REPORTABLE

2026 INSC 187 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7140 of 2022 S. RAJENDRAN ….APPELLANT(S)

VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX (BENAMI PROHIBITION) & ORS.….RESPONDENT(S)

WITH CIVIL APPEAL NO. 6971 OF 2025 WITH CIVIL APPEAL NO. 6661 OF 2023 WITH CIVIL APPEAL NO. 6662 OF 2023

J U D G M E N T

1. The present batch of appeals arises out of the impugned judgments and orders dated 18.08.2022 and 13.03.2023 passed by the National Company Law Appellate Tribunal, Chennai bench (hereinafter referred to as “NCLAT”). By the said impugned orders, the NCLAT declined to interfere with the decision of the National Company Law Tribunal Signature Not Verified Digitally s(ignhed ebyreinafter referred to as “NCLT”) and refused to adjudicate the KAPIL TANDON Date: 2026.02.24 Reason:

appellant- liquidators' applications challenging the provisional attachment orders passed by the authorities under the Prohibition of Benami Property Transactions Act, 1988, (“Benami Act”), holding that the NCLT lacks jurisdiction to entertain such challenges and that the remedy lies exclusively before the competent forum constituted under the Benami Act. Accepting the concurrent findings of NCLT and NCLAT, we have held that orders passed under Benami Act cannot be questioned before authorities under the Insolvency and Bankruptcy Code, 2016 (“IBC”). For the reasons to follow, we dismiss these appeals.

I. Factual Background:

2. For the sake of convenience, we shall refer to the factual matrix of the lead appeal. The facts in the connected appeals, though pertaining to distinct corporate entity, are substantially similar in their material particulars and give rise to identical questions of law.

3. When an illegal sale, in the nature of a benami transaction came to light, investigation by the authorities under the Benami Act revealed that the promoters of the corporate debtor, M/s Padmaadevi Sugars Ltd., formerly S.V. Sugar Mills Ltd., the "Patel Group," had transferred their 100% shareholding to the beneficial owner, V.K. Sasikala, through an intermediary, an advocate named Mr. S. Senthil, for a consideration of approximately Rs. 450 Crores, paid in demonetised high-value currency notes. As investigation concluded into commission of offence, authorities invoked Section 24 of the Benami Act and issued a show cause notice dated 01.11.2019.

4. The genesis of the controversy as portrayed in the show cause notice lies in search and seizure operation conducted under Section 132 of the Income Tax Act, 1961 in November 2017 against V.K. Sasikala and her associates. During these operations, incriminating documents that were unearthed contained explicit references to asset purchases made during the demonetization period i.e. November-December 2016, through entries marked "Patel: Sugar 386 + Bank Loan" and "Sugar Mill, Kancheepuram". Further, investigation identified advocate S. Senthil as the intermediary who, upon confrontation, admitted under oath to authoring these notes at the dictation of V.K. Sasikala for purchasing these properties using demonetised currency.

5. The documentary trail was further corroborated by a subsequent search on 18.11.2017 at a serviced apartment used by the intermediary, where authorities recovered the original share certificates of M/s S.V. Sugar Mills Ltd. now Padmaadevi Sugars Ltd. standing in the names of the Patel family members, alongside an unsigned Memorandum of Understanding (MoU). Confronted with this, Shri Hitesh Shivgan Patel, representing the management of the corporate debtor, recorded a sworn statement admitting that the Patel Group had negotiated the sale of the sugar factory and assumed bank liabilities for a total consideration of Rs.

450 Crores. Crucially, he admitted that this consideration was received entirely in demonetised currency between November and December

2016, and that they had signed a blank MoU to effectuate this transfer.

6. In the meanwhile, the corporate debtor M/s Pa