IBBI Mandates Standard Undertaking for Restitution of ED-Attached Assets Under PMLA
- REEDLAW
- 3 hours ago
- 2 min read
REEDLAW Legal News Network reports: In a significant regulatory development, the Insolvency and Bankruptcy Board of India (IBBI) has issued Circular No. IBBI/CIRP/87/2025, dated 4 November 2025, mandating all Registered Insolvency Professionals (IPs) to file a standard undertaking before Special Courts under the Prevention of Money Laundering Act, 2002 (PMLA), when seeking restitution of assets attached by the Enforcement Directorate (ED). This directive aims to standardise the restitution process, ensure full accountability, and facilitate smoother coordination between insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) and PMLA enforcement actions.
Issued in consultation with the Enforcement Directorate, the circular introduces a uniform undertaking format for applications under Sections 8(7) or 8(8) of the PMLA. Insolvency Professionals must:
Ensure restituted assets are neither transferred nor utilised for the benefit of persons disqualified under Section 29A of the IBC or accused in the predicate offence.
Submit quarterly status reports to the Special Court regarding the use and distribution of restituted assets.
Fully disclose attached properties in the Information Memorandum or auction notice, updating disclosures as new information emerges.
Cooperate with ED investigations by providing details of PUFE transactions, the Committee of Creditors composition, and the Successful Resolution Applicants.
Share commercially sensitive documents only after ED formally acknowledges their sensitivity.
The obligations under the undertaking remain in force until the resolution plan or dissolution order receives approval from the Adjudicating Authority, ensuring transparency and value maximisation throughout the insolvency process.
This directive is expected to accelerate court approval timelines, maximise recoveries for creditors—including banks and homebuyers—and safeguard against misuse of restituted assets.
For further details, download the official IBBI circular and the standard undertaking annexed thereto.
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