Confirmation Of Attachment Under PMLA Does Not Authorize Property Retention, Valid Order Must: Delhi High Court

The Delhi High Court has observed that the confirmation of attachment of property involved in money laundering under Section 8(3) of PMLA does not authorize retention of such a property, as the process requires a valid order to be passed under Section 20. A division bench comprising Justice Subramonium Prasad and Justice Harish Vaidyanathan Shankar said that the procedural safeguards contained in Section 20, which deals with retention of property, are substantive in character and cannot be bypassed. “We are of the firm opinion that Section 8(3) of the PMLA only governs confirmation; it does not, of itself, authorize the retention of property, and therefore, a valid order under Section 20 is a necessary precondition before Section 8(3) of the PMLA can be invoked,” the Court said. It added that resorting to Section 8 of PMLA, without recording independent reasons, forwarding retention order to the Adjudicating Authority, adhering to the 180 day limit and the Authority's satisfaction as to “prima facie involvement is invalid and void ab initio.“The statutory scheme of the PMLA thus embeds multiple layers of oversight as Section 17 authorises search and seizure; Section 20 provides for retention based on a reasoned and independent order for up to 180 days; and Section 8 sets the adjudicatory framework for confirmation and continuation. Any attempt to directly invoke Section 8(3) without compliance with Section 20 is impermissible,” the Bench held. The Court allowed the appeal filed by one Anirudh Pratap Agarwal, challenging an order passed by the Appellate Tribunal (PMLA), dismissing his appeal filed under Section 26 of the PMLA. The Adjudicating Authority had allowed ED's application seeking retention of Agarwal's seized properties. Setting aside the Appellate Tribunal's order, the Bench said that no order under Section 20 was passed by the ED in relation to the initial 180-day retention of Agarwal's property, nor was any such order communicated to the Authority, as mandatorily required. “Despite this non-compliance, the Appellant's property continued to remain under retention until the conclusion of adjudication proceedings under Section 8 of the PMLA. Such conduct is not only procedurally flawed but also a clear violation of the safeguards enshrined in the PMLA,” the Court said. It added that while PMLA equips ED with robust enforcement powers to address money laundering, it simultaneously incorporates substantive procedural safeguards at every stage to protect constitutional rights and ensure judicial scrutiny. “Compliance with Sections 17, 20, and 8 of the PMLA is not a mere formality but a statutory mandate. Any deviation from this framework renders the retention order void. Only by rigorously adhering to these safeguards can the PMLA preserve both the integrity of its enforcement regime and the constitutional guarantee of property rights under Article 300A of the Constitution of India,” it concluded.Title: ANIRUDH PRATAP AGARWAL v. ENFORCEMENT DIRECTORATECitation: 2025 LiveLaw (Del) 1199Click here to read order

Confirmation Of Attachment Under PMLA Does Not Authorize Property Retention, Valid Order Must: Delhi High Court

Nupur Thapliyal

Tags