMLA”). Subsequently, another Provisional Attachment Order (PAO) bearing No.01/2017 dated 09.02.2017 was issued in respect of another 4 (four) immovable properties held in the name of the Corporate Debtor.

3.1Both PAOs were confirmed by the Adjudicating Authority, PMLA, New Delhi vide Orders dated 25.05.2015 and 12.07.2017 respectively. Following these confirmations, the Applicant filed Prosecution Complaints before the Special Court, PMLA, Ahmedabad (Principal District and Sessions Judge, Ahmedabad - Rural) on 31.03.2015 and 06.07.2018 respectively. In these complaints, the Applicant sought confiscation of the attached properties involved in money laundering under Section 8(5) of the PMLA and prosecution of the accused persons for offences punishable under Section 4 of the PMLA.

3.1 However, the Applicant has not yet taken possession of the attached properties due to Orders dated 13.12.2017 and 28.08.2017 passed by the Hon’ble Appellate Tribunal, PMLA, New Delhi. By Order dated 13.12.2017, the Hon’ble Appellate Tribunal remanded the matter concerning PAO No.15/2014 to the Adjudicating Authority, New Delhi. Further, vide Order dated 28.08.2017, the Hon’ble Appellate Tribunal stayed the eviction notices issued for the possession of the attached properties.

3.2 Thereafter, the Corporate Debtor was admitted to CIRP vide order of this Tribunal dated 01.01.2018. Later, the Corporate Debtor went into liquidation vide order of this Tribunal dated 31.12.2018 and the Respondent was appointed as the Liquidator. The Respondent filed Miscellaneous Application No.2357 of 2019 before this Tribunal, seeking directions to lift the attachment made by the Applicant. This Tribunal allowed the said Miscellaneous Application by passing Order dated 18.11.2019 inter alia directing the Applicant Department to lift the attachment in respect of certain assets of the Corporate Debtor so that the properties in question could be put to sale in liquidation proceedings and the sale proceeds thereof could be distributed in accordance with the order of priority prescribed in Section 53 of the Insolvency and Bankruptcy Code (hereinafter referred to as “the Code”).

3.3 T he said Order of this Tribunal was subsequently challenged by the Sales Tax Department, Vadodara through a Special Civil Application before the Hon’ble Gujarat High Court. The Hon’ble High Court granted a stay on the operation, implementation and execution of the Order dated 18.11.2019. Thereafter, on 17.03.2020, the Hon’ble High Court passed an Order to maintain the status quo. However, the Respondent subsequently moved an application before the Hon’ble Gujarat High Court for vacating the said Order. Consequently, on 29.09.2021, the Hon’ble High Court directed that the sale of the Corporate Debtor’s assets might proceed, but the sale procee