New Delhi: The Delhi high court on Thursday stayed its last month’s order which held that assets seized in connection with a money laundering case must be returned if the investigation continues beyond 365 days and does not result in any prosecution complaint (or charge sheet).
A division bench led by acting chief justice Manmohan stayed the verdict while considering an appeal filed by the Enforcement Directorate (ED) against the January 31 judgment. The bench, also comprising justice Manmeet Pritam Singh Arora, said the stay would remain in force till March 11, the next date of hearing in the matter.
ED had challenged the January 31 order, passed by a single-judge bench of justice Navin Chawla, which ruled that continuation of seizure beyond 365 days shall be confiscatory in nature and thus violative of Article 300A of the Constitution of India (right to private property).
“The natural consequence of the investigation for a period beyond 365 days not resulting in any proceedings relating to any offence under the Act, in terms of section 8(3) of the (Prevention of Money Laundering) Act, is that such seizure lapses and the property so seized must be returned to the person from whom it was so seized,” the court had ruled.
Though the right to property, which ceased to be a fundamental right by the 44th Constitution amendment in 1978, it continued to be a Constitutional right under Article 300A, which states that no person shall be deprived of his property save by authority of law.
{{/usCountry}}Though the right to property, which ceased to be a fundamental right by the 44th Constitution amendment in 1978, it continued to be a Constitutional right under Article 300A, which states that no person shall be deprived of his property save by authority of law.
{{/usCountry}}The single-judge bench in its 37-page verdict opined that the expression “pendency of the proceedings relating to any offence under this Act [PMLA] before a Court” only referred to the proceedings pending before a PMLA Court in relation to the person from whom the property was seized.
The court’s decision had come on a petition filed by Mahender Kumar Khandelwal, the former resolution professional of Bhushan Power and Steel Limited (BPSL), against the continued seizure of various documents, records, digital devices and gold and diamond jewellery worth ₹85 lakh by the federal agency since 2020.
“The words ‘proceedings relating to any offence under this Act’ appearing in Section 8(3)(a) of the Act, therefore, has to be read in light of the above provisions to mean only a proceeding that is pending before a special court in relation to the property or records that are so attached or seized or frozen or with the respect to the person from whom such property was seized or recovered,” the court had noted. “It is also to be remembered that the power of attachment, seizure, and freezing of the properties and records, is a draconian provision that has to be strictly construed.”
On Thursday, ED appearing through additional solicitor general SV Raju submitted that the single-judge bench order had many flaws. The law officer sought a stay on the verdict apprehending that the same might be cited as a precedent.