Court Rules Ancestral Property Can Be Attached If It Represents Value Equivalent to Proceeds of Crime
In a significant ruling, the Delhi High Court has upheld the attachment of an ancestral property under the Prevention of Money Laundering Act, 2002 (PMLA), affirming that such properties are not immune from attachment if they represent the value equivalent to proceeds of crime. The judgment came in the case of Arun Suri v. Directorate of Enforcement, where the appellant challenged the attachment of a property in Sainik Vihar, Pitam Pura, Delhi.
The Division Bench comprising Justices Navin Chawla and Ravinder Dudeja dismissed the appeal filed by Arun Suri, who contended that the property, bought by his father in 1991, should not be considered as proceeds of crime since it was not purchased with illicit funds. However, the court clarified that under Section 2(1)(u) of the PMLA, properties that represent the value equivalent to proceeds of crime can be attached, regardless of their ancestral nature.
The Directorate of Enforcement had attached the property, arguing that the proceeds of crime, in the form of foreign exchange, were remitted abroad and thus the property in question was attached as an equivalent value. The court found no illegality in the actions of the Appellate Tribunal, which had earlier upheld the attachment order.
The court referred to the Supreme Court's judgment in Vijay Madanlal Choudhary v. Union of India, which held that the date of the scheduled offence is not relevant; rather, the focus is on the activity connected to the proceeds of crime. The Delhi High Court emphasized that the PMLA does not provide exceptions for ancestral properties and upheld the statutory provisions allowing such attachments.
This ruling underscores the broad scope of the PMLA in targeting not only tainted properties but also untainted properties of equivalent value, reinforcing the statute's intent to curb money laundering activities effectively.
Bottom Line:
Prevention of Money Laundering Act, 2002 (PMLA) - Ancestral property not immune from attachment under PMLA if it represents value equivalent to proceeds of crime.
Statutory provision(s): Prevention of Money Laundering Act, 2002, Section 2(1)(u), Section 5.
Arun Suri v. Directorate of Enforcement, (Delhi)(DB) : Law Finder Doc id # 2855973
