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Observing that ancestral or inherited property does not automatically get protection from attachment under the Prevention of Money Laundering Act (PMLA), the Delhi High Court has dismissed an appeal challenging the attachment of a residential property by the Directorate of Enforcement (ED).
A division bench of Justice Navin Chawla and Justice Ravinder Dudeja held that the law does not carve out any exception for ancestral properties. The Court made it clear that if the original proceeds of crime are not traceable, authorities are empowered to attach an untainted property of equivalent value. The High Court referred to the Supreme Court judgment in Vijay Madanlal Choudhary v. Union of India, which interpreted the term "proceeds of crime" under Section 2(1)(u) of the PMLA broadly. The Court noted that the definition includes not only property directly derived from criminal activity but also the "value of such property." It further observed that where the tainted property is taken or held outside India and cannot be located, property equivalent in value held within the country can be attached. Rejecting the appellant's argument that the property was ancestral and therefore protected, the Court held that such a plea does not grant immunity under the PMLA. The appeal was filed under Section 42 of the PMLA, challenging the Appellate Tribunal's order dated November 27, 2025, which had upheld the confirmation of a Provisional Attachment Order issued on July 28, 2017. The property in question is located at 255, Sainik Vihar, Pitam Pura, Delhi. The appellant argued that the property was purchased in 1991 by his father from his own income and that he had not contributed any money towards its purchase. He contended that since the property was not acquired from the proceeds of crime, it could not be attached as "value thereof" under the Act. The ED submitted that the proceeds of crime in the form of foreign exchange had been remitted abroad and were not available for attachment. Therefore, it attached the subject property as "equivalent value" under Section 5, read with Section 2(1)(u) of the PMLA. After examining the record, the High Court found no illegality or perversity in the findings of the Adjudicating Authority or the Appellate Tribunal. It held that the authorities had acted within the statutory framework and had applied their mind to the material on record. (ANI)
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