# 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-00596. 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-00596
- **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-4fba25fc

## 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 attached properties of Varrsana Ispat Limited (Corporate Debtor). The Resolution Professional filed an application before the Adjudicating Authority for releasing the attachment. The Adjudicating Authority observed that the attachment order was issued on 10th July, 2017, prior to the declaration of the moratorium. The order releasing the attachment was challenged in this appeal.

## Facts

The Directorate of Enforcement attached properties of Varrsana Ispat Limited, the Corporate Debtor. The Resolution Professional filed an application before the Adjudicating Authority (NCLT), Kolkata, seeking the release of the attached assets. The Adjudicating Authority observed that the attachment order was issued on July 10, 2017, before the moratorium was declared. The Resolution Professional argued that Section 14 of the Insolvency and Bankruptcy Code (IBC) should override the Prevention of Money Laundering Act (PMLA) during the moratorium period. The Directorate of Enforcement contended that the PMLA provisions allow for action even during the moratorium. The attachment by the Directorate of Enforcement occurred before the initiation of the Corporate Insolvency

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## Issues and analysis

### Issue 1: Whether Section 14 of the Insolvency and Bankruptcy Code, 2016 has an overriding effect on the …

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

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**Reasoning:** The court reasoned that the Prevention of Money Laundering Act, 2002, deals with

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**Interpretation:** The court interpreted that the I&B Code and the PMLA operate in different

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**Application:** The court applied this reasoning to the facts of the case, noting that the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Anil…
- **Respondents:** Varrsana Ispat…; DEPUTY DI…; +1 more
- **Other parties:** 7th Edition…; Corporate…; +4 more

## Timeline

- **2017-07-10 — Attachment…**: The Directorate of Enforcement issued an attachment order for certain assets of the…
- **2018-07-12 — Order by Adjudicating…**: The Adjudicating Authority passed an order…

## 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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