PMLA - The Legal Chamber

Supreme Court on PMLA: Statutory Appeal Must Be Exhausted Before Seeking Quashing, Rules in JSW Case

1Dec

By The Legal ChamberNo Comments

Supreme Court

Supreme Court on PMLA: Statutory Appeal Must Be Exhausted Before Seeking Quashing, Rules in JSW Case

The Supreme Court declined to quash the PMLA proceedings, holding that the statutory appellate mechanism under the Act must be exhausted first. The Court emphasized that the Appellate Tribunal is the appropriate forum to determine whether the attached property constitutes "proceeds of crime" and if its withdrawal violated the law, thereby refusing to exercise its extraordinary jurisdiction at this stage. Facts Of The Case: JSW Steel Limited entered into a contract with Obulapuram Mining Company (OMC) for the supply of iron ore, making an advance payment. After OMC and its associates, including Ananthpur Mining Corporation (AMC), partially supplied the ore, they failed to complete the supply. JSW initiated arbitration, which resulted in an award directing a refund of the outstanding b...

Landmark Ruling: Supreme Court Backs Creditors & JSW, Shuts Door on Promoter Interference

22Nov

By The Legal ChamberNo Comments

Supreme Court

Landmark Ruling: Supreme Court Backs Creditors & JSW, Shuts Door on Promoter Interference

This Supreme Court judgment reinforces the finality and binding nature of an approved resolution plan under the IBC. It held that claims not part of the Request for Resolution Plan (RfRP) or the final plan are extinguished, preventing "hydra-headed" post-approval claims. The commercial wisdom of the Committee of Creditors (CoC) in approving the plan is paramount and not open to judicial review on merits. Facts Of The Case: The case originated from the Corporate Insolvency Resolution Process (CIRP) of Bhushan Power and Steel Limited (BPSL), initiated in 2017. JSW Steel Limited was selected as the Successful Resolution Applicant (SRA), and its resolution plan was approved by the Committee of Creditors (CoC) and later by the National Company Law Tribunal (NCLT) in September 2019. However,...

Supreme Court Slashes NGT’s ₹50 Crore Fine, Rules Turnover Can’t Dictate Environmental Penalty

25Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Slashes NGT’s ₹50 Crore Fine, Rules Turnover Can’t Dictate Environmental Penalty

In this judgment, the Supreme Court curtailed the National Green Tribunal's (NGT) powers, ruling that environmental compensation cannot be arbitrarily linked to a polluter's turnover, lacking a direct nexus to the actual damage. It also held that the NGT lacks jurisdiction to direct investigations by the Enforcement Directorate under the PMLA, affirming that such actions require a scheduled offence to be registered. The Court emphasized that penalties must be determined based on established methodologies and legal principles, not rhetoric. Facts Of The Case: The case originated from a Public Interest Litigation (PIL) filed by Adil Ansari before the National Green Tribunal (NGT) in 2019 against M/s C.L. Gupta Export Ltd. The allegations were that the company, an exporter of handicraft ite...

Supreme Court Says Depositors First, Banks Later in NSEL Scam Case: MPID Act Overrides SARFAESI

24May

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Says Depositors First, Banks Later in NSEL Scam Case: MPID Act Overrides SARFAESI

The Supreme Court ruled that the Maharashtra Protection of Investors and Depositors (MPID) Act 1999 prevails over the SARFAESI Act, 2002 and Recovery of Debts Act 1993, denying secured creditors priority over assets attached under MPID. It also held that properties attached under MPID remain outside IBC moratorium, ensuring depositor claims take precedence over insolvency proceedings. The judgment reaffirms state legislative competence under List-II (State List) and upholds federalism by preventing central laws from overriding state-enacted investor protection measures. Facts Of The Case: The case arose from the 2013 National Spot Exchange Limited (NSEL) scam, where around 13,000 investors lost approximately ₹5,600 crores due to payment defaults by trading members. NSEL, a commodit...