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2 July 2026

ED powers under PMLA and insolvency

This NCLAT ruling provides a significant legal clarification on the jurisdictional conflict between the PMLA and the IBC, which is a core issue for GS2 regarding statutory bodies and dispute redressal mechanisms.

1 min read 1 questions 1 prelims

Notes

  • The National Company Law Appellate Tribunal (NCLAT) ruled that the insolvency moratorium under the Insolvency and Bankruptcy Code (IBC) does not protect assets identified as proceeds of crime.
  • The ruling clarifies that the Enforcement Directorate (ED) retains the authority to attach assets under the Prevention of Money Laundering Act (PMLA) even during ongoing insolvency proceedings.
  • NCLAT established that the adjudicatory mechanism under the PMLA has exclusive jurisdiction over matters involving the attachment of assets linked to money laundering.
  • Tribunals constituted under the IBC lack the legal authority to entertain pleas or challenges against actions taken by the ED under the PMLA.

Questions

  1. Discuss the jurisdictional conflict between the Insolvency and Bankruptcy Code (IBC) and the Prevention of Money Laundering Act (PMLA) in the context of asset attachment. How has the judiciary balanced the objective of corporate insolvency resolution with the mandate of anti-money laundering laws? 150 words
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Prelims

  1. According to the recent NCLAT ruling, which authority has the exclusive jurisdiction to deal with the attachment of assets alleged to be proceeds of crime during insolvency proceedings?

Syllabus

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Sources

250words.in · https://250words.in/daily/2026-07-02/ed-powers-under-pmla-and-insolvency