This judgment decides only whether the provisional attachment order can continue against Dash Exports' property after approval of Asteroid's resolution plan. It does not decide the underlying money-laundering allegations, which remain pending before the competent forum, and it does not disturb the attachment for any person who falls within the exceptions in the proviso to section 32A(1) of the IBC.
- Case
- Dash Exports Private Limited v. Directorate of Enforcement
- Court
- High Court of Delhi
- Decision
- Citation
- 2026:DHC:9952-DB
- Bench
- Navin Chawla; Arun Bhardwaj
- Judgment by
- Navin Chawla
- Case numbers
- MISC. APPEAL (PMLA) 4 of 2026; CNR No. DLHC011085312025
- Outcome
- Appeal under section 42 of the PMLA allowed; the Appellate Tribunal's order dated 12 August 2025 set aside; the provisional attachment order held no longer to subsist against the corporate debtor's property; the fixed deposit of Rs 3.01 crore to be released to the appellant within two weeks.
The decision
The Delhi High Court has held that a provisional attachment order under the Prevention of Money Laundering Act 2002 cannot continue against a corporate debtor's property once a resolution plan for the debtor has been approved under the Insolvency and Bankruptcy Code 2016 and control has passed to a new owner — even if the attachment was made before the plan was approved. A division bench of Justices Navin Chawla and Arun Bhardwaj delivered the judgment on 6 November 2026.
Allowing the appeal filed by Dash Exports Private Limited, the court set aside the Appellate Tribunal's order dated 12 August 2025 and held that the Enforcement Directorate's Provisional Attachment Order No. 05 of 2021 shall no longer subsist against the company's property. It directed that the fixed deposit of Rs 3.01 crore deposited by the resolution applicant, Asteroid Shelter Homes Private Limited, in favour of the Directorate be released to the appellant within two weeks of the judgment. There was no order as to costs.
A plan approved, then an attachment
The corporate insolvency resolution process of Dash Exports began on 26 February 2020. Asteroid Shelter Homes submitted a resolution plan which the committee of creditors approved by 99.22% of votes on 27 November 2020. The National Company Law Tribunal reserved orders on approval of the plan on 26 March 2021.
Before the Tribunal could pronounce its order, the Enforcement Directorate provisionally attached the company's property at 228-P, Village Habibpur, Gautam Buddh Nagar, Uttar Pradesh, by Provisional Attachment Order No. 05 of 2021 dated 25 August 2021. The Tribunal approved the resolution plan under section 31 of the IBC on 29 September 2021, and the Adjudicating Authority confirmed the attachment order on 26 May 2022.
Dash Exports challenged the confirmation in a writ petition, which the High Court disposed of on 13 April 2023. In that order the Directorate agreed, in the unique facts of the case, to the deposit of Rs 3.01 crore — the value it had ascribed to the property — by way of a fixed deposit in its favour, to secure the interests of the company, the bank and the Directorate. The Appellate Tribunal later dismissed the company's appeal against the confirmation order on 12 August 2025, leading to the present appeal under section 42 of the PMLA.
The question before the court
The appeal raised an important question of law: what is the effect of the approval of a resolution plan under section 31 of the IBC on property provisionally attached under section 5 of the PMLA? The Directorate's case was that section 32A of the IBC — which bars proceedings against the corporate debtor's property after a plan is approved — applies only to attachment orders passed after the approval of the resolution plan. Dash Exports contended that the trigger is the approval itself, whenever the attachment was made.
Section 32A and the clean slate
Section 32A of the IBC provides that, once a resolution plan is approved, the liability of the corporate debtor for an offence committed before the commencement of the insolvency process ceases, and no action can be taken against the property of the corporate debtor in relation to such an offence — subject to the conditions in the proviso to section 32A(1), which require that control pass to a person who is not a promoter or a person in management or control of the debtor, or a related party of such a person, and whom the investigating authority has no reason to believe abetted or conspired in the commission of the offence.
The court discussed the Supreme Court's decision in Manish Kumar v. Union of India (2021) 5 SCC 1, and the Bombay High Court's decision in Shiv Charan, which had considered the implications of section 32A for corporate debtors and enforcement agencies that had attached their assets. The court noted that when the challenge to Shiv Charan reached the Supreme Court in Civil Appeals 9692-9693 of 2024, the parties arrived at a settlement and the Supreme Court left the question of law open — so the Delhi High Court decided the point on its own reading of section 32A with Manish Kumar.
Why the date of the attachment does not matter
The court rejected the distinction drawn by the Directorate and accepted by the Tribunal — that section 32A(2) applies only to attachment orders passed after approval of the resolution plan — holding that it finds no support in the plain language of section 32A or in Manish Kumar. The trigger is the approval of the resolution plan: once the plan is approved and control passes to a third party satisfying the conditions in section 32A, that third party must get the corporate debtor’s properties free from all encumbrances, including a PMLA attachment.
The court added that this reading does not place the IBC in conflict with the PMLA, nor does it make section 32A operate retrospectively to annul an attachment passed before approval of the plan. It applies prospectively, to release the property from the attachment once the plan is approved. On the facts, the Directorate had not made any case that Asteroid fell within the exceptions in the proviso to section 32A(1) — it did not say that the property was outside the approved plan, that control had not changed, or that Asteroid was a promoter, a person in management or control, a related party, or a person the investigating authority had reason to believe had abetted or conspired in the offence.
The Tribunal's view that relief under section 32A could not be given until the Special Court found the appellant outside the exceptions could not be sustained: the occasion for such a finding arises only if the Directorate's case is that the appellant falls within an exception, and no such case was made. In the absence of any such case, the court held, it must be presumed that the Directorate has conceded that the appellant satisfies all the conditions in section 32A.
What happens now
With the Directorate's only plea rejected and no other defence taken, the court held that the Tribunal had erred in dismissing the appeal. It set aside the Tribunal's order of 12 August 2025, held that the provisional attachment order shall no longer subsist against Dash Exports, and directed release of the Rs 3.01 crore fixed deposit to the appellant within two weeks of the judgment.
The judgment leaves the underlying money-laundering proceedings untouched. What it settles is the status of this property: once a qualifying resolution plan is approved, the attachment cannot be used to hold the corporate debtor's assets hostage to the old management's alleged offences.
BANTHRY ANALYSISFor law students
Section 32A is the IBC’s clean-slate provision: a resolution applicant who takes over a company under an approved plan should not inherit the criminal liability or the attached assets of the old management, provided the applicant is genuinely new and unconnected with the offence.
The interesting move in this judgment is the court’s treatment of timing. The Directorate’s argument had a surface logic — a protection created by plan approval should not reach back to an attachment made before approval. The court answered that the protection is not retrospective annulment of the attachment but prospective release of the property: the attachment was lawful when made, but it cannot continue once the statutory conditions are met.
READING PROMPTSQuestions for a closer reading
- What is the trigger for the protection in section 32A of the IBC, and why did the court hold that the date of the attachment order does not matter?
- What conditions in the proviso to section 32A(1) must the person taking control of the corporate debtor satisfy, and what did the court say about who must raise them?
- Why did the court reject the Tribunal's view that relief under section 32A had to wait for a finding by the Special Court?
