IBBI Circular Requiring RPs To Approach PMLA Court For ED-Attached Assets Not Retrospective: NCLT Kolkata

The National Company Law Tribunal (NCLT) at Kolkata has held that the procedural requirements under the IBBI Circular dated November 4, 2025, which provides for approaching the PMLA Special Court for restitution of attached assets, cannot be applied retrospectively to defeat or delay the relief sought in the present application during an ongoing Corporate Insolvency Resolution Process (CIRP) of Kaizen Power.

A coram of Judicial Member Labh Singh and Technical Member Rekha Kantilal Shah observed:

“In that view of the matter, the procedural requirement as envisaged under the aforesaid Circular cannot be applied retrospectively so as to defeat or delay the relief sought in the present application, particularly when the issue pertains to custody and control of the assets of the Corporate Debtor during subsistence of CIRP.”

The ruling came in an application filed by resolution professional Santanu T Ray of Kaizen Power Ltd seeking directions against Axis Bank to remove a lien on a term deposit of about Rs 26.67 lakh and hand over its control and custody. The CIRP had been initiated on December 13, 2019, and the professional was appointed in December 2019 and confirmed in February 2020.

During the insolvency process, it was discovered that the term deposit was subjected to lien by the Income Tax Department on September 27, 2023 and later by the Enforcement Directorate on October 24, 2024, despite the subsistence of a moratorium.

The RP argued that such encumbrances violated the moratorium under Section 14, read with the mandate under Sections 17 and 25 of the Code, which require the resolution professional to take control and custody of all assets of the corporate debtor.

The tribunal held that once CIRP is in force, any attachment or lien created over assets of the corporate debtor is unsustainable in law. It further noted that the application had been filed on September 24, 2025, and reserved for orders on November 3, 2025, prior to issuance of the IBBI Circular.

In these circumstances, the tribunal ruled that the Circular could not be applied retrospectively. It directed Axis Bank's Nagpur branch to remove the lien and hand over custody of the term deposit to the resolution professional, holding that such assets must remain available for resolution under the Code.