The NCLT's Kolkata Bench reaffirmed that the adjudicating body lacked the capacity to consider cases of money laundering in Rahul Carbon Commercials Private Limited v. Kohinoor Steel Pvt. Ltd., supporting the decision of the appellate authority.
In the instant case titled Rahul Carbon Commercials Private Limited v. Kohinoor Steel Pvt. Ltd., the issue raised for clarification before the NCLT Kolkata was:
Can the NCLT hear money-laundering cases that contest an earlier NCLAT ruling that rendered a negative decision in this instance under the Prevention of Money Laundering Act (PMLA), 2002? And if CIRP has already been started, may PMLA proceedings be started concurrently?
With regard to this issue, in the case of Directorate of Enforcement v. Manoj Kumar Agarwal, it was determined that no asset of the corporate debtor could be attached under PMLA while the CIRP was still in effect.
According to PMLA, the process includes attaching "proceeds of crime" and ultimately selling the confiscated property. Even under the PMLA, no specific compensation is taken into account to make up for any person who might have been harmed by an act of money laundering. There will be no compensation for the victims because the confiscated assets are sold to other people. However, the creditors of the Corporate Debtor receive direct benefits under CIRP.
The primary goal of CIRP is "to resolve the insolvency on a 'clean slate principle,' with the control of the Corporate Debtor being vested with a fresh Resolution Applicant," not "to confer any advantage to the ex-promoters of the Corporate Debtor."
"We are of the opinion that this Adjudicating Authority... is bound by the judgement of January 3, 2022, given by a three-member Bench of the NCLAT which concluded that NCLT is not entitled to deal with problems arising under the PMLA," the NCLT stated in its statement.
The NCLT Kolkata categorically stated that,
"In this order dated 3rd of January, 2022 it has been held that the Adjudicating Authority (NCLT) is not empowered to deal with matters falling under the purview of another authority under PMLA and therefore, the application filed by IRP was found to be not maintainable. It was further observed in this order dated 3rd of January, 2022 that the proper course for the aggrieved person is to approach the Appellate Authority under Prevention of Money Laundering Act, 2002 (PMLA) and according to the Enforcement Directorate this Authority was very much functional as on the date of attachment order".