An ED attachment does not remain effective merely because it predates approval of an insolvency resolution plan, the Delhi High Court has held. Where the plan and change of control meet Section 32A of the Insolvency and Bankruptcy Code, the protected property must be released from the attachment. The Court ordered return of Dash Exports’ Rs.3.01 crore fixed deposit within two weeks.
New Delhi: ED attached the property on August 25, 2021, before the NCLT approved the resolution plan, and the Delhi High Court has now held that the provisional attachment could no longer subsist on the facts of the case. It allowed Dash Exports Private Limited’s appeal against the Directorate of Enforcement, rejecting an attempt to confine Section 32A protection to attachments made after approval of a resolution plan [Dash Exports Private Limited v. Directorate of Enforcement].
The judgment was delivered on November 6, 2026, by Justices Navin Chawla and Arun Bhardwaj. They set aside the Appellate Tribunal’s August 12, 2025 order.
Approval is the trigger, subject to statutory safeguards
The High Court rejected the distinction between attachments made before and after approval. In paragraphs 32 and 33, it found no basis for it in Section 32A or the Supreme Court’s decision in Manish Kumar v. Union of India. Once a qualifying plan is approved and control passes to an eligible third party, the statutory protection must take effect.
That protection is conditional. The property must be covered by the approved plan, and the new controller must satisfy the requirements excluding the former promoter or management, related parties and persons falling within the statutory abetment-or-conspiracy exception.
The judgment does not treat the mere commencement of insolvency proceedings as sufficient. Its conclusion concerns the legal position after approval of a plan that satisfies Section 32A.
Paragraph 37 also explains why this is not retrospective invalidation of a previously lawful attachment: the provision operates prospectively to release the property once the statutory conditions are met.
How the attachment came about
Dash Exports entered the corporate insolvency resolution process in February 2020. The committee of creditors approved Asteroid Shelter Homes Private Limited’s plan in November 2020. ED provisionally attached the company’s property in Gautam Buddh Nagar on August 25, 2021, before the NCLT approved the resolution plan on September 29, 2021.
The attachment was subsequently confirmed. In earlier High Court proceedings, an arrangement allowed a fixed deposit of Rs.3.01 crore, representing the property’s attributed value, to be placed in ED’s favour while the attachment challenge proceeded before the tribunal.
The tribunal rejected that challenge. It took the view that the statutory protection did not disturb an attachment made before approval and that a finding from the Special Court was necessary before relief could follow.
No finding in a vacuum required from the Special Court
ED did not allege that Asteroid was related to the former management or fell within the disqualifying exceptions. Nor did it dispute the relevant change of control or the property’s coverage under the approved plan.
Against that background, the tribunal could not insist on an academic finding from the Special Court that the exceptions were absent. The High Court held that such an issue would arise if ED actually asserted that an exception applied. The agency’s objection here was the timing of its attachment, which the bench rejected.
Protection for the resolved company does not erase individual liability
The Court’s discussion of Section 32A preserves the distinction between the company under qualifying new control and persons involved in earlier offences. The statutory scheme does not absolve responsible individuals and retains the obligation to assist investigations.
The bench drew support from the Bombay High Court’s Shiv Charan judgment, while expressly recording that the Supreme Court had left the legal question open when the appeal in that case ended in a settlement. Delhi’s conclusion rested on its own interpretation of Section 32A and the Supreme Court’s reasoning in Manish Kumar.
Allowing the appeal, the High Court directed release to Dash Exports of the Rs.3.01 crore FDR deposited by Asteroid on its behalf, within two weeks of the judgment. It made no order as to costs.
Case: Dash Exports Private Limited v. Directorate of Enforcement
Case No.: MISC. APPEAL(PMLA) 4/2026
CNR: DLHC011085312025
Bench: Justices Navin Chawla and Arun Bhardwaj, Delhi High Court
Date: November 6, 2026
Outcome: Appeal allowed; tribunal order set aside; Rs.3.01 crore FDR directed to be released within two weeks.