# 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-03088. 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-03088
- **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-2018-96e7a02b

## 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. The Resolution Professional (RP) filed MA(IBC)/05(CHE)/2020 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 to stay the attachment order to enable the liquidation process. The Corporate Debtor was admitted into CIRP on 15.10.2018, initiated by Bank of India. A provisional attachment order and show cause notice were issued on 01.11.2019 under the

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## Facts

The Corporate Debtor, M/s. Padmaadevi Sugars Ltd., was admitted into CIRP on 15.10.2018 based on an application filed by Bank of India. The Resolution Professional (RP) was appointed. Subsequently, the Corporate Debtor received a provisional attachment order and show cause notice dated 01.11.2019 from the Deputy Commissioner of Income Tax (Benami Prohibition) under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988. This order restrained the Corporate Debtor from transferring or charging its immovable property. The Income Tax Department initiated investigations against Ms. V.K. Sasikala and others, alleging benami transactions. The investigation revealed that Rs. 386 Crores was paid during demonetization for the purchase of the Corporate

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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 extends to questions of law

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**Reasoning:** The Adjudicating Authority considered the Supreme Court's judgment in Embassy Property

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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 Adjudicating Authority determined that it should not exercise

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** Shri. Mudapallur…
- **Respondents:** M/s. Padmaadevi…; THE DEPUTY…
- **Advocates:** S. Sathiyanarayana…; R.Sankarana…; +2 more

## Timeline

- **2018-10-15 — CIRP Comm…**: Corporate Insolvency Resolution Process (CIRP)…
- **2018-10-29 — Property Hand…**: 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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