# In the matter of Varrsana Ispat Ltd Through the RP of Anil Goel Vs. Deputy Director, Directorate of Enforcement CA(AT)(Insolvency) 493-2018

> NCLAT judgment dated 2019-05-02. Citation: TCN-2019-NCLAT-00595. The case involves an appeal against an order dated 12th July, 2018, passed by the…

- **Court:** NCLAT
- **Order date:** 2 May 2019
- **Citation:** TCN-2019-NCLAT-00595
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/varrsana-ispat-ltd-through-the-rp-of-anil-goel-vs-deputy-director-directorate-of-11a79c96

## Summary

### Background

The case involves an appeal against an order dated 12th July, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata. The Directorate of Enforcement had attached properties of Varrsana Ispat Limited (Corporate Debtor). The Resolution Professional filed an application before the Adjudicating Authority seeking the release of the attached assets. The Adjudicating Authority observed that the attachment order was issued on 10th July, 2017, before the declaration of moratorium. The Directorate of Enforcement's order releasing the attachment was challenged in this appeal.

## Facts

The Directorate of Enforcement attached properties belonging to Varrsana Ispat Limited, the Corporate Debtor. This attachment occurred before the declaration of a moratorium under the Insolvency and Bankruptcy Code (IBC). The Resolution Professional (RP) for Varrsana Ispat Limited filed an application before the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench) to release the attached assets. The Adjudicating Authority initially favored the RP's application. The Directorate of Enforcement appealed the Adjudicating Authority's order, arguing that the Prevention of Money Laundering Act (PMLA) allows for actions even during the moratorium period under the IBC. The RP argued that Section 14 of the IBC should have an overriding effect, preventing any

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## Issues and analysis

### Issue 1: Whether Section 14 of the Insolvency and Bankruptcy Code (I&B Code) has an overriding effect on …

**Ratio:** Section 14 of the I&B Code, which imposes a moratorium, does not apply to proceedings

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**Reasoning:** The court reasoned that the PMLA deals with 'proceeds of crime' and 'money-laundering',

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**Interpretation:** The interpretation clarifies that the moratorium under the I&B Code is

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**Application:** The court applied this principle to the case, stating that the attachment of

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Anil…
- **Respondents:** Varrsana Ispat…; DEPUTY DI…
- **Advocates:** Sumant…; Udit Prakash…; +5 more

## Timeline

- **2017-07-10 — Attachment…**: Attachment order issued by…
- **2018-07-12 — Order Da…**: Order passed by the Adjudicating…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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