‘Ancestral property not immune from attachment under PMLA’

New Delhi: Ancestral property is not immune from attachment in proceedings under Prevention of Money Laundering Act (PMLA), Delhi High Court has said.In a ruling passed last week, a bench of Justices Navin Chawla and Ravinder Dudeja observed that the Act provided no exception for ancestral or inherited properties in matters of attachment in money laundering proceedings.
It dismissed a plea by one Arun, challenging a 2025 order of the appellate tribunal under the anti-money laundering statute, which upheld the confirmation of provisional attachment of his property in Sainik Vihar in northwest Delhi's Pitampura by Enforcement Directorate (ED).According to the appellant, the property was bought by his father, not by him, out of the former's own income in 1991 in their joint names, and therefore, could not be attached. The high court, however, called Arun's stand misconceived and contrary to the scheme of PMLA.It clarified that the PMLA adjudicating authority had appreciated the evidence and recorded a finding that the property represented a value equivalent to the "proceeds of crime" allegedly generated from scheduled offences in the case and the tribunal's decision had also reflected due application of mind.The high court explained that the expression "proceeds of crime" envisaged both tainted property as well as untainted property, with it being permissible to proceed against the latter. "Where the respondent is unable to discover the tainted property, it may proceed to attach even an untainted property equivalent in value," it observed. Merely because the property is ancestral does not automatically grant it immunity from attachment under PMLA, it added.Arun had argued that as per PMLA, only "tainted properties" obtained directly or indirectly as a result of criminal activity could be termed as "proceeds of crime". As he had got the right over the said property through his deceased father, it was wholly impermissible to attach it, he had claimed. ED had pointed out that the proceeds of crime acquired by Arun were in the form of foreign exchange, which was remitted abroad, and was, therefore, not available. The current property was, hence, attached as being of equivalent value under PMLA, it had submitted.