No "Safe Harbour" For Proceeds Of Crime Under IBC

Corporate creditors and insolvency professionals already have their hands full running the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). Add the Directorate of Enforcement (ED) attaching a corporate debtor’s properties under the Prevention of Money Laundering Act, 2002 (PMLA), and what you get is a problematic turf war between two statutes.

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT), in Value Wise Consultancy Private Limited v. The Deputy Director, Directorate of Enforcement (June 30, 2026), read together with its earlier reasoning in Kiran Shah v. Enforcement Directorate, has left little doubt about where the law stands: the IBC offers no safe harbour, and certainly no "cleansing ritual," for proceeds of crime.