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Delhi HC Revives ED's Arsenal: Pre-PMLA Property Fair Game if You're Still Holding It
In a landmark ruling, a Division Bench of the —comprising Justice C. Hari Shankar and Justice Om Prakash Shukla —overturned a single judge's decision, holding that properties bought with before the came into force on , remain attachable under if the offender continues possessing or using them afterward. The triumphed over in this Letters Patent Appeal (LPA 144/2016), upholding a provisional attachment order on a Vasant Vihar property linked to a NAFED scam.
Roots in a Sweet Deal Gone Sour
The saga traces back to 2004-2005, when Homi Rajvansh, then Additional Managing Director of the , allegedly colluded with M.K. Agarwal of and its sister concern . They inked Memoranda of Understanding (MOUs) for high seas sale of raw sugar imports without charging costs, causing NAFED a loss of over ₹42 crores.
Funds from these deals—₹1.5 crores funneled through holding companies and —landed with Mahanivesh, where Homi's wife Alka Rajvansh was Director. She used ₹1.35 crores (plus duties) to buy the basement and ground floor of E-14/3, Vasant Vihar via sale deed dated —months before PMLA's enforcement.
A FIR () under led to charges, with trials ongoing. ED's Deputy Director issued Provisional Attachment Order No. 01/2014 on , deeming the property "" likely to be dissipated. Mahanivesh challenged it via WP(C) 1925/2014; the single judge quashed it , prompting ED's appeal.
The core issue: Can such pre-PMLA property be attached if possession persists post-enactment?
ED's Trail of Tainted Funds vs. 'Laundering Done and Dusted'
ED, via , argued the property itself qualifies as "" under —property derived indirectly from scheduled offences (IPC 120B/420 in Schedule Part A). Continued possession/use post-2005 triggers 's money laundering offence, enabling attachment to prevent frustration of confiscation under .
They stressed: No need for the possessor to be charged with the (post-2012/2013 amendments); mere likelihood of concealment sufficed, as para 15 of the attachment order stated. Citing Vijay Madanlal Choudhary v. UOI (2022 SCC OnLine SC 929) and Pradeep Nirankarnath Sharma v. ED (2025 SCC OnLine SC 560), ED asserted money laundering as a standalone, untied to timing.
Mahanivesh's countered: Acquisition/use completed pre-PMLA; integration into economy ended laundering. Post-2005 possession alone can't retroactively create offence, violating . Section 5 aids /8; no live laundering offence, no attachment. They invoked the single judge's view rejecting claims to avoid retrospective effect.
Dissecting the Layers: Why 'Includes' Changes Everything
The Bench dissected three "fundamental errors" in the single judge's view. First, "" isn't just the inflow cash—Section 2(1)(u) encompasses property bought therewith, directly/indirectly.
Second, 's "possession," not "coming into possession," sustains the offence ongoingly. Third, "includes" in expansively covers concealment/possession/acquisition/use disjunctively—no need for "projecting as untainted."
Drawing from
Vijay Madanlal Choudhary
(paras 134-135), the Court affirmed: Laundering continues via possession/use "irrespective of... " date. Explanation (ii) to clarifies it's a "continuing activity" till enjoyment ceases.
Pradeep Nirankarnath Sharma
reinforced: Offence persists
"so long as illicit gains... remain in circulation."
Rejecting retrospectivity fears, the Bench noted PMLA punishes laundering, not predicate crimes— untouched as offence subsists post-enactment. limits precluded factual re-appraisal; ED's belief under (b) was reasoned.
As echoed in reports, this aligns PMLA's intent to
"curb serious economic offences tarnish[ing] the fiscal fabric."
Punchy Pronouncements from the Podium
“If the is committed and, from the proceeds thereof, property is purchased before the coming into force of the PMLA, can it be attached under thereof, if the offender continues to remain in possession of, and continues to use, the property even after the PMLA came into force?”
“Use and possession of , by virtue of the post-‘including’ part of , independently constitute the offence of money laundering.”
“If the person continues to remain in possession of, or continues to use, the ... he would certainly be guilty of the offence of money laundering immediately on the PMLA coming into force.”
“The offence of money laundering does not... end on the date when the person comes into possession of the . It continues so long as the person remains in possession of the .”
Victory for Vigilance: Attachment Stands, Precedent Set
The impugned judgment quashed; attachment upheld, writ dismissed. No costs. Practically, ED gains teeth against pre-2005 assets in ongoing possession—bolstering probes into legacy scams. Future cases: Possession post-PMLA suffices; no integration escape. A fiscal firewall fortified.
