(a) General rule.--Where a certificate of approval has been issued by the department or has been deemed issued under section 8206 (relating to effect of failure of timely action by department) or, in the case of tax anticipation notes, where the filing with the department required by section 8128 (relating to condition precedent to validity of tax anticipation notes) has occurred and no petition for a declaratory order or complaint has been filed within the applicable time limits specified in section 8211 (relating to petitions for declaratory orders and complaints to the department) or when, after a petition for a declaratory order or complaint has been filed, the proceedings have been approved finally by the department and no appeal to court has been taken, or if an appeal to court has been taken and the proceedings have been approved finally by the court or the appeal has been dismissed, the validity of the proceedings, the right of the local government unit lawfully to issue its bonds or notes or to enter into a lease, guaranty, subsidy contract or other agreement evidencing lease rental debt pursuant to those proceedings, and the validity and due enforceability of the bonds, notes or other instruments in accordance with their terms shall not thereafter be inquired into judicially, in equity, at law or by civil or criminal proceedings, or otherwise, either directly or collaterally. The effect of the approval by the department or by the court on appeal or, in the case of tax anticipation notes, the effect of filing in compliance with section 8128 shall be to ratify, validate and confirm the proceedings absolutely, including the lawful nature of the project and, in the case of tax anticipation notes, the accuracy of the estimates contained in the certificate as to taxes and revenues to be collected, notwithstanding any defect or error in the proceedings, except as specifically provided otherwise in this section, and any debt limit imposed by this subpart shall be deemed increased to the extent necessary to validate the debt or obligation. This section does not relieve an initial purchaser of bonds or notes from liability to a local government unit for the payment of the consideration agreed in the contract of sale or make the bonds or notes valid and enforceable in the hands of an initial purchaser unless the issuer has received a substantial consideration for the series as a whole.

(b) Liability for willful violations or fraud.--This section does not relieve any person participating in the proceedings from liability for knowingly participating in an ultra vires act of a local government unit or from any civil or criminal liability for false statements in any certificates filed or delivered in the proceedings.