Insolvency Proceedings Can Not Sidestep PMLA Process: NCLT

Proceedings under the Insolvency & Bankruptcy Code cannot be used as a mechanism to "frustrate or sidestep" the process going under the Prevention of Money Laundering Act, the National Company Law Tribunal (NCLT) said.

- Press Trust Of India

Rejecting the plea for dissolution of Shakti Bhog Snacks, which is under the lens of the Enforcement Directorate (ED) with a special PMLA Court taking cognisance of the complaint filed by the probe agency, NCLT said it "would amount to judicial overreach”.

This will also “impair the ED’s ability to complete its investigation, pursue trial, and recover proceeds of crime," said NCLT while dismissing the plea of the Resolution Professional of Shakti Bhog Snacks.

A two-member NCLT bench further said the Supreme Court has already held that NCLT and the appellate tribunal NCLAT do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution.