ED can’t bypass due process when seizing property: HC

THE COURT NOTED THAT SUCH A SHORTCUT WOULD HAVE SERIOUS CONSEQUENCES FOR THE PERSON WHOSE PROPERTY HAS BEEN SEIZED

- Shruti Kakkar

The Delhi high court has ruled that the Enforcement Directorate (ED) cannot bypass procedures laid down in the Prevention of Money Laundering Act (PMLA) when seeking to retain seized or frozen property, reinforcing that procedural safeguards must be strictly followed to protect individuals from arbitrary retention.

A bench of justices Subramonium Prasad and Harish Vadiyanathan Shankar delivered the verdict on Friday, holding that before the ED can seek permission from the adjudicating authority to retain property, an authorised officer must first pass a formal order explaining why retention for up to 180 days is necessary.

Without this crucial step, the adjudicating authority cannot lawfully determine whether the propertyis linked to money laundering, the court ruled. The adjudicating authority reference is to a quasi-judicial body appointed by the Centre under Section 6 of PMLA, and plays a pivotal role in determining whether properties attached or seized by ED are involved in money laundering, and confirming legitimacy of such attachments.