The petitioners, Malay Archipelago Enterprise Thro had prayed to vacate the Provisional Attachment Order gone by the Deputy Director, Mumbai Zonal Office-II, Directorate of Enforcement, under sub-Section (1) of Section 5 of the Prevention of cash Laundering Act, 2002 whereby, the movable properties, i.e. commercial vehicles of M/s. Siddhi Vinayak Logistic Limited (Corporate Debtor), are provisionally attached under the provisions of the PMLA for 180 days from the date of the order with the further condition that the said properties shall not be removed, parted with or otherwise, addressed, without the prior permission from the said authority.
Ms Kruti M. Shah, the counsel for the petitioners prayed to issue appropriate directions to the respondent, Regional Transport Offices to finish the procedure of transfer of the vehicles purchased by the petitioners from the Court-appointed Official Liquidator of the company Debtor.
Ms Shah submitted that the petitioners aren't connected with the proceedings initiated against the corporate in Liquidation, M/s. Siddhi Vinayak Logistic Limited in any manner whatsoever. The petitioners had purchased the topic vehicles within the E-auction proceedings conducted by the respondent, Official Liquidator in pursuance of the order going by the NCLT.
The single-judge bench of Justice Gita Gopi the dues relatable to the vehicles belonging to the company Debtor can only be recovered under the provisions of the IB Code, i.e. the waterfall mechanism under Section 53 of the IB Code and not from the petitioners, being the auction- purchasers. The petitioners might be held susceptible to pay statutory dues in respect of the topic vehicles, which are claimed by the respondent, Regional Transport Offices after their purchase by the petitioners in April 2019, only from the date once they had purchased the topic vehicles after having exercised their right to boost objections to such claim.
The Court directed the petitioners to form payment of the statutory dues from the date of purchase of the topic vehicles by the petitioners, which might be made subject to other proceedings about the said vehicles since the petitioners, being the auction purchasers, couldn't be asked to form payment of the statutory dues claimed against the company Debtor in liquidation in respect of vehicles before their date of purchase by the petitioners.