Two legal hurdles holding up final attachment of assets: ED
Nearly one-third of ₹1.54 lakh crore worth proceeds of crime (PoC) attached by ED till date under the prevention of money laundering act (PMLA) are subject to legal challenges.
Nearly one-third of ₹1.54 lakh crore worth proceeds of crime (PoC) attached by the Enforcement Directorate (ED) till date under the prevention of money laundering act (PMLA) are subject to legal challenges.
According the financial crimes probe agency’s annual report, the legality of the attachments has been challenged by the accused in over 200 petitions and is currently pending before various high courts and the Supreme Court.
Under PMLA, a property is first provisionally attached by ED through an attachment order. It remains provisionally attached for 180 days. Meanwhile, this attachment order is forwarded to an adjudicating authority (AA) which reviews whether the property is involved in money laundering and confirms the attachment order. After confirmation, ED issues an order for taking possession of the property. An order of confiscation for the property can be issued after a court of law, which means the attachment is final. The challenge starts after the provisional attachment order is issued or confirmed by AA.
The gap between the property attached by the agency so far, ₹1,54,594 crore, and confirmed by attachment orders, ₹1,06,730, is primarily attributable to two significant legal impediments, which have led to “widespread litigation and consequent stays on proceedings before the AA”, says the annual report released on Thursday.
“The first concerns the question of coram non judice, i.e. whether confirmation orders can be validly passed by a single member (who is usually a special director of ED) in the absence of a full quorum of the adjudicating authority, particularly in the cases where no judicial member is present,” the report states.
This issue, ED says, “has led to stays in over 100 matters across high courts and the Supreme Court, thereby freezing PoC worth ₹3,803.91 crore”.
The second legal hurdle, according to the annual report, relates to the interpretation of the 180-day time limit for confirmation of provisional attachment orders. “A batch of 119 petitions before the Delhi high court and similar matters pending before the Supreme Court involve PoC worth ₹49,620 crore,” the report says (specifically due to the second legal hurdle)
The agency report clarifies that these figures “might not match since some (attachment) orders are stayed after confirmation by the AA”.
Other challenges faced by ED during and after attachment of proceeds of crime, according to the report, include the “numerous appeals or petitions filed by accused individuals, frequent encroachments on the attached lands, and the creation of fraudulent third-party claims through fake lease deeds and other mechanisms.”
The web of litigation, according to report, “not only strains ED’s resources but also delay the resolution or conclusion of cases.”
Another major challenge ED faces after the attachment of properties is managing them. “The department faces significant challenges in managing and maintaining attached assets, particularly those that are prone to depreciation. In such cases, the department strategically opts to substitute these assets with fixed deposit receipts provided by the concerned parties, thereby preventing value loss and preserving the assets for eventual confiscation under the PMLA,” report says.
ED highlighted that it issued 416 provisional attachment orders in 2024-25 with a record value of ₹30,036 crore worth proceeds of crime, a 44% increase in the number of attachments and a striking 141% rise in their total value compared to the previous year.
“By aggressively targeting and reclaiming the crime proceeds, ED sends a powerful message to offenders: every rupee obtained through criminal activities will be pursued and reclaimed,” report says.
