Can ED issue provisional attachment order under PMLA when moratorium under IBC is in force? Supreme Court to consider

The Supreme Court last week sought a response from the Enforcement Directorate (ED) in a petition challenging an order of the National Company Law Appellate Tribunal (NCLAT) stating that the NCLT was not empowered to deal with matters falling under the Prevention of Money Laundering (PMLA) Act [Ashok Kumar Sarawagi v. ED]..A Bench of Chief Justice of India (CJI) UU Lalit and Justice Bela M Trivedi stayed the order of the NCLAT till the appeal was decided and listed the case for further hearing on November 21.“Pending further consideration there shall be ad interim relief in the nature of status quo to be maintained by both the parties with respect to the proceedings in question,” reads the order..The petitioners challenged the NCLAT order that placed reliance on the decision in the case of Kiran Shah v. Enforcement Directorate Company Appeal, stating that it left certain issues unanswered..In the case at hand, the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor in November 2019, and was scheduled to expire in March 2021.The petitioner, in October 2021, received a communication from the ED intimating a PMLA investigation against the corporate debtor and its directors.Despite issuing a response calling upon the ED to refrain from taking any steps till the conclusion of the pending CIRP, the petitioner received a provisional attachment order. The NCLT and NCLAT both dismissed the petitioner’s challenge against this order.Aggrieved by this decision, the petitioner moved the apex court..The plea states that the decision in the case of Kiran Shah has not considered that CIRP is a time-bound process and cannot be kept in limbo indefinitely to await the final outcome of PMLA proceedings. “Because the Ld. Tribunals have failed to appreciate that effect of the attachment order is that the CIRP cannot continue," the petitioner argued.Further, it was argued that the present case was distinguishable from the Kiran Shah case, given that the provisional attachment order was passed after initiation of proceedings under the Insolvency and Bankruptcy Code, 2016..Moreover, it contended that there is no adjudication in the case yet, and despite this, the properties of the corporate debtor have been attached as proceeds of crime..Additionally, in case of conflict, provisions of the Insolvency & Bankruptcy Code (IBC) would prevail over the PMLA, it was stated.“The Ld. Tribunals have failed to appreciate that the Code predates the PMLA and thus, in the event of conflict between PMLA and the Code, the provisions of the Code ought to prevail.”.The petitioners also highlighted a judgment of the top court upholding the validity of Section 32A of the IBC, which stated that jurisdiction under the PMLA is legislatively mandated to cease once a resolution plan gets approved..Therefore, the plea sought a direction from the Court allowing the petitioner to conclude the CIRP as per the IBC..Senior Advocate Dhruv Mehta and Advocates Tishampati Sen, Riddhi Sancheti, Anurag Anand and Anupama Dhurve appeared for the petitioners..[Read Order]