The Hon’ble Supreme Court in the captioned judgment held that the NCLAT erred in entertaining and allowing JSW Steel’s appeal, as JSW, whose resolution plan was already approved, was not an “aggrieved person” under Section 61 of the Code. The Hon’ble Apex Court also found that the mandatory compliance regarding Section 29A and Form H certification was not duly followed by the Resolution Professional. Further, more than 2 years had elapsed and the Resolution Plan was not implemented. Hence, the Hon’ble Apex Court set aside the orders of NCLT and NCLAT approving the Resolution Plan.
Furthermore, the Hon’ble Supreme Court held that the NCLT and NCLAT lack the jurisdiction to interfere with attachment orders passed by the Enforcement Directorate (“ED”) under the Prevention of Money Laundering Act, 2002 (“PMLA”), the same being in the domain of Public Law.
The Supreme Court in the captioned matter addressed two key issues arising from a Rs. 5600 Crores fraud at NSEL’s commodity exchange platform. First, it held that secured creditors under the SARFAESI Act and RDB Act do not have priority over assets attached under the PMLA and Maharashtra Protection of Interest of Depositors (MPID) Act, 1999, as the latter’s provisions override due to their focus on protecting defrauded depositors. Second, properties attached under the MPID Act before the IBC Moratorium (Section 14) are vested in the Competent Authority and remain available for decree execution by the Supreme Court Committee, unaffected by IBC proceedings. The Court upheld the MPID Act’s constitution validity, emphasising its distinct legislative domain under State List entries.
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