The ED has consistently argued that proceeds of crime never lawfully vest in the corporate debtor and therefore do not form part of the insolvency estate.
Introduction
The interface between the Prevention of Money-Laundering Act, 2002 (PMLA) and the Insolvency and Bankruptcy Code, 2016 (IBC) raises one of the most fundamental questions in contemporary Indian commercial law: Can the State, acting through criminal confiscation, dismantle the insolvency estate that Parliament has statutorily insulated for corporate rescue?
Over the last few years, Indian Courts, and especially the Supreme Court, have answered this question with increasing clarity. While criminal prosecution must proceed, corporate assets undergoing insolvency resolution…