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The Supreme Court on Tuesday asked the Central Government to resolve the issue of the Enforcement Directorate (ED) attaching the property brought by a fresh owner through an insolvency process while taking action against the previous owner under the Prevention of Money Laundering Act.
A bench comprising Chief Justice of India NV Ramana, Justice Krishna Murari and Justice Hima Kohli asked Solicitor General Tushar Mehta as to how can a property brought by a fresh owner be attached for the offenses under PMLA by an earlier owner?
The bench was hearing a plea against the provisional attachment order released by ED in relation to the properties of Bhushan Power and Steel.
Though in an appeal, the National Company Law Tribunal had stayed the resolution plan of the earlier owner (JSW Steel) and the attachment order of the ED, however, the ED refrained from releasing the property stating that the PMLA will prevail over IBC,
ED had argued that the property can only be released when there is an order by the Appellate Authority under PMLA.
The bench questioned Mehata as the property has been auctioned by the authorities under IBC then how can it be attached? To this, Mehta answered that there is a difference of opinion over the issue between ED and the Ministry of Corporate Affairs.
However, Mehta further informed the bench that a meeting is going to take place between the Ministries over the question of law and attempts are being made to resolve the issue.
Cause Title: Committee of Creditors Vs. Directorate of Enforcement
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