No jurisdiction to go into matters governed under PMLA: HC tells tribunal
THE NEWS SCROLL06 JUNE 2020 Last Updated at 9:09 PM | SOURCE: PTI
No jurisdiction to go into matters governed under PMLA: HC tells tribunal
Chennai, June 6 (PTI): The Madras High Court has ruled that the National Company Law Tribunal(NCLT) has got no jurisdictionto go into the matters governed under the Prevention of Money Laundering Act (PMLA). Allowing a petition from the Enforcement directorate (Chennai Zone) seeking to quash an order passed by the NCLT (Hyderabad), a division bench of Justices MM Sundresh and Krishnan Ramaswamy passed the orderagainst the enforcement directorate”s attachment proceedings under the PMLA on a property. The issue pertains to three criminal cases registered by the CBI in 2016, 2017 and 2018 against Best and Crompton Engineering Project Ltd under sections 420 (cheating), 468 (forgery) and 471 (forging documents) of the IPC, among other offences, on a complaint given by a consortium of banks led by the Central Bank of India. According to the CBI, officials of the company, along with others, hatched a criminal conspiracy in Chennai and Hyderabad during 2010-2013 with the object of defrauding the consortium of the bankers. This apart, a fraudulent letter of credit and the amount sanctioned was diverted for some other purpose other than the one given for. Based on the charge sheet laid, a case of money laundering was also registered. Subsequently, the management of the company was taken over by two crony companies – Global Forgings Ltd and Tejaswini Engineering Private – through acquisition of all shares. Later, Ganga Exim Pvt Ltd and Godavari Exports & Imports Pvt Ltd were created though not in existence. Imaginary transactions were made among them. The forensic audit conducted in 2014 indicated diversion through fictitious purchases and sales. One of the transactions brought to light a transfer of Rs 125 crore in favour of Viceroy Hotels Ltd. The money is stated to be diverted by the borrower through Sujana Group Companies to various companies, including Viceroy Hotels, by adopting dubious and fraudulent means. Later, Viceroy Hotels, as a corporate debtor, moved the NCLT under the Insolvency and Bankruptcy Code (IBC). Upon knowing the order of attachment made by the enforcement directorate, the resolution professional appointed by the NCLT, filed an application challenging the attachment. It was contended that the property attached has not been purchased from the proceedings of the crime and there is an embargo under IBC for other proceedings. As the same was allowed by the NCLT, the ED moved high court with the present plea. PTI COR NVG BN WELCOME BN WELCOME
