Overview
- The IBBI issued a November 4 circular prescribing a standard undertaking for insolvency professionals, followed by ED confirmation on November 5–6 that the mechanism is in force.
- Resolution professionals can now apply under Sections 8(7) and 8(8) of the PMLA before special courts to seek restitution of attached assets during CIRP or liquidation.
- Restituted property must be used solely for creditors such as banks and cheated homebuyers, with safeguards to ensure no benefit flows to accused promoters.
- The undertaking requires quarterly reports to the special court, disclosure of ED-attached properties in information memoranda and auction notices, and cooperation with ED investigations including PUFE findings and CoC details.
- ED data notes ₹34,580 crore has been restituted to date, while experts welcome the harmonisation but caution that initial attachments continue and added compliance may lengthen timelines depending on court practice.