The Delhi High Court has set aside an order passed by the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA), holding that a search under Section 17 of the Act is not restricted only to the premises of persons named as accused in a prior scheduled offence report or complaint.
The Division Bench comprising Justice Vivek Chaudhary and Justice Manoj Jain, in a judgment delivered on November 21, 2025, clarified the scope of search and seizure provisions under the PMLA while remanding a matter involving the seizure of assets from the premises of the late Amlendu Pandey.
The Directorate of Enforcement (ED) filed an appeal under Section 42 of the PMLA, 2002, challenging the order dated May 21, 2019, passed by the Appellate Tribunal, PMLA. The Tribunal had directed the de-freezing of properties belonging to the respondent, Amlendu Pandey (since deceased, represented by his Legal Representative).
The central legal issue before the High Court was whether the confirmation of retention of seized property was sustainable, given the Appellate Tribunal’s observation that there was no “prosecution complaint” against the respondent at the material time. The High Court held that the Tribunal’s reasoning was “based on misreading” of the provisions, specifically Section 17 of the PMLA.
Background of the Case
The case stems from investigations initiated by the ED following Income Tax Department raids on Mr. Hassan Ali Khan and his associates in January 2007. These searches revealed various foreign bank accounts, leading the ED to register a criminal case for scheduled offences punishable under Sections 467, 420, and 471 of the Indian Penal Code, 1860, read with Sections 10(3) and 12(1) of the Indian Passports Act, 1967.
While Mr. Hassan Ali Khan and others were arrested and a prosecution complaint was filed in 2011, the ED continued its investigation. On February 9, 2016, a search was conducted under Section 17 of the PMLA at the premises of the respondent, Amlendu Pandey. During this search, a laptop, pen-drive, mobile phones, and cash amounting to Rs. 26.30 lacs were recovered.
The Adjudicating Authority confirmed the retention of the seized items on June 28, 2016. Mr. Pandey challenged this confirmation before the Appellate Tribunal under Section 26 of the PMLA. During the pendency of the appeal, Mr. Pandey passed away in 2017, and his daughter was impleaded as his Legal Representative.
The Appellate Tribunal’s Decision
The Appellate Tribunal allowed the appeal on May 21, 2019, directing the de-freezing of the property. The High Court observed that the Tribunal, “ostensibly, got swayed away by the fact that there was no ‘prosecution complaint’ against respondent Mr. Amlendu Pandey.”
The High Court noted that this ground was taken by the Tribunal despite the fact that “no such argument was even raised by the respondent in his appeal filed before the learned Appellate Tribunal.”
Arguments and Proceedings
The ED, represented by Special Counsel Mr. Zoheb Hossain, argued that a supplementary complaint had indeed been filed on July 17, 2018, during the pendency of the appeal, wherein the respondent was mentioned to have admitted to facilitating Mr. Hassan Ali Khan.
The respondent had originally contended before the Adjudicating Authority that the cash was legitimate earnings from cultivation and a mango orchard, and that the electronic devices contained no incriminating material.
High Court’s Analysis: Scope of Section 17 PMLA
The Division Bench undertook a detailed analysis of Section 17 (Search and Seizure) versus Section 5 (Attachment of Property) of the PMLA.
The Court observed that Section 17 has a wider ambit than Section 5. The Judges stated: “Scope of any search and seizure made under Section 17 of PMLA is much wider as it does not, merely, relate to possession of proceeds of crime but takes in its ambit any person who has committed any act which constitutes money laundering or is in possession any records relating to money laundering or is in possession of any property related to crime.”
Addressing the Tribunal’s reasoning regarding the absence of a complaint against the respondent, the Court clarified the pre-conditions for a search under the unamended Section 17 (applicable to this case).
The Bench held: “Section 17 of PMLA does not lay down that the search can be carried out in the premises of that person alone qua whom a complaint has been filed or report had been forwarded to the concerned Magisterial Court. The pre-condition is of ‘prior institution of complaint or forwarding of a report under Section 157 Cr.P.C’. There is no mandate that search should also be of the person shown accused in such report or complaint.”
The Court further observed: “A person may be in possession of proceeds of crime but still may not be accused of any scheduled offence or offence of money laundering. In a given situation, a person can be recipient of proceeds of crime, without having any criminal intent and, therefore, it is not necessary that any such person should be an accused in a prior complaint or report.”
The Court found that since a complaint against the alleged co-accused had been filed in 2011, the pre-condition for the 2016 search was met. The contention that no complaint was pending against the deceased respondent specifically was termed “completely fallacious and misplaced” by the Court.
Decision
The High Court set aside the impugned order dated May 21, 2019.
However, the Court noted the submission of the counsel for the respondent, Mr. S.K. Das, that the Tribunal had not considered the other grounds regarding the legitimacy of the possession of cash and its nexus with the crime. The ED’s counsel expressed no objection to the matter being reconsidered on merits.
Consequently, the High Court remanded the matter to the Appellate Tribunal “to consider the appeal afresh and to decide the same in accordance with law, after giving due opportunity of hearing to both the sides.”
The appeal was disposed of with the aforesaid terms.
