Ancestral Or Inherited Properties Can Be Attached Under PMLA: Delhi High Court

The Delhi High Court has held that ancestral or inherited properties can be attached under the Prevention of Money Laundering Act, 2002.“The statute does not carve out an exception for ancestral or inherited properties, and thus, they are not immune from attachment,” a division bench comprising Justice Navin Chawla and Justice Ravinder Dudeja said. The Court dismissed an appeal filed by one Arun Suri challenging the attachment of a residential property in Pitampura by the Directorate of Enforcement.The appeal was filed under Section 42 of the PMLA against an order of the Appellate Tribunal which had upheld the confirmation of a provisional attachment order issued in July, 2017. Suri contended that the property was purchased in 1991 by his father from his own income in their joint names and he had made no financial contribution toward its acquisition.It was his case that since the property was not purchased from alleged proceeds of crime, it could not be attached under Section 2(1)(u) of the PMLA. On the other hand, the ED contended that the actual proceeds of crime had been remitted abroad and were not traceable, and therefore the property was attached as “equivalent value” under the statute. At the outset, the Bench noted that the competent authority under Section 5 of the PMLA is empowered to provisionally attach property believed to be proceeds of crime.The Court said that where ED is unable to discover the tainted property, it may proceed to attach even an “untainted property equivalent in value.”The Court said that the argument of the property being ancestral does not ipso facto grants immunity from attachment under the PMLA.“The statute does not carve out an exception for ancestral or inherited properties, and thus, they are not immune from attachment. The argument that ancestral property cannot be attached unless purchased from illicit funds, is misconceived and contrary to the scheme of PMLA,” the Court said. Title: ARUN SURI v. DIRECTORATE OF ENFORCEMENTClick here to read order

Ancestral Or Inherited Properties Can Be Attached Under PMLA: Delhi High Court

Nupur Thapliyal

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