Property Attached under Benami Act cannot be challenged before NCLT/NCLAT : Supreme Court

The Supreme Court held that NCLT & NCLAT lack jurisdiction to look into the legality of properties attached under the Prevention of Benami Property Transactions Act,1988, even if such properties are involved in Insolvency proceedings.

The court emphasised that the Benami Act is a special law that supersedes the Insolvency and Bankruptcy Code, 2016.

The case involved two corporate debtors whose properties were attached. The NCLT and NCLAT dismissed the challenges to these attachments, stating that appropriate legal remedies exist under the Benami Act. The Supreme Court upheld their decisions & dismissed appeals with costs of Rs. 5 Lakhs.

[S Rajendran v. Deputy Commissioner of Income Tax (Benami Prohibition) and ors.]