# In the matter of Padmaadevi Sugars Limited MA(IBC)-05(CHE)-2020 & IA(IBC)-599(CHE)-2021 in CP(IB)-768(CHE)-2018

> NCLT judgment dated 2022-04-25. Citation: TCN-2022-NCLT-03102. The case involves two applications, MA(IBC)/05(CHE)/2020 and IA(IBC)/599(CHE)/2021, related to…

- **Court:** NCLT
- **Order date:** 25 Apr 2022
- **Citation:** TCN-2022-NCLT-03102
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/padmaadevi-sugars-limited-maibc-05che-2020-iaibc-599che-2021-in-cpib-768che-2018-0a8fe44e

## Summary

### Background

The case involves two applications, MA(IBC)/05(CHE)/2020 and IA(IBC)/599(CHE)/2021, related to the Corporate Insolvency Resolution Process (CIRP) of M/s. Padmaadevi Sugars Ltd. MA(IBC)/05(CHE)/2020 was filed by the Resolution Professional seeking to raise an order of attachment dated 01.11.2019 passed by the Deputy Commissioner of Income Tax (Benami Prohibition) and to direct Respondents 2-4 to deposit Rs. 386 Crores received from alienating the Corporate Debtor's property. IA(IBC)/599(CHE)/2021 was filed by the Liquidator seeking a stay on the same attachment order to enable the liquidation process.

## Facts

The Corporate Debtor, M/s. Padmaadevi Sugars Ltd., underwent CIRP initiated by Bank of India. An order dated 15.10.2018 initiated the CIRP, and the immovable property was handed over to the Resolution Professional on 29.10.2018. A provisional attachment order and show cause notice dated 01.11.2019 were issued by the Deputy Commissioner of Income Tax (Benami Prohibition) under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988, regarding the Corporate Debtor's property. Investigations revealed incriminating documents and loose sheets related to Ms. V.K. Sasikala and others, indicating a potential benami transaction. An amount of Rs. 386 Crore was allegedly paid for the purchase of the Corporate Debtor's immovable property during demonetization,

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the jurisdiction to revoke the provisional attachment order …

**Ratio:** The jurisdiction of the NCLT under Section 60(5) of the IBC is broad but not unlimited.

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**Reasoning:** The court relied on the Supreme Court's judgment in Embassy Property Developments Pvt.

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**Interpretation:** Section 60(5) of the IBC provides the NCLT with broad powers to address legal

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**Application:** In this case, the court found that the Prohibition of Benami Transactions Act,

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** Shri. Mudapallur…
- **Respondents:** M/s. Padmaadevi…; THE DEPUTY…

## Timeline

- **2018-10-15 — Order for CIRP…**: Order passed initiating the Corporate Insolvency Resolution Process (CIRP) against M/s.…
- **2018-10-29 — Property Ha…**: Immovable property, machinery, and equipment…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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