Resolution Professional Not To Be Hauled Up In Criminal Case Against Company: Kerala High Court Stays ED Notice To RP

The plea, filed by the first petitioner (Company) and the second petitioner (Resolution Professional of the Company), seeks to quash the complaint insofar it pertains to the Resolution Professional under the Prevention of Money Laundering Act, 2002, before the Special Court.

Justice Bechu Kurian Thomas directed that the Resolution Professional was not required to appear in person before the Special Court for PMLA cases, until further orders.

“Since the 2nd petitioner is only a Resolution Professional appointed by the National Company Law Tribunal, Kochi, for the 1st petitioner, prima facie I am satisfied that 2nd petitioner cannot be hauled up in a criminal case, that too in a representative capacity as representing the 1st petitioner.”

Advocate Jaishankar V Nair took notice for the Enforcement Directorate.

The first petitioner, 'Kerala Chamber of Commerce and Industry' was arrayed as the third accused in a PMLA Case. It is a non-profitable private limited company promoting trade and industry in Kerala.

The Corporate Insolvency Resolution Process (CRIP) was initiated against the company due to a joint business venture for which a loan had been acquired, and a Resolution Professional was appointed. The second petitioner is the Resolution Professional appointed under the IB Code.

Since many criminal cases were filed against the Company and its Managing Directors including offences under PMLA, the Enforcement Directorate (ED) was also investigating it. After investigation, the ED concluded that a prima facie case was made out against the first petitioner relating to money laundering involving public money. Thus, the ED filed an Enforcement Case Information Report (ECIR) to conduct further investigation.

The ED filed the complaint before the Special Court for PMLA cases alleging that the Company committed offence of money laundering. However, the Company was arrayed as the first accused and the second petitioner who was the Resolution Professional had to represent the Company before the Special Court.

The plea has been filed for quashing the complaint insofar as it pertains to the second petitioner who is the Resolution Professional of the Company.

Advocate Akhil Suresh stated that no offence had been made and no allegations had been made against the Resolution Professional under the PMLA. It is also stated that Resolution Professional is an officer of the Court conducting the CRIP as per the IB Code and cannot be held liable for criminal cases.

It was submitted that the Resolution Professional was appointed later, that is after the money laundering allegations were made and ECIR was filed. The plea stated that if Resolution Professionals were arrayed in criminal proceedings, then they would not be able to conduct the insolvency process without fear.

Case Title: M/S Kerala Chamber Of Commerce And Industry v Directorate of Enforcement

Case Number: CRL.MC NO. 3605 OF 2024

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