Attachment of Assets by Enforcement Directorate during the Liquidation Phase of Insolvency Proceedings in India: An Analysis

This research paper is an attempt to critically analyse the conflict between the Insolvency and Bankruptcy Code and the Prevention of Money Laundering Act. Section 32A of the IBC has given primacy to the Insolvency and Bankruptcy Code which to some extent has curtailed the power of Prevention of Money Laundering Act and as a result has had a serious economic shortcomings and injustice. A company indulging in money laundering activities would escape from the clutches of Justice because of the over-riding effect of Insolvency and bankruptcy Code over The Prevention of Money Laundering Act. The basic purpose behind Prevention of Money Laundering Act is to recover the amount that has been illegally laundered by individuals and companies and on the other hand, Insolvency and the bankruptcy Code’s sole purpose is to ease and facilitate Insolvency resolution. When the purpose behind both these legislations are distinct, they meet at a conjunctive point where a company involved in money laundering activities comes to a stage of Corporate Insolvency Resolution Process. At this juncture, Insolvency and Bankruptcy Code has Primacy over Prevention of Money laundering Act and thus, the money illegally laundered will basically be used in the process of Insolvency Resolution. This is a very serious shortcoming since the underlying principle behind Prevention of Money Laundering Act is being curtailed here because of IBC and this must necessarily be researched upon. This research will analyse the interplay between both these legislations and come up with a proper course of action to uphold justice.