IBBI Mandates Undertaking for IP’s Seeking Restitution of Assets from Special Courts Under the PMLA

The Insolvency and Bankruptcy Board of India (IBBI) issued a circular dated November 4, 2025 concerning the procedure for Insolvency Professionals (IP’s) seeking the restitution of assets attached by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act,2002 (PMLA).

The aim of the notification is to address the cases where the assets of the corporate debtor have been under the attachment of the ED. The restitution of assets of the corporate debtor would enhance its value, leading to higher realization. The IBBI has therefore advised to file an application before the Special Court under Section 8(7) and 8(8) of the PMLA for the restitution of the assets. Further, with a view to facilitate the expeditious disposal of such applications by the Special Courts, the IBBI has formulated a standard undertaking to be furnished by the IP along with the application for restitution of assets. 

Key Obligations under the undertaking:

1. Restriction on Usage and Transfer: The restituted assets shall not be sold, transferred, or disposed in any manner, directly or indirectly, to any person who has been covered under Section 32A (i) or (ii) of the IBC, subject to the promoter being ineligible under Section 29A of the IBC.

2. Periodic Reporting: The IP shall be responsible to submit a quarterly report to the Special Court until the time the resolution plan / dissolution order is issued. The report made shall be detailed with the status, usage, monetisation, and sale / transfer of the asset with the list of beneficiaries on such distribution.

3. Co-operation and Disclosure: The IP shall fully cooperate to the ED, and assist them by providing details of PUFE transactions, details of the CoC with their constitution and voting rights, and details of the SRA with copy of application and orders of the NCLT. The details of all properties under ED attachment are disclosed in the Information Memorandum.

4. Document Production: The documents which are not commercially sensitive must be presented with immediate effect, however, the commercially sensitive data shall be provided on the acknowledgement by the ED in writing.

In conclusion, the IBBI’s circular mandating undertakings for restitution of assets under PMLA creates a structured bridge between insolvency and anti-money laundering regimes, ensuring that recovered assets are safeguarded from misuse, transparently reported, and effectively deployed for resolution. This not only strengthens creditor recoveries and corporate debtor viability, but also enhances institutional trust by aligning the interests of the ED, Special Courts, and insolvency stakeholders, thereby reinforcing the integrity and efficiency of the insolvency framework.