New Delhi, February 24 The Supreme Court on Tuesday upheld a decision by the NCLAT that said that attachment under the Prohibition of Benami Property Transactions Act, 1988 (Benami Act) can only be challenged before the authorities specified in that act.
A bench of justices PS Narasimha and Atul Chandurkar dismissed an appeal challenging the National Company Law Appellate Tribunal (NCLAT) judgment and imposed a cost of Rs 5 lakh each on the petitioners.
"We are of the opinion that the appellants could not have challenged the attachment order passed under the Benami Act before the statutory authorities under the Insolvency and Bankruptcy Code. We have no doubt in our mind that such invocation is not genuine and is actually intended to circumvent and obstruct the procedures contemplated under the Benami Act.
"Furthermore, filing an appeal before the NCLAT, despite the finding that the appropriate forum is not the NCLT, but the statutory authorities under the Benami Act, leaves no doubt that it is a complete abuse of the process. The appellants have taken the precious time of the NCLT, NCLAT, and this Court when the position of law is amply clear and there was no doubt whatsoever about the availability of statutory remedies under the Benami Act," the bench said.
The top court directed that the amount should be deposited with the Supreme Court Advocates on Record Association within four weeks from today.
The judgment came in response to appeals challenging the order passed by the NCLAT, Chennai bench, which refused to interfere with the decision of the National Company Law Tribunal.
The NCLAT had refused to adjudicate the applications filed by the liquidators challenging the provisional attachment orders passed by the authorities under the Prohibition of Benami Property Transactions Act, 1988, holding that the NCLT lacks jurisdiction to entertain such challenges.