The Aryavarth Express
Agency(New Delhi): The Delhi High Court has issued a directive stating that property seized during a money laundering investigation under the Prevention of Money Laundering Act (PMLA) must be returned if the probe exceeds one year without the filing of a prosecution complaint (charge sheet).
Justice Navin Chawla held that if the investigation continues for more than 365 days without resulting in any proceedings related to a PMLA offense, the seized property must be returned to the individual from whom it was seized. This ruling applies unless a competent court issues an order to the contrary.
The High Court rejected the Enforcement Directorate’s (ED) contention that there can be no direction for the return of seized property since Section 8(3)(a) of the Act does not specify consequences for lapsing 365 days. Justice Chawla stated that continuing such seizures beyond 365 days, without pending proceedings related to a PMLA offense, would be confiscatory and in violation of Article 300A of the Indian Constitution.
The case in question involved a petition filed by Mahender Kumar Khandelwal, who had his property seized during a search and seizure operation by the ED in August 2020. The petitioner argued that despite more than three years passing since the seizure and no prosecution initiated by the ED, his seized items were still retained.
The ED contended that they had gathered incriminating evidence in an investigation against Bhushan Power and Steel Ltd. (BPSL) involving fraudulent removal of finished goods. The ED’s counsel argued that data had been deleted from BPSL’s servers, further justifying the retention of the seized property.