IBC cannot be used to frustrate PMLA proceedings: NCLT

The National Company Law Tribunal (NCLT) has asserted that the Insolvency and Bankruptcy Code (IBC) cannot be used to frustrate proceedings under the Prevention of Money Laundering Act (PMLA). This ruling clarifies the interplay between insolvency laws and anti-money laundering regulations. The NCLT emphasized that assets tainted by money laundering, even if a company is undergoing insolvency resolution, remain subject to PMLA actions, including attachment. This decision reinforces the primacy of the PMLA in seizing proceeds of crime, ensuring that defaulting entities cannot use the IBC process to shield illicitly acquired assets from investigation and confiscation.