Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 16 July 2026

Case Overview

  • Appeal No(s). 9692‑9693/2024 filed by the Directorate of Enforcement (DE) challenging the Bombay High Court judgment dated 01.03.2024 in Writ Petition (L) Nos. 9943/2023 and 29111/2023.
  • Parties are on the same footing regarding Section 8(8) of the Prevention of Money Laundering Act, 2002 (PMLA), which aims to restore attached properties to bona‑fide claimants.
  • The respondents, Shiv Charan & Ors., are the Successful Resolution Applicants (SRA) appointed by the National Company Law Tribunal (NCLT) order dated 17.02.2023 in the insolvency case of M/s. DSK Southern Projects Pvt. Ltd.
  • The court notes prior Supreme Court orders where DE consented to restoration of assets to SRAs: 11.12.2024 (JSW Steel Ltd.), 10.10.2025 (SLP(C) No. 26154‑26155/2025), and 11.11.2025 (V. Hotels Ltd.).

Findings & Reasoning

  • The attached properties comprise bank balances of Rs. 3.55 lakhs and fourteen residential flats valued at approximately Rs. 32.47 crore, belonging to the corporate debtor DSK Southern Projects Pvt. Ltd.
  • Under the second proviso to sub‑Section (8) of Section 8 PMLA, the court directs that these assets be restored to the SRA, who have stepped into the shoes of the corporate debtor following successful resolution under the Insolvency and Bankruptcy Code, 2016 (IBC).
  • In accordance with Section 32A of the IBC, the name of the corporate debtor shall be deleted from Prosecution Complaint No. 1123 of 2020 dated 03.08.2020 before the Special PMLA Court, Mumbai, while prosecution of the erstwhile directors, persons in control, conspirators, abettors, and confiscation of any other attached properties continues.
  • The benefit of Section 32A is conditional on the SRA not being connected with the erstwhile directors nor being a beneficiary of proceeds of crime; any erosion of this foundation permits DE to take appropriate legal steps, including questioning the resolution plan.
  • The court holds that any challenge by DE to the NCLT‑approved resolution plan is closed; DE has no right or lien on the assets attached under Provisional Attachment Order (PAO) No. 01/2019 dated 14.02.2019 (confirmed by the PMLA Adjudicating Authority on 05.08.2019) or any other assets forming part of the approved plan.
  • The resolution plan is deemed substantially implemented; the attached properties must be released by DE within two weeks of receipt of a copy of this order.
  • The order is issued on the peculiar facts of this case, with consent of the parties, and expressly states it shall not be treated as precedent; all legal questions remain open for determination in appropriate cases.
  • The Economic Crime Investigation Report (ECIR) against the erstwhile directors and promoters will continue unaffected by this order.
  • IA No. 233297/2024 seeking intervention is disposed of, with liberty to place this order before the Special Court for further appropriate orders.

Final Outcome

  • The Directorate of Enforcement is directed to restore Rs. 3.55 lakhs bank balances and fourteen flats worth ~Rs. 32.47 crore to the Successful Resolution Applicants.
  • The corporate debtor’s name is removed from the pending prosecution complaint, while prosecution of former directors proceeds.
  • All challenges to the NCLT resolution plan are barred; DE holds no lien on the assets.
  • The order is effective immediately, with asset release to occur within two weeks, and is not to be treated as a legal precedent.

Topics: Asset Restoration, Insolvency Resolution, Money Laundering Enforcement