NCLT Mumbai Vacates Attachment of PNB Officers' Properties in Nirav Modi Group Fraud Case: In re Prafull Sawant
Overview
In In re Prafull Sawant (NCLT Mumbai, Bench-I), the Tribunal considered applications by two officers of Punjab National Bank (PNB), Mr. Prafull Sawant and Mr. Becchu Tiwari. They sought dismissal of the Company Petition against them and release of their attached properties. The Tribunal declined to dismiss the petition at this stage, but vacated the attachment, and CA Nos. 66 and 67 of 2021 were partly allowed.
Background
The applications, CA/66/2021 and CA/67/2021, were filed by Mr. Tiwari and Mr. Sawant, impleaded as Respondent Nos. 70 and 72 in CP/277/2018. The Company Petition invokes Sections 221, 222, 241, 242 read with Section 339 of the Companies Act, 2013. They also challenged attachment of their properties under orders dated 23.02.2018 and 04.02.2019. The latter order modified the former and extended attachment to the applicants' properties.
As recorded by the Tribunal:
- The applicants stated that the CBI had filed a charge-sheet naming them as accused in the FIR relating to the Nirav Modi and Mehul Choksi Group case.
- Mr. Sawant was suspended, then reinstated after a departmental enquiry, and serves as an officer of PNB.
- Mr. Tiwari was a Chief Manager at PNB.
- PNB, their employer, was a creditor of the group companies.
The Applicants' Case
The applicants relied on the Supreme Court's decision in Usha Ananthasubramanian v. Union of India, Civil Appeal No. 7604 of 2019, decided on 12.02.2020. According to them, it held that Sections 337 and 339 of the Companies Act, 2013 cannot be invoked against employees of a company's creditors and apply to officers of the company where the mismanagement or fraud occurred. They also cited an NCLAT order in Company Appeal No. 126 of 2019 dated 17.08.2020, which, following that judgment, set aside attachment of property of a then Executive Director of PNB.