The Delhi High Court on Friday held that a property attached by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) can be released from attachment after approval of a resolution plan under the Insolvency and Bankruptcy Code (IBC), even if the attachment order predates the approval.

However, the protection applies only if the person taking over the corporate debtor is not a promoter or part of its previous management, is not a related party, and meets the other conditions under section 32A of IBC.

A division bench of Justice Navin Chawla and Justice Arun Bhardwaj set aside the PMLA Appellate Tribunal's August 12, 2025 order dismissing Dash Exports Private Limited's appeal against the attachment.

The bench held that Section 32A does not retrospectively invalidate an earlier attachment order. Instead, it operates prospectively to release the property from attachment once the resolution plan is approved and the statutory conditions are met.

"The above interpretation to Section 32A of the IBC does not place the IBC in conflict with the provisions of the PMLA nor does it make the provisions of Section 32A of the IBC to operate retrospectively to annul the attachment order passed prior to the approval of the resolution plan, but applies prospectively to release the property from such attachment," the court held.

Dash Exports' corporate insolvency resolution process commenced on February 26, 2020. A resolution plan submitted by Asteroid Shelter Homes Private Limited was approved by 99.22% of Dash Exports' Committee of Creditors (CoC) on November 27, 2020. The National Company Law Tribunal (NCLT) approved the plan on September 29, 2021, after finding that Asteroid had complied with Section 30(2) and was not disqualified under Section 29A of the IBC.

Before the NCLT could pronounce its approval order, the ED provisionally attached Dash Exports' property at Village Habibpur in Gautam Buddh Nagar, Uttar Pradesh, on August 25, 2021. The Adjudicating Authority confirmed the attachment on May 26, 2022.

In April 2023, the High Court disposed of a writ petition filed by Dash Exports and Asteroid, permitting them to challenge the provisional attachment and its confirmation before the PMLA Appellate Tribunal. It directed Asteroid to deposit ₹3.01 crore through a fixed deposit receipt (FDR) in favour of the ED. The tribunal subsequently dismissed Dash Exports' appeal.

The High Court rejected the tribunal's view that Section 32A(2) applies only to attachment orders passed after approval of a resolution plan. It held that the trigger for the provision is approval of the plan under Section 31. Once the plan is approved and management and control of the corporate debtor pass to a third party satisfying the statutory conditions, the property must be free from encumbrances, including an attachment under the PMLA.

The bench noted that the ED had not disputed that the attached property was covered by the approved resolution plan or that the plan resulted in a change in control of Dash Exports. Nor had the agency alleged that Asteroid was a promoter, was part of the corporate debtor's management or control, or was a related party of such a person.

The ED had also not alleged that the investigating authority had reason to believe, on the basis of material in its possession, that Asteroid had abetted or conspired in the commission of the offence and had filed a report or complaint against it before the relevant authority or court.

The court further rejected the tribunal's view that a Special Court must first declare that Asteroid did not fall within the exceptions under Section 32A before the property could be released. It held that such a finding would be necessary only if the ED alleged that Asteroid fell within one of those exceptions. In the absence of such an allegation, the Special Court was not required to give an academic finding on the issue.

"The observation of the learned Tribunal in its impugned order that the relief under Section 32A of the IBC cannot be given to the appellant until the Special Court gives a finding to the effect that the appellant/Asteroid is not covered by the exceptions stipulated in Section 32A of the IBC, cannot be sustained for the reason that the occasion for the Special Court to give such finding shall arise only if it was a case of the respondent that the appellant/Asteroid falls in any of the exceptions to Section 32A of the IBC. In the absence of any such case being even set up by the respondent, the Special Court is not to give an academic finding or a finding in vacuum. On the other hand, it has to be presumed that the respondent has conceded that the appellant otherwise satisfies all the conditions mentioned in Section 32A of the IBC for the relief contained therein," the court held.

The bench allowed Dash Exports' appeal and directed that the ₹3.01 crore FDR deposited by Asteroid on its behalf be released to Dash Exports within two weeks.

For Appellant: Senior Advocate Sanjay Jain with Advocates Abhijit Mittal, Anukalp Jain, Harshita Sukhija, Rishika Agrawal, Ankita Bhattacharjee and Niharika Sinha

For Respondent (ED): Advocate Rajat Nair 

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Case Title :  DASH EXPORTS PRIVATE LIMITED vs DIRECTORATE OF ENFORCEMENTCase Number :  MISC. APPEAL(PMLA) 4/2026CITATION :  2026 LLBiz HC (DEL) 1211
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