ED Attachment Cannot Survive an Approved Resolution Plan, Rules Delhi High Court in Dash Exports v. Directorate of Enforcement
Case: Dash Exports Private Limited v. Directorate of Enforcement
Date of Judgment: 06 November 2026
Court: High Court of Delhi
Coram: Justice Navin Chawla and Justice Arun Bhardwaj
Proceedings: Miscellaneous Appeal (PMLA) No. 4 of 2026
Court Observation
“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,”
Summary
The Delhi High Court has held that a property attached by the Enforcement Directorate under the Prevention of Money Laundering Act can be released from attachment after approval of a resolution plan under the Insolvency and Bankruptcy Code, even if the attachment order predates the approval. The Court set aside the PMLA Appellate Tribunal’s order of 12 August 2025 and directed that the Rs. 3.01 crore fixed deposit furnished on the company’s behalf be released within two weeks.
The Court held that Section 32A of the Code 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 trigger for the provision is approval of the plan under Section 31, and there is no basis in Section 32A or in the Supreme Court’s decision in Manish Kumar v. Union of India for confining its protection to attachments made after approval. The protection applies only where the property is covered by the approved plan and control passes to a person who is not a promoter, part of the previous management, or a related party, and against whom there is no allegation of abetting or conspiring in the offence.
Key Holdings
- An Enforcement Directorate attachment does not remain effective merely because it predates approval of an insolvency resolution plan; Section 32A of the Insolvency and Bankruptcy Code operates prospectively to release the property from attachment once the plan is approved.
- The trigger for Section 32A is approval of the resolution plan under Section 31 of the Code, and there is no basis for confining its protection to attachments made after approval.
- Section 32A does not retrospectively annul an attachment order passed before approval of the plan; it releases the property from the attachment going forward.
- The protection is conditional: the property must be covered by the approved plan, and the new controller must not be a promoter, part of the previous management, or a related party, and must not fall within the statutory abetment-or-conspiracy exception.
- A finding by the Special Court that the new controller does not fall within the exceptions to Section 32A is necessary only if the Enforcement Directorate alleges that it does; in the absence of such an allegation, no academic finding is required.
Directions Issued
- The Rs. 3.01 crore fixed deposit receipt deposited by Asteroid Shelter Homes Private Limited on behalf of Dash Exports shall be released to Dash Exports within two weeks of the judgment.
Background
Dash Exports entered the corporate insolvency resolution process on 26 February 2020. Its committee of creditors approved a resolution plan submitted by Asteroid Shelter Homes Private Limited on 27 November 2020 with 99.22% of the voting share. Before the National Company Law Tribunal could pronounce its approval, the Enforcement Directorate provisionally attached the company’s property at Village Habibpur in Gautam Buddh Nagar on 25 August 2021; the Tribunal approved the plan on 29 September 2021 and the Adjudicating Authority confirmed the attachment on 26 May 2022. Dash Exports challenged the attachment before the PMLA Appellate Tribunal, which dismissed its appeal, leading to the present appeal before the High Court.
Judgment Link: Read the full judgment (PDF)
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Disclaimer: This is a summary prepared for informational purposes only and does not constitute legal advice. Readers should refer to the official judgment for the authoritative text.
