The Supreme Court has ruled that attachment and confiscation proceedings initiated under the Prohibition of Benami Property Transactions Act, 1988 (Benami Act) cannot be challenged before the National Company Law Tribunal (NCLT) or the National Company Law Appellate Tribunal (NCLAT) under the Insolvency and Bankruptcy Code, 2016 (IBC).
The bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar while dismissing a batch of appeals led by S. Rajendran v. Deputy Commissioner of Income Tax (Benami Prohibition), the Court imposed exemplary costs of Rs. 5 lakh each on the appellants for attempting to invoke insolvency jurisdiction to question sovereign action under the Benami Act.
The case arose from proceedings initiated…