NCLAT Clarifies PMLA's Primacy Over Insolvency Code in Asset Attachments

The National Company Law Appellate Tribunal (NCLAT) has affirmed the precedence of the Prevention of Money Laundering Act (PMLA) over the Insolvency and Bankruptcy Code (IBC) in the context of asset attachment.

The tribunal ruled that assets confirmed as 'proceeds of crime' under the PMLA by the Enforcement Directorate (ED) and adjudicated by a competent authority are outside the purview of IBC's resolution proceedings.

The tribunal upheld that the distinct objectives of PMLA, particularly its role in maintaining international obligations, means it cannot be overridden by IBC, even if a corporate insolvency resolution is underway.

(With inputs from agencies.)