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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 5272 OF 2025

Dwarka Iron Industries Pvt. Ltd. … Petitioner

Versus

Competent Authority (under MPID Act, 1999)

& Anr. … Respondents

******

Mr. Ashish Kamat, Senior Advocate, a/w Mr. Subir Kumar, Ms.

Vaishnavi Pawar, Ms. Ashita Aggarwal i/by SDS Advocates for

Petitioner.

Mr. B. V. Samant, Addl. G. P., a/w Ms. P. J. Gavhane, AGP for

Respondent Nos.1 and 2-State.

******

CORAM:MANISH PITALE AND

SHREERAM V. SHIRSAT, JJ.

RESERVED ON:17

th

APRIL 2026

PRONOUNCED ON :8

th

JUNE 2026

Judgment (Per Manish Pitale, J.) :

. This petition raises questions pertaining to Section 32A of

the Insolvency and Bankruptcy Code, 2016 (IBC) in the context of

the provisions of the Maharashtra Protection of Interest of

Depositors (in Financial Establishments) Act, 1999 (MPID Act).

The petitioner is seeking quashing of a notification dated

19.03.2016 issued by the respondent No.1 i.e. the Competent

Authority under the MPID Act in respect of a property belonging

to a corporate debtor. The respondent No.2-State is opposing the

prayer made in the present application, inter alia, on the ground

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that the object of enactment of the MPID Act needs to be taken

into consideration by this Court, while determining the effect of

Section 32A of the IBC, in the facts and circumstances of the

present case. In order to properly appreciate the rival contentions

and the questions sought to be raised by the rival parties, it would

be necessary to briefly refer to the chronology of events, leading to

filing of the present writ petition.

2.The corporate debtor in the present case is M/s. Abhirama

Steels Limited and it is represented by the Successful Resolution

Applicant i.e. Dwarka Iron Industries Pvt. Ltd. On 06.09.2008,

much prior to the alleged offence registered in the present case

attracting the provisions of the MPID Act, the corporate debtor

purchased the subject immovable property bearing Survey No.

272/1, Chityala Village, Pargi Mandal, Dist. Rangareddy,

Telangana, by way of registered sale deed. On 29.12.2008, the

corporate debtor was incorporated under the provisions of the

Companies Act and it commenced its business of manufacturing

basic iron and steel. In the year 2010, the Indian Bank sanctioned

various credit facilities to the corporate debtor. In that context,

the corporate debtor created an equitable mortgage over the

subject property in favour of the Indian Bank.

3.On 30.12.2013, the respondent No.2-State through the

Economic Offences Wing (EOW) registered C.R. No. 168 of 2013

under Sections 420, 409, 477A and 120B of the Indian Penal

Code, 1860 (IPC) against an entity called Birla Power Solutions

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Ltd. The corporate debtor was not named as an accused in the said

FIR. In the year 2014, the investigating agency filed charge-sheet

in the said matter against accused persons, which included the

father of the Managing Director of the corporate debtor. At this

stage also, the corporate debtor was not arraigned as an accused

and the subject property was not shown as having been acquired as

proceeds of crime. On 19.03.2016, the respondent-State of

Maharashtra issued impugned notification under the provisions of

the MPID Act, attaching several properties, including the subject

property belonging to the corporate debtor. Since, the corporate

debtor was neither the financial establishment, in the context of

which the provisions of the MPID Act were invoked, nor was it an

accused in the case, it submitted its objection on 19.08.2016

before the respondent No.1-Competent Authority, challenging the

alleged illegal attachment of the subject property.

4.On 31.03.2017, the Indian Bank classified the loan account

of the corporate debtor as a Non-Performing Asset (NPA). On

03.05.2017, the Indian Bank issued demand notice under Section

13(2) of the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002 (Securitisation

Act). Thereupon, the Indian Bank took symbolic possession of the

secured asset to initiate steps for e-auction of the subject property.

At this stage, in the year 2017, the corporate debtor filed

Miscellaneous Application No. 1280 of 2017 in the concerned

MPID Case No. 4 of 2014, before the designated Court, where

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the MPID case was pending, in order to challenge continuation of

the proceedings under the Securitisation Act. On 25.07.2018, the

designated MPID Court refused to grant stay on the e-auction, but

it is an admitted position that the auction sale did not materialize

in respect of the subject property.

5.On 16.11.2021, an operational creditor filed proceedings

under Section 9 of the IBC and National Company Law Tribunal

(NCLT), Hyderabad, admitted C.P. (IB) No.525/9/HDB/2019. As a

consequence, Corporate Insolvency Resolution Process (CIRP) was

initiated in the context of the corporate debtor and an Interim

Resolution Professional was appointed. Upon admission of the

CIRP on 23.11.2021, the resolution professional issued a public

notice in Form A, inviting claims from creditors. Thereupon,

expressions of interest were invited in Form G from prospective

resolution applicants. The order of the NCLT, admitting the

corporate debtor in CIRP was confirmed, when National

Company Law Appellate Tribunal (NCLAT) dismissed the

Company Appeal on 08.07.2022. Thereafter, an appeal was filed

before the Supreme Court, wherein status-quo was granted. But,

eventually, on 26.02.2024, the appeal was dismissed and the

interim order was vacated. As a consequence, the CIRP

proceedings continued.

6.On 17.09.2024, the NCLT, Hyderabad, approved the

resolution plan submitted by the successful resolution applicant.

As per the position of law recognized by the Supreme Court in a

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series of judgments, the corporate debtor was to now start its

activities on a clean slate. On 09.10.2024, the successful resolution

applicant paid amount of Rs.14.50 crores to the Indian Bank in

full and final settlement of its dues. Consequently, Indian Bank

issued no objection certificate and no charge remained on the

subject property.

7.It is relevant to note that in the meanwhile, the resolution

professional had filed Writ Petition No. 3447 of 2022, before this

Court for challenging the attachment of the subject property of

the corporate debtor. On 26.02.2025, this Court permitted the

said writ petition to be withdrawn, with liberty to file fresh

proceedings in the light of the resolution plan having been

approved.

8.It is in this backdrop that the present writ petition was filed,

relying upon Section 32A of the IBC, for quashing and setting

aside of the impugned notification dated 19.03.2016, so that the

subject property would be released from attachment. On

04.11.2025, this Court after hearing the petitioner and the

respondents, through their respective counsel, granted interim

relief in terms of prayer clause (b). As a consequence, the

attachment of the subject property in terms of notification dated

19.03.2016 was released, subject to the petitioner furnishing bank

guarantee in favour of the Registry of this Court for a sum of

Rs.74.24 lakhs. Subsequently, the time period for furnishing such

bank guarantee was extended and it is an admitted position that

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the petitioner indeed furnished the bank guarantee. The pleadings

in the writ petition were completed and it was taken up for

hearing.

9.Mr. Ashish Kamat, learned senior counsel appearing for the

petitioner, invited attention of this Court to Section 32A of the

IBC, to contend that the moment the resolution plan was

accepted, the corporate debtor could not be made subject matter

of any prosecution and its properties became immune from any

action, including attachment, as per the impugned notification

dated 19.03.2016. The learned senior counsel appearing for the

petitioner relied upon the text of Section 32A of the IBC to submit

that a plain reading of the same would show that no other

interpretation was possible.

10.In order to bolster the aforesaid submission, attention of this

Court was invited to judgment of the Supreme Court in the case of

Manish Kumar vs. Union of India & Anr., (2021) 5 SCC 1. It was

submitted that criminal liability of the corporate debtor stood

extinguished under Section 32A of the IBC and the property of

the corporate debtor could no longer be subject to such

attachment. It was further submitted that the Supreme Court in

the case of Ghanashyam Mishra and Sons Private Limited vs.

Edelweiss Asset Reconstruction Company Limited & Ors., (2021)

9 SCC 657 emphasized the position that upon the resolution plan

being accepted, the corporate debtor started on a clean slate,

thereby indicating that the effect of the impugned notification

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could no longer survive. He further referred to the judgment of

the Supreme Court in the case of Kalyani Transco vs. Bhushan

Power and Steel Ltd. & Ors., 2025 SCC OnLine SC 2093 to

demonstrate that the effect of non-obstante clause at the beginning

of the Section 32A of the IBC clearly demonstrated that no action

could be taken in respect of the subject property of the corporate

debtor in respect of any offence committed prior to the

commencement of the CIRP, particularly when such property was

covered under the resolution plan approved by the adjudicating

authority.

11.It was further submitted that a Division Bench of this Court

in the case of Shiv Charan & Ors. vs. Adjudicating Authority, 2024

SCC OnLine Bom 701 had followed the said position of law. It

was fairly brought to the notice of this Court that in the Special

Leave petition, challenging the said judgment of the Division

Bench of this Court, leave was granted and interim order was

continued.

12.On the basis of the aforesaid judgments of the Supreme

Court and this Court, it was asserted that the attachment of the

subject property of the corporate debtor could no longer survive.

On the aspect of the interpretation of the order dated 17.09.2024

passed by the NCLT, Hyderabad, approving the resolution plan, it

was submitted that a proper reading of the same, including

paragraph 8(g), would demonstrate that the logical consequence of

the effect of Section 32A of the IBC clearly inured in favour of the

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petitioner. It was submitted that although, the NCLT had granted

liberty to the petitioner to approach the Competent Authority

under the MPID Act for lifting the attachment on the subject

property, the present writ petition was clearly maintainable, as a

pure question of law arose in the matter. Merely because liberty

was granted to approach the designated Court, the same would

not take away the jurisdiction of this Court in considering the

present writ petition. In that context, reliance was placed on

judgment of the Supreme Court in the case of Godrej Sara Lee

Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority &

Ors., 2023 SCC OnLine SC 95.

13.It was further submitted that the respondents cannot rely

upon the judgment of the Supreme Court in the case of National

Spot Exchange Limited vs. Union of India & Ors., (2025) 8 SCC

393, as the Supreme Court had considered a different controversy

while making observations about the interplay between the

provisions of the IBC and the MPID Act. It was submitted that the

subject property was merely attached under Section 4 of the MPID

Act and its vesting would become absolute only upon the

designated Court passing an appropriate order under Section 7 of

the MPID Act. Since no such order had been passed till date, there

was no question of vesting of the subject property with the

competent authority, thereby showing that the writ petition

deserves to be allowed.

14.On the other hand, Mr. B. V. Samant, learned Additional

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Government Pleader (AGP) appearing on behalf of the

respondents-State Authorities, submitted that the petition deserves

to be dismissed. It was submitted that the petitioner could not be

permitted to wriggle out of order of the NCLT, as the adjudicating

authority, when it approved the resolution plan as per order dated

17.09.2024. Attention of this Court was specifically invited to

paragraph 8(g) of the said order, to contend that the NCLT had

clarified that the prayer for lifting of the attachment could be

made before the competent authority and that such a prayer made

while submitting the resolution plan was specifically refused. It

was submitted that if the petitioner was aggrieved by the said

order, it should have challenged the same under the provisions of

the IBC and in absence thereof, the said order had attained finality.

Therefore, the only forum available for the petitioner for seeking

lifting of the attachment of the subject property, was the

designated MPID Court. Instead of approaching the said Court,

the petitioner had filed the present writ petition, which ought not

to be entertained by this Court.

15.It was submitted that although the position of law, regarding

the corporate debtor starting on a clean slate after approval of the

resolution plan has been recognized by the Supreme Court in

various judgments, in the case of National Spot Exchange Limited

vs. Union of India & Ors. (supra), the Supreme Court had an

occasion to specifically consider the interplay between the

provisions of the IBC and the MPID Act. It was submitted that

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upon a proper application of the ratio of the said judgment, it

would become evident that once the impugned notification dated

19.03.2016 was issued, attaching the subject property, it vested in

the competent authority and it was no longer available for the

process of CIRP. Therefore, the subject property could never be

subject matter of the resolution plan, even if it was accepted. On

this basis, it was submitted that the contentions raised on behalf of

the petitioner cannot be accepted and that writ petition deserves

to be dismissed.

16.We have considered the rival submissions in the light of the

provisions of the IBC and MPID Act, as also the aforementioned

judgments upon which reliance has been placed. It would be

appropriate to refer to Section 32A of the IBC and the relevant

provisions of the MPID Act.

17.Section 32A of the IBC reads as follows :

“32A.Liability for prior offences, etc.--(1) Notwithstanding

anything to the contrary contained in this Code or any other

law for the time being in force, the liability of a corporate

debtor for an offence committed prior to the commencement

of the corporate insolvency resolution process shall cease, and

the corporate debtor shall not be prosecuted for such an

offence from the date the resolution plan has been approved

by the Adjudicating Authority under section 31, if the

resolution plan results in the change in the management or

control of the corporate debtor to a person who was not–

(a) a promoter or in the management or control of the

corporate debtor or a related party of such a person; or

(b) a person with regard to whom the relevant

investigating authority has, on the basis of material in its

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possession, reason to believe that he had abetted or conspired

for the commission of the offence, and has submitted or filed

a report or a complaint to the relevant statutory authority or

Court:

Provided that if a prosecution had been instituted

during the corporate insolvency resolution process against

such corporate debtor, it shall stand discharged from the date

of approval of the resolution plan subject to requirements of

this sub-section having been fulfilled:

Provided further that every person who was a

designated partner as defined in clause (j) of section 2 of the

Limited Liability Partnership Act, 2008 (6 of 2009), or an

officer who is in default, as defined in clause (60) of section 2

of the Companies Act, 2013 (18 of 2013), or was in any

manner incharge of, or responsible to the corporate debtor for

the conduct of its business or associated with the corporate

debtor in any manner and who was directly or indirectly

involved in the commission of such offence as per the report

submitted or complaint filed by the investigating authority,

shall continue to be liable to be prosecuted and punished for

such an offence committed by the corporate debtor

notwithstanding that the corporate debtor's liability has

ceased under this sub-section.

(2) No action shall be taken against the property of the

corporate debtor in relation to an offence committed prior to

the commencement of the corporate insolvency resolution

process of the corporate debtor, where such property is

covered under a resolution plan approved by the Adjudicating

Authority under section 31, which results in the change in

control of the corporate debtor to a person, or sale of

liquidation assets under the provisions of Chapter III of Part II

of this Code to a person, who was not–

(i) a promoter or in the management or control of the

corporate debtor or a related party of such a person; or

(ii) a person with regard to whom the relevant

investigating authority has, on the basis of material in its

possession reason to believe that he had abetted or conspired

for the commission of the offence, and has submitted or filed

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a report or a complaint to the relevant statutory authority or

Court.

Explanation.--For the purposes of this sub-section, it is

hereby clarified that,–

(i) an action against the property of the corporate

debtor in relation to an offence shall include the attachment,

seizure, retention or confiscation of such property under such

law as may be applicable to the corporate debtor;

(ii) nothing in this sub-section shall be construed to bar

an action against the property of any person, other than the

corporate debtor or a person who has acquired such property

through corporate insolvency resolution process or

liquidation process under this Code and fulfils the

requirements specified in this section, against whom such an

action may be taken under such law as may be applicable.

(3) Subject to the provisions contained in sub-sections

(1) and (2), and notwithstanding the immunity given in this

section, the corporate debtor and any person who may be

required to provide assistance under such law as may be

applicable to such corporate debtor or person, shall extend all

assistance and co-operation to any authority investigating an

offence committed prior to the commencement of the

corporate insolvency resolution process.”

18.Sections 4 to 7 of the MPID Act, read as follows :

“4. Attachment of Properties on default of return of

deposits.— (1) Notwithstanding anything contained in any

other law for the time being in force,—

(i) where upon complaints received from the depositors

or otherwise, the Government is satisfied that any Financial

Establishment has failed,—

(a) to return the deposit after maturity or on demand

by the depositor; or

(b) to pay interest or other assured benefit; or

(c) to provide the service promised against such

deposit; or

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(ii) where the Government has reason to believe that

any Financial Establishment is acting in a calculated manner

detrimental to the interest of the depositors with an intension

to defraud them;

and if the Government is satisfied that such Financial

Establishment is not likely to return the deposits or make

payment of interest or other benefits assured or to provide the

services against which the deposit is received, the Government

may, in order to protect the interest of the depositors of such

Financial Establishment, after recording reasons in writing,

issue an order by publishing it in the Official Gazette,

attaching the money or other property believed to have been

acquired by such Financial Establishment either in its own

name or in the name of any other person from out of the

deposits, collected by the Financial Establishment, or if it

transpires that such money or other property is not available

for attachment or not sufficient for repayment of the deposits,

such other property of the said Financial Establishment or the

promoter, director, partner or manager or member of the said

Financial Establishment as the Government may think fit.

(2) On the Publication of the order under sub-section

(1), all the properties and assets of the Financial Establishment

and the persons mentioned therein shall forthwith vest in the

Competent Authority Appointed by the Government, pending

further order from the Designated Court.

(3) The Collector of a District shall be competent to

receive the complaints from his District under sub-section (1)

and he shall forward the same together with his report to the

Government at the earliest and shall send a copy of the

complaint also to the concerned District Police

Superintendent or Commissioner of Police, as the case may

be, for investigation.

5. Appointment of Competent Authority.— (1) The

Government may while issuing the order under sub-section

(1) of section 4, appoint any of its officers not below the rank

of the Deputy Collector, as the Competent Authority, to

exercise control over the monies and the properties attached

by the Government under section 4, of a Financial

Establishment.

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(2) The Competent Authority shall have such other

powers as may be necessary for carrying out the purposes of

this Act.

(3) The Competent Authority shall, within thirty days

from the date of the publication of the said order, apply to the

Designated Court, accompanied by one or more affidavits

stating the grounds on which the Government has issued the

said order under section 4 and the amount of money or other

property believed to have been acquired out of the deposits

and the details, if any, of persons in whose name such

property is believed to have been invested or acquired or any

other property attached under section 4, for such further

orders as found necessary.

6. Designated Court.— (1) For the purpose of this Act,

the Government may, with the concurrence of the Chief

Justice of the Bombay High Court by notification in the

Official Gazette, constitute one or more Designated Court in

the cadre of a District and Sessions Judge for such area or

areas or for such case or class or group of cases, as may be

specified in the notification.

(2) No court including the court constituted under the

Presidency Towns Insolvency Act, 1909 (3 of 1909) and the

Provincial Insolvency Act, 1920 (5 of 1920), other than the

Designated Court shall have jurisdiction in respect of any

matter to which the provisions of this Act apply.

(3) Any pending case in any other court to which the

provisions of this Act apply shall, on the date of coming into

force of this Act, stand transferred to the Designated Court.

7. Powers of Designated Court regarding attachment.—

(1) Upon receipt of an application under section 5, the

Designated Court shall issue to the Financial Establishment or

to any other person whose property is attached and vested in

the Competent Authority by the Government under section 4,

a notice accompanied by the application and affidavits and of

the evidence, if any, recorder, calling upon the said

Establishment or the said person to show cause on a date to

be specified in the notice, why the order of attachment should

not be made absolute.

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(2) The Designated Court shall also issue such notice, to

all other persons represented to it as having or being likely to

claim, any interest or title in the property of the Financial

Establishment or the person to whom the notice is issued

under sub-section (1), calling upon all such persons to appear

on the same date as that specified in the notice and make

objection if they so desire to the attachment of the property

or any portion thereof, on the ground that they have interest

in such property or portion thereof.

(3) Any person claiming an interest in the property

attached or any portion thereof may, notwithstanding that no

notice has been served upon him under this section, make an

objection as aforesaid to the Designated Court at any time

before an order is passed under sub-section (4) or sub-section

(6).

(4) The Designated Court shall, if no cause is shown

and no objections are made under sub-section (3), on or

before the specified date, forthwith pass an order making the

order of attachment absolute, and issue such direction as may

be necessary for realisation of the assets attached and for the

equitable distribution among the depositors of the money

realised from out of the property attached.

(5) If cause is shown or any objection is made as

aforesaid, the Designated Court shall proceed to investigate

the same and in so doing, as regards the examination of the

parties and in all other respects, the Designated Court shall,

subject to the provisions of this Act, follow the summary

procedure as contemplated under Order 37 of the Civil

Procedure Code, 1908 (5 of 1908) and exercise all the powers

of a court in hearing a suit under the said Code and any

person making an objection shall be required to adduce

evidence to show that on the date of the attachment he had

some interest in the property attached.

(6) After investigation under sub-section (5), the

Designated Court shall pass an order either making the order

of attachment passed under sub-section (1) of section 4

absolute or varying it by releasing a portion of the property

from attachment or cancelling the order of attachment:

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Provided that the Designated Court shall not release

from attachment any interest, which it is satisfied that the

Financial Establishment or the person referred to in sub-

section (1) has in the property, unless it is also satisfied that

there will remain under attachment an amount or property of

value not less than the value that is required for repayment to

the depositors of such Financial Establishment.”

19.A perusal of Section 32A of the IBC shows that a corporate

debtor cannot be prosecuted for offence committed prior to

commencement of the CIRP, from the date the resolution plan is

approved by the adjudicating authority under Section 31 of the

IBC, if the resolution plan results in change in the management or

control of the corporate debtor. Sub-section (2) of Section 32A

further provides that no action shall be taken against the property

of the corporate debtor in relation to such an offence committed

prior to the commencement of CIRP when such property is

covered under the resolution plan approved by the adjudicating

authority. The explanation to the aforesaid provision clarifies that

action against the property of the corporate debtor in relation to

an offence includes attachment, seizure, confiscation, etc. The

corporate debtor, despite the immunity is required to provide

assistance to the investigating authority in relation to such an

offence. Thus, a bare reading of the above quoted Section 32A of

the IBC makes it abundantly clear that neither can prosecution

against the corporate debtor be continued, nor can any action of

attachment, seizure, confiscation, etc. in respect of property of the

corporate debtor be continued, the moment the resolution plan is

approved by the adjudicating authority.

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20.The Supreme Court in the case of Manish Kumar vs. Union

of India & Anr. (supra) while considering the said provision of the

IBC, observed as follows :

“317. Section 32-A has been divided into three parts

consisting of sub-sections (1) to (3). Under sub-section (1),

notwithstanding anything contained, either in the Code or in

any other law, liability of a corporate debtor, for an offence

committed prior to the commencement of the CIRP, shall

cease. Further, the corporate debtor shall not be liable to be

prosecuted for such an offence. Both these immunities are

subject to the following conditions:

317.1. A resolution plan, in regard to the corporate debtor,

must be approved by the adjudicating authority under Section

31 of the Code.

317.2. The resolution plan, so approved, must result in the

change in the management or control of the corporate debtor.

317.3. The change in the management or control, under the

approved resolution plan, must not be in favour of a person,

who was a promoter, or in the management and control of the

corporate debtor, or in favour of a related party of the

corporate debtor.

317.4. The change in the management or control of the

corporate debtor must not be in favour of a person, with

regard to whom the relevant investigating authority has

material which leads it to entertain the reason to believe that

he had abetted or conspired for the commission of the offence

and has submitted or filed a report before the relevant

authority or the Court. This last limb may require a little

more demystification. The person, who comes to acquire the

management and control of the corporate person, must not be

a person who has abetted or conspired for the commission of

the offence committed by the corporate debtor prior to the

commencement of the CIRP. Therefore, abetting or

conspiracy by the person, who acquires management and

control of the corporate debtor, under a resolution plan,

which is approved under Section 31 of the Code and the filing

of the report, would remove the protective umbrella or

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immunity erected by Section 32-A in regard to an offence

committed by the corporate debtor before the commencement

of the CIRP. To make it even more clear, if either of the

conditions, namely, abetting or conspiring followed by the

report, which have been mentioned as aforesaid, are present,

then, the liability of the corporate debtor, for an offence

committed prior to the commencement of the CIRP, will

remain unaffected.

318. The first proviso in sub-section (1) declares that if there

is approval of a resolution plan under Section 31 and a

prosecution has been instituted during the CIRP against the

corporate debtor, the corporate debtor will stand discharged.

This is, however, subject to the condition that the

requirements in sub-section (1), which have been elaborated

by us, have been fulfilled. In other words, if under the

approved resolution plan, there is a change in the

management and control of the corporate debtor, to a person,

who is not a promoter, or in the management and control of

the corporate debtor, or a related party of the corporate

debtor, or the person who acquires control or management of

the corporate debtor, has neither abetted nor conspired in the

commission of the offence, then, the prosecution, if it is

instituted after the commencement of the CIRP and during its

pendency, will stand discharged against the corporate debtor.

Under the second proviso to sub-section (1), however, the

designated partner in respect of the liability partnership or the

officer in default, as defined under Section 2(60) of the

Companies Act, 2013, or every person, who was, in any

manner, in charge or responsible to the corporate debtor for

the conduct of its business, will continue to be liable to be

prosecuted and punished for the offence committed by the

corporate debtor. This is despite the extinguishment of the

criminal liability of the corporate debtor under sub-section

(1). Still further, every person, who was associated with the

corporate debtor in any manner, and, who was directly or

indirectly involved in the commission of such offence, in

terms of the report submitted and report filed by the

investigating authority, will continue to be liable to be

prosecuted and punished for the offence committed by the

corporate debtor.

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319. Thus, the combined reading of the various limbs of sub-

section (1) would show that while, on the one hand, the

corporate debtor is freed from the liability for any offence

committed before the commencement of the CIRP, the

statutory immunity from the consequences of the commission

of the offence by the corporate debtor is not available and the

criminal liability will continue to haunt the persons, who were

in charge of the assets of the corporate debtor, or who were

responsible for the conduct of its business or those who were

associated with the corporate debtor in any manner, and who

were directly or indirectly involved in the commission of the

offence, and they will continue to be liable.

320. Coming to sub-section (2) of Section 32-A, it declares a

bar against taking any action against property of the corporate

debtor. This bar also contemplates the connection between

the offence committed by the corporate debtor before the

commencement of the CIRP and the property of the

corporate debtor. This bar is conditional to the property being

covered under the resolution plan. The further requirement is

that a resolution plan must be approved by the adjudicating

authority and, finally, the approved plan, must result in a

change in control of the corporate debtor not to a person,

who is already identified and described in sub-section (1). In

other words, the requirements for invoking the bar against

proceeding against the property of the corporate debtor in

relation to an offence committed before the commencement

of the CIRP, are as follows:

320.1. There must be resolution plan, which is approved by

the adjudicating authority under Section 31 of the Code.

320.2. The approved resolution plan must result in the

change in control of the corporate debtor to a person, who

was not — (a) a promoter; (b) in the management or control

of the corporate debtor; or (c) a related party of the corporate

debtor; (d) a person with regard to whom the investigating

authority, had, on the basis of the material, reason to believe

that he has abetted or conspired for the commission of the

offence and has submitted a report or a complaint. If all these

aforesaid conditions are fulfilled then the law giver has

provided that no action can be taken against the property of

the corporate debtor in connection with the offence.

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321. The Explanation to sub-section (2) of Section 32-A has

clarified that the words “an action against the property of the

corporate debtor in relation to an offence”, would include the

attachment, seizure, retention or confiscation of such

property under the law applicable to the corporate debtor.

Since the word “include” is used under sub-clause (i) of the

Explanation, the word “action” against the property of the

corporate debtor is intended to have the widest possible

amplitude. There is a clear nexus with the object of the Code.

The other part of the clarification, under the Explanation, is

found in the second sub-clause of Explanation (ii).

322. Under the second limb of the Explanation to Section 32-

A(2), the law giver has clearly articulated the point that as far

as the property of any person, other than the corporate

debtor or any person who had acquired the property of the

corporate debtor through the CIRP or liquidation process

under the Code and who otherwise fulfils the requirement

under Section 32-A, action can be taken against the property

of such other person.

323. Thus, reading sub-section (1) and sub-section (2) of

Section 32-A together, two results emerge:

323.1. Subject to the requirements embedded in sub-section

(1) of Section 32-A, the liability of the corporate debtor for

the offence committed under the CIRP, will cease.

323.2. The property of the corporate debtor is protected from

any legal action again subject to the safeguards, which we

have indicated.

323.3. The bar against action against the property, is

available, not only to the corporate debtor but also to any

person who acquires property of the corporate debtor under

the CIRP or the liquidation process. The bar against action

against the property of the corporate debtor is also available

in the case of a person subject to the same limitation as

prescribed in sub-section (1) and also in sub-section (2), if he

has purchased the property of the corporate debtor in the

proceedings for the liquidation of the corporate debtor.”

21.In its judgment in the case of Ghanashyam Mishra and Sons

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Private Limited vs. Edelweiss Asset Reconstruction Company

Limited & Ors. (supra), the Supreme Court reiterated the position

that upon approval of the resolution plan, the corporate debtor

starts on a clean slate. Subsequently, in its judgment in the case of

Kalyani Transco vs. Bhushan Power and Steel Ltd. & Ors. (supra),

the Supreme Court further referred to Section 32A of the IBC and

observed as follows :

“117. It can thus be seen that section 32A of the IBC which

begins with a non obstante clause provides that the liability of

the corporate debtor for an offence committed prior to the

commencement of the CIRP shall cease, and the corporate

debtor shall not be prosecuted for such an offence from the

date the resolution plan has been approved by the

Adjudicating Authority under section 31 of the IBC, if the

resolution plan results in the change in the management or

control of the corporate debtor or if the erstwhile promoter

or any other person who has been retained has not been

found to have abetted or conspired in the commission of the

offence. It further provides that no action shall be taken

against the properties of the corporate debtor in relation to an

offence committed prior to the commencement of the CIRP

of the corporate debtor, where such property is covered under

a resolution plan approved by the Adjudicating Authority

under section 31 of the IBC.”

22.This Court followed the said position of law in its judgment

in case of Shiv Charan & Ors. vs. Adjudicating Authority (supra).

In the said judgment, it was observed as follows :

“20. Therefore, as a matter of law, once the resolution plan is

approved with the attendant conditions set out in Section 32A

being met, further prosecution against the corporate debtor

and its properties, would cease. Section 32A(3) enjoins the

corporate debtor to continue to cooperate with the

enforcement agencies in the continued prosecution against the

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individuals in question.”

23.We are of the opinion that even if leave has been granted in

the Special Leave Petition filed against the said judgment and

interim order has been granted, the purport of Section 32A of the

IBC is made abundantly clear by the Supreme Court in the

aforementioned judgments in the cases of Manish Kumar vs.

Union of India & Anr. (supra) and Kalyani Transco vs. Bhushan

Power and Steel Ltd. & Ors. (supra).

24.Much emphasis was placed on behalf of the respondents-

State on the judgment of the Supreme Court in the case of

National Spot Exchange Limited vs. Union of India & Ors.

(supra). A perusal of the said judgment shows that the questions

framed for consideration in the said judgment concerned the effect

of moratorium under Section 14 of the IBC in respect of execution

of decrees against judgment debtors, where the properties of the

judgment debtors were attached under the provisions of the MPID

Act. The Supreme Court was not considering the effect of Section

32A of the IBC and the discussion with respect to the interplay

between the provisions of the IBC and the MPID Act was not in

the context of Section 32A of the IBC. Yet, the learned AGP

emphasized that the Supreme Court had made observations about

the effect of an order of attachment under Section 4 of the MPID

Act, indicating that the property had vested in the competent

authority. On this basis, it was contended that once the property

stood vested with the competent authority under the MPID Act,

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there was no question of the said property being part of the

resolution plan and that it could not be considered as a property

of the corporate debtor for attracting the provisions of Section

32A of the IBC.

25.We find the said argument to be fallacious for the reason

that a proper reading of Sections 4 to 7 of the MPID Act, quoted

hereinabove, would show that ‘vesting’ of the properties occurs

only after the designated Court passes an order under Section 7 of

the MPID Act, making absolute the order of attachment passed

under Section 4(1) thereof. It is pertinent to note that sub-section

(2) of Section 4 of the MPID Act specifically records that the

property made subject matter of the order of attachment under

sub-section (1) vests in the competent authority ‘pending further

orders from the designated Court’. Thus, the process of vesting is

still inchoate and it achieves finality only upon the designated

Court passing an order under Section 7 of the MPID Act, for

making absolute the order of attachment issued under Section 4(1)

thereof. Thus, the contention raised on behalf of the respondents-

State that upon issuance of the impugned notification dated

19.03.2016, attaching the subject property, it vested in the

competent authority under the MPID Act, is rejected.

26.Once this finding is reached, we find that there is no

substance in the contention raised on behalf of the respondents-

State that the subject property was not available with the

corporate debtor at the stage of approval of the resolution plan.

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We also do not find much substance in the contention raised on

behalf of the respondents that, in view of paragraph 8(g) of the

order dated 17.09.2024 passed by the NCLT, approving the

resolution plan, the subject property could not be said to be part

of the resolution plan. A proper reading of the said order,

including paragraph 8 thereof, shows that the NCLT thought it fit

to call upon the successful resolution applicant to approach the

competent authority i.e. the designated Court under the MPID Act

for lifting of the attachment. When as a matter of law and by

operation of Section 32A of the IBC, the attachment could no

longer continue, particularly in the absence of any order being

passed by the designated Court under Section 7 of the MPID Act,

making the order of attachment absolute, there was no question of

the subject property not being part of the resolution plan or the

full effect of Section 32A of the IBC not coming into play.

27.Since the effect of Section 32A of the IBC, on a bare reading

of the said provision and the position of law being elaborately

clarified by the Supreme Court, is essentially a pure question of

law, we find that the petitioner is clearly entitled to press for relief

in this writ petition itself. Merely because the NCLT in the said

order dated 17.09.2024 reserved liberty for the successful

resolution applicant to approach the competent authority under

the MPID Act for lifting of attachment, would not adversely affect

the power of this Court under writ jurisdiction to entertain the

present writ petition. In this context, we find substance in reliance

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placed on behalf of the petitioner on the judgment of the Supreme

Court in the case of Godrej Sara Lee Ltd. vs. Excise and Taxation

Officer-cum-Assessing Authority & Ors. (supra). In paragraph 8 of

the said judgment, the Supreme Court observed as follows :

“8.That apart, we may also usefully refer to the decisions

of this Court reported in (1977) 2 SCC 724 (State of U. P. v.

Indian Hume Pipe Co. Ltd.) and (2000) 10 SCC 482 (Union

of India v. State of Haryana). What appears on a plain reading

of the former decision is that whether a certain item falls

within an entry in a sales tax statute, raises a pure question of

law and if investigation into facts is unnecessary, the High

Court could entertain a writ petition in its discretion even

though the alternative remedy was not availed of ; and, unless

exercise of discretion is shown to be unreasonable or perverse,

this Court would not interfere. In the latter decision, this

court found the issue raised by the appellant to be pristinely

legal requiring determination by the High Court without

putting the appellant through the mill of statutory appeals in

the hierarchy. What follows from the said decisions is that

where the controversy is a purely legal one and it does not

involve disputed questions of fact but only questions of law,

then it should be decided by the High Court instead of

dismissing the writ petition on the ground of an alternative

remedy being available.”

28.We further find that in the present case, it is an admitted

position that neither at the stage of the registration of the FIR nor

at the filing of the charge-sheet was the corporate debtor ever

made an accused in the criminal proceedings that led to issuance

of the order of attachment dated 19.03.2016 under the MPID Act.

The respondents-State admitted the position that the corporate

debtor is not an accused. It was also conceded that the designated

Court has not passed any order under Section 7 of the MPID Act,

making absolute the order of attachment of the subject property.

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The corporate debtor upon approval of the resolution plan

satisfies all the requirements of Section 32A of the IBC and there

can be no dispute about the same. Therefore, the logical

consequence thereof must follow and there ought to be no

impediment in releasing the subject property from attachment, so

that the corporate debtor proceeds on a clean slate, in line with

the objects and reasons of enactment of the IBC. Although, the

learned AGP sought to indicate that the objects and reasons for

enactment of the MPID Act were clearly distinct from those of the

IBC and that the protection of investors ought to be given higher

priority by this Court, we are not impressed with the said

contention in the light of the facts and circumstances of the

present case, wherein the corporate debtor is not even an accused

in the said offences and Section 32A of the IBC must apply in full

force in terms of the law laid down by the Supreme Court.

29.As noted hereinabove, by interim order dated 04.11.2025,

the attachment of the property was already released by way of

interim order, subject to the petitioner furnishing bank guarantee

of Rs.74.24 lakhs with this Court. Since we have reached the

conclusion that the writ petition deserves to be allowed and the

attachment cannot continue in the light of the operation of

Section 32A of the IBC, the interim order is made absolute and the

impugned notification dated 19.03.2016, to the extent that it

applies to the subject property, is quashed and set aside.

30.Consequently, the Registry of this Court is directed to return

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the bank guarantee to the petitioner, in the light of the writ

petition being allowed in the above terms.

31.The writ petition is disposed of. Pending applications also

stand disposed of.

(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)