NCLAT upholds ED’s PMLA powers over insolvency moratorium
The NCLAT ruled that insolvency moratoriums cannot protect assets linked to criminal activities, affirming the Enforcement Directorate's authority under the PMLA. The tribunal clarified that PMLA mechanisms have jurisdiction over assets attached as proceeds of crime.
Why it matters
This establishes a legal precedent regarding the intersection of corporate insolvency law and anti-money laundering enforcement.
The National Company Law Appellate Tribunal (NCLAT) has said the moratorium available to companies undergoing insolvency proceedings cannot be used to shield assets alleged to be proceeds of crime, while upholding actions taken by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) against Siddhi Vinayak Logistics Ltd..
The article summarizes a legal judgment and the court's reasoning without taking a side.
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