Quick answer: Under Section 32A IBC, a PMLA attachment of the corporate debtor’s property ends once the NCLT approves a resolution plan that hands control to an unconnected buyer. In November 2026 the Delhi High Court held that this applies even to attachments made before approval. The Supreme Court has not yet settled the issue.
Banks and NBFCs often find that the most valuable asset of a stressed borrower sits under an Enforcement Directorate (ED) order. So, does a Section 32A IBC PMLA attachment survive once the NCLT approves a resolution plan? This guide explains the law, the latest rulings and the steps creditors should take.
Section 32A IBC PMLA Attachment: What the Law Says
Parliament added Section 32A in 2019 to give buyers a clean slate. It works in three parts:
- Section 32A(1): the corporate debtor’s liability for offences committed before the CIRP ends once the NCLT approves the plan.
- Section 32A(2): authorities cannot take action, including attachment, seizure or confiscation, against property covered by the approved plan.
- Section 32A(3): the corporate debtor and its officers must still help investigators.
The protection has conditions. Control must pass to a new owner. That owner must not be a promoter, a related party or a person who abetted the offence. Former directors and promoters stay personally liable. The Supreme Court upheld the provision in Manish Kumar v. Union of India (2021).
Key Case Law on Section 32A and ED Attachment
Courts and tribunals have mostly sided with resolution applicants. However, the final word still rests with the Supreme Court.
- Dash Exports v. Directorate of Enforcement (Delhi HC, 6 November 2026): ED attached the property before the NCLT approved the plan. The PMLA Appellate Tribunal held that Section 32A did not reach such an attachment. The Division Bench disagreed and found no basis for treating earlier attachments differently. It ordered the release of a ₹3.01 crore FDR held for ED.
- Viceroy Hotels v. ED (PMLA Appellate Tribunal, April 2026): the Tribunal reportedly set aside an attachment of over ₹315 crore after an approved plan changed control.
- Vantage Point Asset Management v. Gaurav Misra (NCLAT, 14 October 2025): the attachment stopped working from the date of plan approval. The buyer did not need a separate order from PMLA authorities.
- Shiv Charan (Bombay HC, 2024): the attachment ended by operation of law. The NCLT could direct ED to communicate the release.
- Bhushan Power and Steel (Supreme Court, 26 September 2025): a three-judge bench upheld JSW Steel’s plan but left the Section 32A question open.
In short, the trend favours a clean slate. Still, ED has carried several of these rulings to the Supreme Court, so lenders should plan for some delay.
Does the IBC Amendment Act, 2026 Change Section 32A?
On the sources we reviewed, no. The 2026 Act puts the clean-slate rule from Ghanashyam Mishra into the Code. Claims left out of an approved plan stand extinguished, while claims against guarantors survive. It also adds a 30-day deadline for the NCLT to decide a plan. However, the Act does not appear to rewrite Section 32A itself.
Checklist for Banks and NBFCs
Lenders on the committee of creditors can protect value with these steps:
- Map every attachment early. List all ED, CBI and tax orders on the debtor’s assets in the information memorandum.
- Test the bidder’s eligibility. Check for any link to promoters or related parties, because that link removes Section 32A protection.
- Draft the plan with care. Name the attached assets and seek specific Section 32A reliefs in the plan.
- Use the NCLT. After approval, apply under Section 60(5) for directions to ED, as the Bombay High Court allowed.
- Consider restitution. In appropriate cases, ask the Special Court to restore assets under Section 8(8) PMLA.
- Keep personal claims alive. Pursue guarantors and former promoters separately, since Section 32A does not protect them.
For a step-by-step view of how the NCLT approves a plan, read our guide on the resolution plan approval process under IBC. Our IBC and NCLT lawyers in Delhi regularly handle such applications.
FAQs on Section 32A IBC
Does Section 32A IBC override PMLA?
After the NCLT approves a qualifying plan, Section 32A bars attachment of the debtor’s property. High Courts and the NCLAT apply it over PMLA, but the Supreme Court has not yet settled the question.
Does an ED attachment made before plan approval end?
Yes, according to the Delhi High Court in Dash Exports (2026). The court released the property once control passed to an eligible buyer.
Who cannot claim Section 32A protection?
Promoters, related parties and persons who abetted or conspired in the offence cannot claim it. The ED must still show material supporting such a link.
Does the buyer need a release order from ED?
The NCLAT said no in Vantage Point (2025). In practice, buyers often seek NCLT directions so that registries update land records.
Are former directors protected under Section 32A?
No. Section 32A protects the corporate debtor and its property only. Former promoters and officers still face prosecution.
Lex Pleaders advises banks, NBFCs and businesses on resolution plans, ED attachments and NCLT strategy. As a law firm in Delhi NCR, we act before the NCLT, NCLAT and High Courts. Write to us at lexpleadersindia@gmail.com to discuss your matter.
Disclaimer: This article offers general information only and does not constitute legal advice.