Delhi High Court rules prior PMLA property attachments lapse when resolution plans clear IBC Section 32A

The Delhi High Court delivered a judgment regarding asset seizures, establishing that any attachment made prior to the approval of a resolution plan cannot remain in force once the requirements for immunity under Section 32A(2) of the IBC (Insolvency and Bankruptcy Code) are fulfilled. In insolvency proceedings, the mechanism of Section 32A shields corporate debtors and their acquired assets from past liabilities once a resolution plan is successfully approved, ensuring new managements take over clean slates.

Previously, authorities could maintain attachments under the PMLA (Prevention of Money Laundering Act), creating conflicts between commercial rescue proceedings and criminal law enforcement. Under the old position, asset freezes often persisted despite corporate rescue, whereas the new position emphasizes statutory protection to facilitate smooth business revivals. Legal practitioners and corporate advisors must review existing asset freezes and file appropriate applications to lift attachments when resolution plans receive official approval.

Professionals should monitor upcoming judicial interpretations on asset immunity boundaries and verify that all statutory immunity criteria are fully satisfied before seeking relief. Bottom line: Ensure your clients secure clean title to assets by leveraging statutory immunity provisions promptly upon resolution plan approval.