Delhi HC Ends Dash Exports’ PMLA Attachment After Approved IBC Takeover By Qualifying Buyer, Orders Return Of ₹3.01 Crore FDR

The appellant company entered CIRP on 26 February 2020.

Asteroid Shelter Homes Private Limited’s resolution plan was approved by the CoC on 27 November 2020.

Before the NCLT approved the plan under Section 31 of the IBC on 29 September 2021, the Enforcement Directorate (ED) provisionally attached the appellant’s property under Section 5 of the PMLA on 25 August 2021.

The attachment was confirmed on 26 May 2022.

In earlier writ proceedings, the High Court permitted the appellant to challenge the attachment before the PMLA Appellate Tribunal and directed a deposit of ₹3.01 crore; the appellant thereafter appealed to the Tribunal, which dismissed the appeal.

The appellant challenged that dismissal, contending that Section 32A(2) of the IBC protected the property following approval of the resolution plan.

Section 32A(2) of the IBC bars action against a corporate debtor’s property in relation to a pre-CIRP offence where the property is covered by an approved resolution plan that results in a change of control to a person who is not within the statutory exclusions.

The Explanation expressly includes attachment, seizure, retention and confiscation within “action against the property”.

In Manish Kumar v. Union of India, the Supreme Court upheld Section 32A and explained that its protection of the corporate debtor’s property is conditional on approval of the plan, change of control and the resolution applicant’s satisfaction of the statutory criteria.

The Court also relied on Nitin Jain v. Enforcement Directorate and Rajiv Chakraborty v. Directorate of Enforcement on the fresh-start rationale and the operation of Section 32A in relation to PMLA proceedings.

It considered the Bombay High Court’s reasoning in Shiv Charan v. Adjudicating Authority under PMLA, while noting that the Supreme Court had left the legal question open in the appeal from that decision.

The Court held that Section 32A(2) is triggered by approval of a qualifying resolution plan, not by the timing of the attachment.

Accordingly, the provision applies to an existing attachment prospectively: it does not retrospectively invalidate the attachment when made, but prevents it from continuing after the statutory trigger is met.

The respondent did not dispute that the property was covered by the plan or allege that Asteroid fell within any of Section 32A’s exclusions.

The Court therefore rejected the Tribunal’s view that a Special Court finding was required; absent any such allegation, no academic finding on the exceptions was necessary.

It set aside the Tribunal’s order and directed the release to the appellant, within two weeks, of the ₹3.01 crore FDR deposited by Asteroid on the appellant’s behalf.

The appeal was allowed with no order as to costs.