Swarnmala Jewellers vs Gajesh Labchand Jain

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Comp. App. (AT) (Ins) No. 170 of 2024 & I.A. No. 547 of 2024

IN THE MATTER OF: Gajesh Labhchand Jain ...Appellants

Versus

Economic Offences Wing, Mumbai & Ors. ...Respondent Present: For Appellants :Mr. Bishwajit Duby, Somesh Srivastava, Ramakant Rai, Trilegal, Adv. For Respondent : Mr. Smriti Chriwal, Jaiveer Kant, Hardik Khatri, Adv. for R2 to 5 Ms. Swetal Sheptal, Adv. for R1 With Comp. App. (AT) (Ins) No. 698 of 2024 & I.A. No. 2494, 2495, 4581 of 2024 IN THE MATTER OF: Swarnamala Jewellers ...Appellants

Versus

Gajesh Labchand Jain ...Respondents Present: For Appellants : Mr. Aniruddha Deshmukh, Adv. For Respondent : Mr. Bishwajit Duby, Somesh Srivastava, Ramakant Rai, Trilegal, Adv. ORDER

Per: Justice Rakesh Kumar Jain (Oral)

06.08.2024: This order shall dispose of two appeals i.e. CA (AT)

(Ins) No. 170 of 2024 (hereinafter referred to as the first appeal)

and CA (AT) (Ins) No. 698 of 2024 (hereinafter referred to as the

second appeal).

2. The first appeal is directed against the order dated

29.11.2023 by which an application filed by the Appellant

(Liquidator) bearing I.A. No. 2489 of 2023 under Sections 35, 36 &

238 of the IBC, 2016 (in short 'Code') seeking a direction to lift the

attachment of the assets of the Corporate Debtor and deposits with

the City Civil and Sessions Court, Mumbai under the Maharashtra

Protection of Interest of Depositors (In Financial Establishments)

Act, 1999 (in short 'Act'), has been dismissed.

3. The second appeal is directed against the order dated

29.01.2024 by which an application bearing I.A. No. 274 of 2024

filed by the Successful Bidder in the E-auction for the sale of

property of the CD and to direct the liquidator to restrain from

distribution of Rs. 24 Cr. (Mentioned in the order dated 29.01.2024

but Rs. 25 Cr. submitted by the Appellant in court), the amount

paid by the Applicant towards the purchase of the property, has

been dismissed.

3. Shorn of unnecessary details, as many as 15 properties of the

Corporate Debtor (Rasiklal Sankalchand Jewellers Pvt. Ltd.) were

sized by Respondent No. 1 (Economic Offences Wing, Mumbai)

under the provisions of the Act.

4. The Appellant was informed by Respondent No. 1 that there

are 150 investors who have been deprived of an amount of Rs. 11 Cr. The detail of the properties seized, mentioned in the letter dated

22.05.2023, are as under: -

5. The Appellant issued a letter of intent (LOI) about part of the

property (mentioned in serial no. 4 hereinabove) to Swarnamala

Jewellers for consideration of Rs. 25 Cr. The amount of Rs. 25 Cr.

lying deposited with the Appellant.

6. The Appellant filed an application bearing no. 669 of 2023

and the Auction purchaser also filed an application bearing no. 44

of 2024 to be impleaded in the proceedings pending before the

Designated Court under the Act before the City Civil & Session

Court, Mumbai where the MPID Special case was pending. The

application was filed for cancellation of attachment of the property

of the CD, namely, shop situated at Building known as Skyline

Status, Ground Floor, Opp. Pooja Hotel, MG Road, Ghatkopar

East, Mumbai 400 077 bearing Survey No. 225, Hissa No. 12 and

CTS No. 555 to 5560 revenue village, Ghatkopar - Kirol, Taluka -

Kulra, Mumbai.

7. The Appellant in the first appeal filed the present application

no. 2489 of 2023 before the Tribunal for lifting the attachment

order. In the second appeal, auction purchaser also filed I.A. No.

274 of 2024 for the same purpose.

8. The Tribunal dismissed the application bearing no. 2489 of

2023 of the appellant on 29.11.2023 with the following

observations: -

"Heard the counsel for the applicant/liquidator and the representative of the respondent. This bench is of the considered opinion that the court under MPID Act is established under the special enactment to adjudicate the crimes committed and comes under purview of the EOW. Therefore, this Tribunal has no jurisdiction to pass order for lifting of attachment by the respondent, for which, the case is pending adjudication before the special court and the applicant has already approached the said special court (MPID court) for impleading him as a party in that proceeding. At this stage, this Tribunal has no jurisdiction to interfere into the adjudication of that special court for lifting the attachment made by the EOW."

9. I.A. No. 274 of 2024 was also dismissed on 29.01.2024 on the

basis of the order passed on 29.11.2023.

10. Aggrieved against both the orders dated 29.11.2023 and

29.01.2024 the aforesaid appeals i.e. CA (AT) (Ins) No. 170 of 2024

filed by the Appellant and CA (AT) (Ins) No. 698 of 2024 is filed by

the auction purchaser.

11. While arguing the first appeal, Mr. Bishwajit Dube, Counsel

appearing on behalf of the Appellant has submitted that the Ld.

Special Court has rejected the application no. 44 of 2024 on the

ground that the property in question, mentioned hereinabove, also

in the said application, has not been attached by way of an official gazette by the State Govt. which is required under Section 4 of the

Act, therefore, the application filed by the Appellant was found to

be premature, however, liberty was granted to the Appellant to file

fresh application as and when a right accrues to them in case any

order is passed under Section 4 r/w Section 7 of the Act.

12. On the last date of hearing, we had asked Counsel for

Respondent No. 1 to provide the details as to whether the other 14

properties have been attached by the issuance of a notification or

not. There is no categoric answer to this question but we have

found that the application of the Appellant bearing no. 2489 of

2023 has simply been dismissed on the ground that since the

matter is pending before the Special Court, therefore, the Tribunal

has not having the jurisdiction to deal with the application but

since, the Special Court in the application filed by the Appellant in

the first appeal, bearing no. 44 of 2024 was held to be premature

because notification under Section 4 was not published in respect

of property mentioned in the order, therefore, the Appellant was

not required to be impleaded as a party in that case for seeking

vacation of the order. In that view of the matter, the Tribunal now

has the jurisdiction to at least deal with the said property. The

second question would thus arise as to whether other 14

properties about which the Appellant has preferred this appeal

also can be dealt with by this Court in its Appellate Jurisdiction. The answer to this question is in negative because the Appellant is

required to file similar application before the Special Court

constituted under the Act for obtaining order as to whether there

is any order of publication of notification in respect of those

properties as well.

13. Thus, in view of the aforesaid facts and circumstances, we

are of the considered opinion that at present there is nothing in

this appeal for adjudication by this Court as the Appellant has the

remedy to approach the Tribunal for an order as has been passed

by the Special Court under the Act on 19.06.2024.

14. It is needless to mention that it shall be open for the Appellant

to file an appropriate application before the Special Court under

the Act for taking an order as to whether the other properties

mentioned by Respondent No. 1 in its letter addressed to it,

mentioned hereinabove, have also been attached or any

publication has been issued by the State Govt. or not.

15. In the second appeal, the appellant/auction purchaser shall

also have the same liberty to file similar application before the

Specific Court constituted under the Act and in case the properties

are not lying attached in terms of Section 4 of the Act, they are free

to file an appropriate application before the Tribunal for passing

an appropriate order.

16. With these observations, both the appeal are hereby disposed

of, however, the Appellant is hereby directed not to disburse the

amount of Rs. 25 Cr. deposited by the auction purchaser for the

purpose of purchasing the property in question which is

mentioned in the order passed by the Special Court till a final

decision is taken.

17. If any such application is filed then the Tribunal shall decide

the application as early as possible.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

Sheetal/Ravi