Dwarka Iron Industries Pvt. Ltd. v. Competent Authority (under MPID Act, 1999) & Anr
Section 32A of the IBC, which begins with a non obstante clause, ends the corporate debtor's liability and bars any action including attachment against its property covered by an approved resolution plan once control passes to a person who is not a promoter, related party or accused; an MPID Act attachment is inchoate until the Designated Court makes it absolute, so the property had not vested in the Competent Authority and remained part of the plan.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-10-05
Dwarka Iron Industries, the successful resolution applicant for Abhirama Steels Limited, asked the High Court to release land that the State had attached under the MPID Act in a fraud case in which the company was never an accused. The Court held section 32A of the IBC protected the property once the plan was approved.
What happened
Abhirama Steels bought Survey No. 272/1 at Chityala Village, Pargi Mandal, Rangareddy on 6 September 2008 and mortgaged it to Indian Bank in 2010. The Economic Offences Wing registered C.R. No. 168 of 2013 against Birla Power Solutions Ltd., and the corporate debtor was never an accused though a charge-sheet in 2014 named the father of its Managing Director. On 19 March 2016 the State issued a notification under section 4 of the Maharashtra Protection of Interest of Depositors Act, 1999 attaching properties including this land, and the company objected on 19 August 2016. The NCLT, Hyderabad admitted the CIRP on 16 November 2021, the NCLAT dismissed the appeal on 8 July 2022, the Supreme Court on 26 February 2024, and on 17 September 2024 the NCLT approved the plan; on 9 October 2024 the applicant paid Rs.14.50 crores to Indian Bank in full settlement. The NCLT order, at paragraph 8(g), left the applicant to ask the Competent Authority to lift the attachment. The High Court released the property on 4 November 2025 on a bank guarantee. The State relied on National Spot Exchange to say the property had vested in the Competent Authority and left the debtor.
Questions before the court
- After approval of a resolution plan, can an MPID Act attachment of the corporate debtor's property continue, and can the High Court decide this in a writ?
Why the court ruled this way
Section 32A(1) ends the debtor's liability and prosecution and 32A(2) bars any action, including attachment, against property covered under an approved plan where control passes to a person who is not a promoter, related party or person against whom a report has been filed; Manish Kumar v. Union of India, Ghanashyam Mishra and Sons v. Edelweiss ARC, Kalyani Transco v. Bhushan Power and Steel and Shiv Charan v. Adjudicating Authority apply, and the pending Supreme Court leave in Shiv Charan did not change this (paragraphs 19 to 23). National Spot Exchange concerned moratorium and decree execution, not the MPID Act (paragraph 24). Under sections 4 to 7 the property vests in the Competent Authority only 'pending further orders' and the vesting becomes final when the Designated Court makes the attachment absolute, which had not happened (paragraph 25). Paragraph 8(g) of the NCLT order did not exclude the property from the plan (paragraph 26). A pure question of law can be decided in a writ despite the liberty given, following Godrej Sara Lee (paragraph 27). The corporate debtor was never an accused and the State conceded this (paragraph 28).
Controlling point
The attachment under the MPID Act could not continue after approval of the resolution plan, and the property was to be released.
Order and next steps
The writ petition was allowed; the interim order was made absolute and the notification of 19 March 2016 was quashed and set aside as it applied to the subject property; the Registry was directed to return the bank guarantee to the petitioner.
Practical implications
A successful resolution applicant holding property attached under a depositor-protection law can invoke section 32A(2) to have the attachment lifted when the corporate debtor was not an accused and the plan is approved.
Limits of this ruling
- The Court proceeded because the Designated Court had not made the attachment absolute and the corporate debtor was not an accused; it did not decide the position for property already vested after an absolute order or where the new control is with a promoter or related party. A Supreme Court appeal in Shiv Charan remains pending with interim orders.
Law and judgment source
- Insolvency and Bankruptcy Code, 2016, sections 31 and 32A
- Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, sections 4, 5, 6 and 7
- Constitution of India, article 226
The linked PDF is a complete public court-copy document. The official court portal is provided for independent verification; a stable judgment-specific official link was not independently established.
Source checked: 2026-10-05 · Judgment paragraphs: paragraphs 1-31 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
This page is informational. Verify the current official court record, subsequent history and applicable law, and obtain professional advice for a specific matter.