The Supreme Court of India has ruled that the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) do not have jurisdiction to review actions taken by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). This decision arose from the Bhushan Power and Steel Limited (BPSL) insolvency case, where the NCLAT had stayed a provisional attachment order by the ED against BPSL’s assets. The Supreme Court disapproved of this, emphasizing that the NCLT and NCLAT cannot interfere with statutory authorities’ actions under public law statutes like the PMLA .

In a related development, the Supreme Court also quashed JSW Steel’s ₹19,700 crore resolution plan for BPSL, declaring it “illegal” and ordering the company’s liquidation. The Court found that the plan violated provisions of the Insolvency and Bankruptcy Code (IBC), primarily because it was funded through a mix of equity and optionally convertible debentures instead of equity alone, and failed to implement the resolution within the stipulated timeline .

These rulings clarify the distinct jurisdictions of the IBC and PMLA, reinforcing that actions under the PMLA cannot be overridden by insolvency proceedings under the IBC.

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