Pranav B Prem

The Insolvency and Bankruptcy Board of India (IBBI) has issued a detailed circular advising Insolvency Professionals (IPs) to proactively pursue restitution of assets attached by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), to strengthen recovery outcomes in insolvency and liquidation proceedings. In its Circular No. IBBI/CIRP/87/2025, dated November 4, 2025, the Board noted that in several insolvency cases, the assets of corporate debtors remain under attachment by the ED. It observed that reclaiming such assets can “significantly enhance the value of the corporate debtor,” leading to higher realizations for stakeholders.

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The circular directs insolvency professionals to file applications before Special Courts under Sections 8(7) or 8(8) of the PMLA seeking restitution of attached assets. To facilitate quicker adjudication of such requests, the IBBI — in consultation with the ED — has also prescribed a standard undertaking to accompany each application. Under this undertaking, insolvency professionals must assure that the restituted assets will not be transferred, sold, or otherwise dealt with in a manner that benefits any ineligible persons under Section 29A of the Insolvency and Bankruptcy Code (IBC) or individuals accused in ED or predicate offences.

The circular requires IPs to maintain strict reporting discipline once restitution is granted. They must submit quarterly status reports to the Special Court detailing:

• The condition and usage of the restituted assets,

• Steps taken for their monetisation,

• Details of distribution among stakeholders, and

• Any sale or transfer of such assets.

Additionally, insolvency professionals must disclose all ED-attached properties in the Information Memorandum or auction notices issued during the CIRP or liquidation. If new details emerge later, these must be promptly updated in subsequent filings.

To ensure transparency and cooperation, IPs are required to extend full assistance to the ED in its investigations. This includes providing information on:

• Preferential, undervalued, fraudulent, or extortionate (PUFE) transactions,

• The composition and voting share of the Committee of Creditors (CoC), and

• Details of the Successful Resolution Applicant (SRA) or bidder, along with relevant NCLT orders.

Where the ED seeks access to documents, IPs must supply them promptly. However, commercially sensitive materials — such as valuation reports or resolution plans — may be shared only after the ED acknowledges the sensitivity in writing.

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The undertaking remains effective until the approval of the resolution plan or dissolution order by the Adjudicating Authority. The Board clarified that this framework has been formulated under its powers conferred by Section 196 of the Insolvency and Bankruptcy Code, 2016.