Sections 32A and 33(5) of IBC overrides Sections 5 & 8 of PMLA & – Attachment of auctioned property under liquidation under PMLA is illegal

Sections 32A, 33(5) & 238 of IBC overrides Sections 5 & 8 of PMLA & – Attachment of auctioned property under liquidation under PMLA is illegal

As per the application of ICICI Bank, on 1.8.2017 the CIRP was initiated against ABG Shipyard by the NCLT.

As per the order dated 25.4.2019 of the NCLT the respondent no.2 ABG Shipyard Limited is under liquidation and the Liquidator was appointed.

By the order dated 2.12.2020, the liquidator was permitted to sell assets through private sale.   The advertisements were issued on various dates as per law.

The writ applicant had given highest bid of Rs.189.50 crores and had purchased the land of the respondent no.2 in auction as successful bidder, remitted Rs.68.22 crores and agreement to sell dated 21.3.2022 was executed and registered on the same day.  On 25.8.2022, an amount of Rs.18.95 crores was remitted.

However, by the order dated 21.9.2022, the subject land was provisionally attached under Section 5 of PMLA against ABG Shipyard.  Pending the petition challenging the legality of the order dated 21.9.2022, the final order dated 14.3.2023 under Section 8 of PMLA confirming the provisional attachment was passed.

However, the writ applicant was neither a promoter or manager or related party of  CD – ABG Shipyard.  It is a bona fide purchaser.

Judgment dated 24.8.2023 in R/Special Civil Application No.808 of 2023 of in AM Mining India Pvt Ltd Vs. Union of India and others