Section 32A and MPID attachment law limit post-resolution recovery action against corporate debtor property and require final vesting order.

Section 32A of the Insolvency and Bankruptcy Code, 2016 was treated as barring continuation of attachment proceedings against a corporate debtor's property for prior offences once a resolution plan is approved and management or control changes; attachment, seizure, retention and confiscation were included within "action against the property", so the attachment could not survive. Under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, publication of an attachment notification was held to be only provisional, and vesting remained incomplete until the Designated Court made the attachment absolute under Section 7. As no such order had been passed, the property had not finally vested in the competent authority.

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Issues: (i) Whether, after approval of the resolution plan, Section 32A of the Insolvency and Bankruptcy Code, 2016 barred continuation of attachment proceedings against the corporate debtor's property under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999; (ii) Whether the impugned attachment had already vested in the competent authority on publication of the attachment notification, so as to keep the property outside the resolution process.

Issue (i): Whether, after approval of the resolution plan, Section 32A of the Insolvency and Bankruptcy Code, 2016 barred continuation of attachment proceedings against the corporate debtor's property under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999.

Analysis: Section 32A was held to grant immunity from prosecution to the corporate debtor for prior offences once a resolution plan approved under Section 31 results in a change in management or control, and to bar action against the corporate debtor's property in relation to such offences where the property is covered by the approved plan. The expression "action against the property" was understood to include attachment, seizure, retention and confiscation. On the facts, the corporate debtor satisfied the statutory conditions, the resolution plan had been approved, and the corporate debtor was proceeding on a clean slate. The attachment, therefore, could not survive.

Conclusion: The bar under Section 32A applied, and continuation of the attachment was impermissible. This issue was decided in favour of the petitioner.

Issue (ii): Whether the impugned attachment had already vested in the competent authority on publication of the attachment notification, so as to keep the property outside the resolution process.

Analysis: Under Sections 4 to 7 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, attachment on publication is only provisional and vesting remains inchoate until the Designated Court, after inquiry, makes the attachment absolute under Section 7. Since no order under Section 7 had been passed making the attachment absolute, the property had not finally vested in the competent authority. The attempt to treat the mere notification as completed vesting was rejected.

Conclusion: The attachment had not matured into final vesting, and the property remained capable of being released from attachment. This issue was decided in favour of the petitioner.

Final Conclusion: The attachment could not be sustained after approval of the resolution plan, and the impugned notification was liable to be quashed in relation to the subject property, with consequential return of the bank guarantee.

Ratio Decidendi: Once a resolution plan satisfying Section 32A of the Insolvency and Bankruptcy Code, 2016 is approved, all action against the corporate debtor's property for prior offences, including attachment, ceases; under the MPID Act, attachment becomes final only when the Designated Court makes it absolute under Section 7.

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