Delhi High Court Upholds Validity of Provisional Attachment During COVID-19, Cites Supreme Court's Extension of Limitation Orders
Directorate of Enforcement's Appeal Succeeds; Provisional Attachment Under PMLA Remains Effective Amidst Pandemic Delays
In a significant ruling, the Delhi High Court, in a division bench comprising Justices Mr. Anil Kshetarpal and Harish Vaidyanathan Shankar, has ruled in favor of the Directorate of Enforcement (ED) in the case of Directorate of Enforcement v. M/s Vikas WSP Ltd. The judgment, delivered on September 24, 2025, addresses the applicability of the Supreme Court's suo motu orders extending limitation periods during the COVID-19 pandemic to proceedings under the Prevention of Money Laundering Act, 2002 (PMLA).
The case involved a Letters Patent Appeal, LPA 362 of 2020, filed by the Directorate of Enforcement (ED) against a judgment passed by a learned Single Judge of the Delhi High Court on November 18, 2020. The Single Judge had allowed a Writ Petition by the respondents, M/s Vikas WSP Ltd., setting aside a Notice/Summons dated May 26, 2020, issued by the Adjudicating Authority. The notice was deemed to have expired as it was issued beyond the 180-day period prescribed under Section 5(3) of the Prevention of Money Laundering Act, 2002 (PMLA). The ED also challenged a Provisional Attachment Order (PAO) passed on December 1, 2021, in a writ petition (W.P.(CRL) 86 of 2022).
The central question in the case was whether the Supreme Court's orders extending limitation periods during the COVID-19 pandemic applied to proceedings under Section 5 of the PMLA, which mandates confirmation of a provisional attachment within 180 days by the Adjudicating Authority under Section 8(3) of the PMLA.
The ED argued that the provisional attachment order should not be deemed expired after 180 days due to the pandemic's extraordinary circumstances. The Supreme Court's suo motu orders extended limitation periods for all judicial and quasi-judicial proceedings, which included those under the PMLA. The ED contended that the private parties were responsible for delays in the adjudication process due to their repeated adjournment requests during the lockdown, and therefore could not claim an automatic lapse of the provisional attachment.
On the other hand, the private parties argued that the 180-day limit is a statutory safeguard, and once that period lapses without confirmation, the Adjudicating Authority becomes functus officio and cannot proceed with the attachment.
After considering the submissions, the Delhi High Court held that the Supreme Court's orders on the extension of limitation were applicable to proceedings under the PMLA. The court emphasized that the extraordinary circumstances of the COVID-19 pandemic warranted broad application of the Supreme Court's directions to ensure justice and fairness in judicial and quasi-judicial proceedings.
Ultimately, the court allowed the appeal by the Directorate of Enforcement, setting aside the previous judgment and upholding the validity of the provisional attachment order, which did not lapse due to the pandemic-related delays.
Bottom Line:
The Supreme Court's orders regarding the extension of limitation due to the COVID-19 pandemic were held applicable to proceedings under the Prevention of Money Laundering Act, 2002 (PMLA), including the limitation period for adjudication under Section 8 by the Adjudicating Authority. The attachment of property under the PMLA cannot be rendered invalid due to delays caused by the pandemic.
Statutory provision(s): Prevention of Money Laundering Act, 2002 Section 5(3), Section 8(3); Constitution of India Articles 141, 142, 300A.
Directorate Of Enforcement v. M/s Vikas WSP Ltd, (Delhi)(DB) : Law Finder Doc Id # 2783842
