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Attachment Order under PMLA Set Aside as Reasons to Believe Not Recorded Properly


This case, Smt. Suma Sooraj v. ED[i] pertains to an appeal challenging the confirmation of a Provisional Attachment Order (‘PAO’) issued within the framework of a corruption case. In this case, the appellate tribunal under SAFEMA has shed light on the retrospective applicability of the amendments to the Prevention of Money Laundering Act, 2002 (‘PMLA’) and the mandatory compliance of s. 5 of PMLA.


  • The case is an appeal filed against the PAO dated 18.01.2019 issued by the Adjudicating Authority under the PMLA against Sh. T. O. Sooraj's FIR and charge sheet against the appellant were filed under ss.13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988. (‘PC Act’) on 25.01.2018.

  • The Enforcement Directorate (‘ED’) charged the appellant with possessing assets disproportionate to his known sources of income to the tune of Rs. 11,84,25,530/- from 01.01.2004 to 19.11.2014.

  • The Enforcement Case Information Report (‘ECIR’) for the offence under the PC Act was recorded in 2015.

  • The appellant argued that since the PC Act was added to the PMLA in 2009 and subsequently amended in 2013, the attachment of the property was not justified as the offence under the PC Act was not a scheduled offence during the period under review.

  • The appellant contested the validity of the reasons for property attachment by ED And argued that the properties were already attached by the trial court in 2015 and hence, there were no grounds for the Adjudicating Authority to presume transfer or concealment of the said properties.

  • ED argued that offences must be considered based on the date of registration of the FIR and ECIR and that the PMLA of 2002 was applicable in this case. ED also argued that the PAO was appropriately executed under s. 5(1) of the PMLA since the appellant was found possessing proceeds of crime and the provisions take precedence over other enactments including the order of the trial court.


  • With regard to the application of PMLA to the PC Act, the tribunal determined that the relevant date for considering a scheduled offence is when a person engages in money laundering or presents tainted property as untainted, rather than the date of the commission of the predicate offence. As the FIR was registered and the ECIR was recorded after the amendment to the PMLA that classified the relevant sections as scheduled offences, the PMLA was deemed applicable in this case.

  • Having regard to the lack of offence under the PC Act, the tribunal found that the available facts on record prima facie established a case of disproportionate property in the possession of the appellant compared to his known sources of income. The tribunal clarified that a detailed determination of this issue would occur in the special court after the completion of the trial, thereby establishing a prima facie case against the appellant.

However, in a final assessment, the tribunal observed that the trial court had already attached the properties through an order issued in 2015. Consequently, there was no likelihood of transfer or concealment. This rendered the reasons to believe for provisional attachment invalid, due to a lack of proper application of mind, and the essential material to invoke s. 5(1)(b) of the PMLA was absent. Consequently, the tribunal quashed the PAO issued in favour of the ED and its confirmation by the Adjudicating Authority.


The tribunal upheld the view that the relevant date for determining whether an offence is a scheduled offence under the PMLA is the date when the person involved in projecting the tainted property as untainted, not the date of the commission of the predicate offence. This interpretation aligns with the purpose of the PMLA, which is primarily concerned with addressing money laundering activities and, therefore, aims to cover a broad range of activities.

The tribunal also pointed out that for an attachment order under s. 5(1) of the PMLA to be valid, there must be material showing a likelihood of concealment, transfer, or dealing with the property in a manner that would frustrate the confiscation proceedings. This highlights the importance of following legal procedures and ensuring that the reasons for attachment are grounded in law. It also indicates that a more comprehensive assessment of the case would occur only during the trial in the special court, and for the PAO under s. 5 of the PMLA, only a prima facie case is needed. This decision further underscores that if the special court withdraws the attachment or if the trial concludes, the ED can use s. 5(1) of the PMLA based on the apprehension of concealment or transfer.

End Notes

[i] [2023] 155 298 (SAFEMA-New Delhi)

Authored by Shivam Mishra, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.


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