Post by Lawlance

The Ultimate Turf War: IBC vs. PMLA Value Wise Consultancy (Liquidator of SVLL) vs. ED When Corporate Insolvency meets Criminal Law, who blinks first? The recent NCLAT Delhi judgment (July 1, 2026) in the Siddhi Vinayak Logistics liquidation case brings us back to the most explosive intersection in Indian corporate law: The Liquidator vs. The Enforcement Directorate (ED). The IBC wants to maximize asset value and pay back the creditors. The PMLA wants to freeze and attach assets derived from the "Proceeds of Crime." While the Supreme Court in Manish Kumar firmly established the "Clean Slate Principle" under Section 32A of the IBC, protecting the new management and assets after a resolution plan is approved, the transition period remains a battlefield. If the ED attaches the properties of a Corporate Debtor during liquidation, the commercial reality is brutal: The asset value drops to zero. Buyers and bidders run away. The ultimate victims are the secured creditors whose public money remains locked in litigation. If the objective of the IBC is value maximization, allowing PMLA attachments to derail the liquidation process defeats the entire economic purpose of the Code. The law must bridge this gap between attaching the 'proceeds of crime' and facilitating a viable 'going concern' sale. What are your thoughts on this statutory clash? Does the overriding effect of Section 238 of the IBC need sharper teeth against the PMLA? #Lawlance #IBC #PMLA #NCLAT #CorporateLitigation #InsolvencyLaw #EnforcementDirectorate #WhereLawMeetsFinance