Delhi High Court Upholds Attachment Of Lawyer Gautam Khaitan's Properties In AgustaWestland Case

The Delhi High Court has recently upheld the Enforcement Directorate's (ED) provisional attachment of properties belonging to lawyer Gautam Khaitan, rejecting his challenge to the action in the AgustaWestland VVIP helicopter deal. The bench, comprising Justice Anil Ksheterpal and Justice Harish Vaidyanathan Shankar dismissed Khaitan's appeal against a February 2015 Singe Judge order that had dismissed his plea against the ED attachment. The court emphasized that it has a limited role in exercising writ jurisdiction in the early stages "in cases where there is a clear demonstration of mala fide exercise of power, patent arbitrariness, or a manifest lack of jurisdiction" The court also rejected Khaitan's plea that ED cannot attach property unless formal charges are filed. It emphasized that the law allows attachment of property if there are credible reasons to believe that the property is linked to an illegal activity. Relying on its own decision in Directorate of Enforcement v. Hi-tech Merchantile India Pvt. Ltd, the court observed that while compliance is required under Section 5(1) of the PMLA for initiating attachment, it should not be interpreted as the only condition. Failure to comply with this proviso does not automatically make the provisional attachment order invalid or ineffective."In substance, it was observed that while the first proviso to Section 5(1) of the PMLA constitutes a statutory pre-requisite for initiating an attachment, it is not to be construed that the compliance of the said proviso is a sole pre-requisite for issuance of PAO, which if not complied with would render the attachment proceedings invalid or ineffectual."The court agreed with the Single Judge's finding that, after the removal of the former clause 'b' from Section 5(1) of the PMLA, it is no longer required that a person subject to a provisional attachment order must have already been charged with a scheduled offence. "The LSJ has rightly observed that following the omission of the erstwhile clause „b‟ of Section 5(1) of the PMLA, it is no longer mandatory that a person against whom a PAO is issued must have necessarily been charged with a scheduled offence. Since, the LSJ has examined the issue in exhaustive detail, this Court does not consider it necessary to revisit and re-examine the same, particularly, since in view of this Court, the conclusion reached by the LSJ are in complete harmony with the scheme and legislative intent of the Act"The case dates back to the Indian Air Force's plan in 2000s to replace MI-8 VIP helicopters. AgustaWestland won the contract after the service ceiling requirement was reduced from 6,000 meters to 4,500 meters. Investigations alleged that kickbacks from AgustaWestland were routed through Indian companies, including IDS India and Aeromatrix Info Solution Ltd., with Gautam Khaitan facilitating introductions between foreign and Indian officials. Following a CBI case, the ED issued the attachment order on November 15, 2014, under the Prevention of Money Laundering Act (PMLA). Khaitan argued the attachment was illegal since no charges had been filed, and there was insufficient material to form a 'reason to believe.' The ED maintained that the law permits attachment against any person in possession of proceeds of crime and that the records demonstrated money flowing into Khaitan-controlled entities during the relevant period. The High Court agreed with the Single Judge that the attachment was lawful. It observed that a Provisional Attachment Order is "is a tentative measure undertaken to safeguard the integrity of future proceedings under the PMLA". It also noted that the ED focused only on properties acquired between 2009 and 2014, aligning with the alleged money-laundering period. Accordingly, it dismissed Khaitan's plea challenging single judge order.Case Title: Gautam Khaitan v Union of IndiaCitation: 2025 LiveLaw (Del) 1515Case Number: LPA 72/2015For Appellant: Senior Advocate Ramesh Singh, Senior with Advocates Roopa Dayal and Shubham JindalFor Respondents: Advocate Himanshu Pathak, SPC along with Advpcate Amit Singh Advocate for UOI; Advocate Zoheb Hossain, Special Counsel for ED; Advpcate Vivek Gurnani - Panel counsel for ED along with Advocates Kartik Sabhwal, Pranjal Tripathi, Kanishk Maurya and S K Raqueeb, Advocates.Click Here To Read/Download Order

Delhi High Court Upholds Attachment Of Lawyer Gautam Khaitan's Properties In AgustaWestland Case

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Delhi High Court Upholds Attachment Of Lawyer Gautam Khaitan's Properties In AgustaWestland Case

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