PMLA restoration mechanism permits handover of attached corporate debtor assets to a successful resolution applicant, while key insolvency issues remain open.

Provisionally attached properties of a corporate debtor were directed to be handed over to the successful resolution applicant under the restoration mechanism in Section 8(8) of the Prevention of Money Laundering Act, 2002 read with Rule 3A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016. The direction was based on the parties' consensus and the peculiar facts, including that the attachment was made after approval of the resolution plan. The Court expressly left undecided the interaction with Section 32A of the Insolvency and Bankruptcy Code, 2016, the merits of the connected appeals, and the Enforcement Directorate's power to attach property during insolvency resolution, while preserving the parties' rights and contentions.

---

---

Issues: Whether the provisionally attached properties of the corporate debtor could be handed over to the successful resolution applicant by invoking the restoration mechanism under Section 8(8) of the Prevention of Money Laundering Act, 2002 read with Rule 3A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016, while leaving open the question of the interaction between such attachment and Section 32A of the Insolvency and Bankruptcy Code, 2016.

Analysis: The direction was passed on the basis of the consensus of the parties and in the peculiar facts of the case. The attachment had been made after approval of the resolution plan by the adjudicating authority, and the Court expressly recorded that it was not expressing any opinion on the merits of the appeals, on the interpretation of Section 32A of the Insolvency and Bankruptcy Code, 2016, or on the power of the Enforcement Directorate to attach property of a corporate debtor undergoing insolvency resolution. The order was confined to enabling handover of control of the attached properties to the successful resolution applicant, without prejudice to the rights and contentions of the parties in the connected proceedings.

Conclusion: The attached properties were directed to be handed over to the successful resolution applicant, and the substantive legal questions were left undecided.

---