P. Eswaramoorthy v. Dy. CIT (2024) 296 Taxman 578 (SC) Editorial : P. Eswaramoorthy v. Dy. CIT( Benami Prohibition ) (2023) 150 taxmann.com 321 (NCLT – Chennai )

Prohibition of Benami Property Transactions Act, 1988,

S. 24 : Notice and attachment of property involved in benami transaction- Corporate debtor – Liquidation by NCLT – Notice of attachment – Notice is issued in SLP filed by the Liquidator . [ Insolvency And Bankruptcy Code, 2016, 60, 238 ]

Corporate debtor had been ordered for liquidation by NCLT . Respondent attached property of corporate debtor under Prohibition Benami Property Transactions Act, 1988 . Appellant-liquidator filed an application before NCLT stating that attachment of property by respondent was illegal . NCLT held that there was no conflict between two statutes as there was no bar in selling property of corporate debtor solely on ground that corporate debtor was under Liquidation, and that Liquidator was also not barred by IBC to add said property into liquidation estate . NCLT further held that liquidator was open to approach appropriate forum to raise attachment or any other relief as per provisions of Act . NCLAT  held that Prohibition of Benami Property Transactions Act, 1988, and I&B Code, 2016, operate in their own field and issues/disputes, pertaining to an attachment, effected under Prohibition of Benami Property Transactions Act, 1988, cannot be gone into, by Adjudicating Authority (Tribunal), under I&B Code, 2016 .  Further, liquidator could not bypass a remedy, provided under Benami Act in assailing order, passed by Adjudicating Authority, before Appellate Tribunal, under Prohibition of Benami Property Transactions Act, 1988 and, therefore  order passed by NCLT was free from legal infirmities.  On SLP appellant/liquidator submitted that in this case, company under liquidation was not owner of any benami property and that purchase of shares in a company under liquidation did not make company itself owner of benami property  Notice is issued in SLP filed by appellant, however, appellate proceedings shall continue in accordance with law .