Delhi High Court Sets Aside Tribunal's Decision, Orders Fresh Consideration in PMLA Case

Court clarifies the scope of search under PMLA; Remands matter for fresh hearing on legitimacy of seized assets  

In a significant ruling, the Delhi High Court has set aside a previous decision by the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA), directing a fresh appraisal of the appeal regarding the search and seizure conducted at the premises of the late Mr. Amlendu Pandey. The court emphasized the broader scope of search and seizure under Section 17 of PMLA, which does not necessitate the presence of a prior complaint or report against the individual whose premises are searched.

The appeal was brought by the Directorate of Enforcement (ED), challenging the tribunal's order dated May 21, 2019, which had directed the de-freezing of property belonging to Mr. Amlendu Pandey, who passed away during the proceedings. The ED argued that the tribunal had erroneously focused on the lack of a prosecution complaint against Mr. Pandey while ignoring the broader legal provisions that permit searches based on reasonable belief of ongoing money laundering activities.

The court, presided over by Justices Vivek Chaudhary and Manoj Jain, clarified that searches under Section 17 of the PMLA can be conducted on the premises of any individual suspected of possessing proceeds of crime or records related to money laundering, irrespective of whether they have been formally charged in a preceding complaint. The judges highlighted that the precondition for such a search is the prior institution of a complaint or report under Section 157 of the Criminal Procedure Code (Cr.P.C.), which was satisfied in this case.

The judgment acknowledged procedural lapses, noting that while the ED was aware of Mr. Pandey's demise, this fact was not explicitly mentioned in the supplementary complaint filed in 2018. However, the court deemed this oversight as non-detrimental to the legitimacy of the search conducted in 2016, given that it was based on a complaint filed as early as 2011.

The court has remanded the matter to the Appellate Tribunal for a comprehensive review, instructing it to allow Mr. Pandey's legal representative the opportunity to present evidence demonstrating the legitimate origins of the seized assets and their disassociation from any illicit activities. This decision underscores the judiciary's commitment to ensuring due process while upholding the legislative intent of the PMLA.

Bottom Line:

Prevention of Money Laundering Act, 2002 (PMLA) - Search and seizure under Section 17 of PMLA can be conducted in the premises of any person who has committed an act constituting money laundering or is in possession of proceeds of crime or records related to money laundering, irrespective of whether the person is accused in a prior complaint or report.

Statutory provision(s): Prevention of Money Laundering Act, 2002 Sections 17, 8, 5, Section 157 Cr.P.C.

Deputy Director Directorate of Enforcement v. Amlendu Pandey (D), (Delhi)(DB) : Law Finder Doc Id # 2811758