NCLT Does Not Have Power to Examine Correctness of Attachment or Adjudication Order Passed Under Benami Act, under IBC

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Apr 28, 2026

NCLT Does Not Have Power to Examine Correctness of Attachment or Adjudication Order Passed Under Benami Act, under IBC

The SC in the case of S. Rajendran v. CIT^[1]held that an attachment Order passed under the Benami Properties Transactions Act, 1988 (‘Benami Act’) cannot be challenged under the IBC. The legality and validity of such orders can be challenged under the provisions of Benami Act alone. The SC further held that the attachment and eventual confiscation of property thereunder operates in rem and culminates in vesting of the property, free from encumbrances, to the Central Government. Thus, the National Company Law Tribunal (‘NCLT’) cannot, in exercise of insolvency jurisdiction, disregard or nullify a statutory vesting effected under another enactment.

[1] S. Rajendran v. Commissioner of Income-tax, 2026 SCC OnLine SC 298.

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