S. 238 of IBC cannot Override PMLA in Cases Involving Proceeds of Crime: NCLAT

The NCLAT (National Company Law Appellate Tribunal) has held that Section 238 of the IBC (Insolvency and Bankruptcy Code) "cannot override PMLA cases involving proceeds of crime." Section 238 of IBC states that the Code will have an overriding effect on other laws. However, this ruling reiterates that PMLA, which specifically deals with money laundering and proceeds of crime, operates independently and takes precedence when assets are linked to criminal activity. This ensures that assets derived from illegal activities remain subject to PMLA actions, even if insolvency proceedings are underway.