NCLT Mumbai: Liquidator Must Preserve Assets Despite PMLA Attachment

The NCLT Mumbai held that a liquidator is duty-bound to preserve and protect the assets of a corporate debtor even if they are attached under the Prevention of Money Laundering Act (PMLA), until they are confiscated.

The tribunal clarified that attachment does not amount to transfer of ownership, and such assets continue to remain part of the liquidation estate.

It further observed that expenses incurred for maintaining and preserving these assets, including statutory dues, would qualify as liquidation costs under the Insolvency and Bankruptcy Code.

[Kohinoor City Office Towers Industrial Estate & Premises Co-op. Society Ltd. v. Mr. Santanu T. Ray, the Liquidator of Firestar Diamond International Pvt. Ltd. & Anr.]