Alerts & Updates 15th May 2025
In a move that further unsettles the already fragile expectations of secured creditors in India, the Hon’ble Supreme Court has delivered a fresh blow following the Bhushan Power & Steel Ltd. (BPSL) case. In its latest ruling in National Spot Exchange Ltd. v. Union of India & Ors. (decided on 15 May 2025), the Court held that secured creditors cannot claim priority over properties attached under statutes such as the Prevention of Money Laundering Act, 2002 (PMLA) and the Maharashtra Protection of Investors and Depositors Act, 1999 (MPID Act), even where such creditors hold registered security interests under SARFAESI or RDB Acts. The Court further held that such attachments, if made prior to the commencement of moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC), are not impacted by Section 14 or 96 IBC. The judgment follows the unsettling precedent of the BPSL ruling where the resolution plan was set aside years after implementation, raising urgent questions about the robustness and predictability of secured creditor rights in India.
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