NCLT Hyderabad Says It Cannot Order Release Of ED-Attached Assets, Directs Liquidator To PMLA Tribuna

The National Company Law Tribunal (NCLT), Hyderabad Bench, has held that it is not the appropriate forum to direct the release of assets attached by the Enforcement Directorate (ED) in the liquidation of MBS Impex Private Limited.

The tribunal left the Liquidator to pursue the remedy available before the PMLA Appellate Tribunal, where his appeal seeking release of the assets was already pending.

“Therefore, we are of the considered opinion that this Tribunal is not the appropriate forum for directing release of the Schedule Assets, or the documents relating thereto, from the attachment imposed by the Enforcement Directorate,” a Bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri observed.

It added that the Liquidator was at liberty to pursue such remedy as may be available in law before the PMLA Appellate Tribunal.

The order was passed on September 7 while partly allowing an application filed by Liquidator Santosh Bhatia under Section 60(5) read with Section 35 of the Insolvency and Bankruptcy Code, 2016 (IBC). Section 60(5) allows the NCLT to decide questions arising out of or in relation to insolvency or liquidation proceedings, while Section 35 sets out the liquidator's statutory powers and duties.

Bhatia had sought possession of and documents relating to 10 land assets belonging to MBS Impex. The properties were secured in favour of different financial creditors and were also attached by the ED.

The tribunal found that none of the secured creditors had intimated an intention to relinquish their security interest within the period prescribed under the liquidation regulations. They also did not realise their security within the 180 days thereafter. The assets consequently became part of the liquidation estate.

The Liquidator had challenged the ED attachment before the Delhi High Court. Following the High Court's directions, he approached the PMLA Appellate Tribunal with an appeal seeking release of the land assets, which was pending when the NCLT considered the application.

The NCLT also referred to an IBBI circular dated November 4, 2025. It provides that an insolvency professional may approach the Special court constituted under the PMLA under Sections 8(7) or 8(8) for restitution of assets attached by the ED.

The tribunal therefore declined to direct release of the attached land assets or the documents relating to them. It left Bhatia at liberty to pursue the remedy available in law before the PMLA Appellate Tribunal.

Separately, the tribunal ordered the erstwhile management of Shreemukh Gold Private Limited and Naidu Prakash to hand over inventory belonging to MBS Impex. It comprised 131.063 kg of gold, 6,281.99 carats of diamonds/gemstones and 2,933.09 kg of silver articles.

Shreemukh Gold had confirmed possession of the inventory in August 2023 and sought time until December 2023 to hand it over, but failed to meet the deadline.

The tribunal ultimately declared the inaction of Shreemukh Gold and Naidu Prakash in handing over the inventory “illegal, unjust and unlawful”.

It directed the erstwhile management of Shreemukh Gold and Naidu Prakash to hand over the gold, diamonds/gemstones and silver articles to the Liquidator.