HC stays order on Returning Property Seized under PMLA if no Proceedings after 365 days

The Delhi High Court on Thursday stayed a single bench order which held that property seized under the Prevention of Money Laundering Act (PMLA) must be returned if the investigation does not result in any proceedings within 365 days.

A division bench of Acting Chief Justice Manmohan and Justice Manmeet PS Arora stayed the January 31 order passed by a single judge of the high court till March 11, the next date of hearing.

The division bench was hearing an appeal filed by the Enforcement Directorate (ED) challenging the single judge’s order.

Additional Solicitor General (ASG) SV Raju, representing the ED, argued that the single judge’s verdict had several flaws and sought a stay on the findings, apprehending that the judgment may be treated as a precedent.

The single judge had said continuation of a seizure beyond 365 days, in the absence of the pendency of any proceedings relating to any offence before a court, shall be confiscatory in nature and without the authority of law and violative of Article 300A of the Constitution.

Article 300A says no person shall be deprived of his property save by authority of law.

The decision had come on a petition filed by the resolution professional of Bhushan Power and Steel Limited (BPSL) against continued seizure of various documents, records, digital devices and gold and diamond jewellery having an aggregate value of more than Rs 85 lakh from his premises in a money laundering case.

In the absence of any proceedings in relation to the seized property, the single judge had directed the authorities to return the items to the petitioner.

Before the single judge, the agency had argued that the seizure has to continue during the pendency of the proceedings before the trial court after a prosecution complaint has been filed before the court concerned, irrespective of whether it has arrayed the petitioner as an accused or not.

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