* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 12 March 2026 Pronounced on: 16 March 2026 + LPA 144/2016 DIRECTORATE OF ENFORCEMENT .....Appellant Through: Mr. Zoheb Hossain and Mr. Anupam Sharma, Special Counsel with Mr. Vivek Gurnani, Panel Counsel, Mr. Satyam, Ms. Riya Sachdev and Mr. Pranjal Tripathi, Advs. versus M/S MAHANIVESH OILS & FOODS PVT LTD .....Respondent Through: Mr. Parag Tripathi, Sr. Adv. with Mr. D.S. Kohli, Ms. Rini Mehra, Mr.

Yash Kadyan and Ms. Mannat Kohli, Advs.

CORAM:

HON'BLE MR. JUSTICE C. HARI SHANKAR HON'BLE MR. JUSTICE OM PRAKASH SHUKLA

JUDGMENT

% 16.03.2026 C. HARI SHANKAR, J.

A. The lis, and the issue involved

1. This Letters Patent Appeal, against judgment dated 25 January 2016 of a learned Single Judge of this Court, involves the interpretation of Section 5(1), $~ of the Prevention of Money Laundering

15. Attachmentofpropertyinvolvedinmoney-laundering.–

Act, 2002, 2“thePMLA”hereinafter. The neat question that arises for consideration may be framed thus:

“If the scheduled offence is committed and, from the proceeds thereof, property is purchased before the coming into force of the PMLA, can it be attached under Section 5(1) thereof, if the offender continues to remain in possession of, and continues to use, the property even after the PMLA came into force?”

2. The learned Single Judge has, in the impugned judgment, answered the question in the negative and has, therefore, set aside the (1) WheretheDirectororanyotherofficernotbelowtherankofDeputyDirectorauthorised bytheDirectorforthepurposesofthissection,hasreasontobelieve(thereasonforsuchbeliefto berecordedinwriting),onthebasisofmaterialinhispossession,that—

(a) anypersonisinpossessionofanyproceedsofcrime;and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of suchproceedsofcrimeunderthisChapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundredandeightydaysfromthedateoftheorder,insuchmannerasmaybeprescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section173of theCode of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizanceofthescheduledoffence,asthecasemaybe,orasimilarreportorcomplainthasbeen madeorfiledunderthecorrespondinglawofanyothercountry:

Providedfurtherthat,notwithstandinganythingcontainedinfirstproviso,anypropertyof anypersonmaybeattachedunderthissectioniftheDirectororanyotherofficernotbelowtherank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasonsforsuchbelieftoberecordedinwriting),onthebasisofmaterialinhispossession,thatif such property involved in money-laundering is not attached immediately under this Chapter, the non-attachmentofthepropertyislikelytofrustrateanyproceedingunderthisAct.

Provided also that for the purposes of computing the period of one hundred and eighty days,theperiodduringwhichtheproceedingsunderthissectionisstayedbytheHighCourt,shall be excluded and a further period not exceeding thirty days from the date of order of vacation of suchstayordershallbecounted.

1(u) “proceedsofcrime”meansany propertyderivedorobtained,directlyorindirectly,byanyperson asaresultofcriminalactivityrelatingtoascheduledoffenceorthevalueofanysuchpropertyorwheresuch propertyistakenorheldoutsidethecountry,thenthepropertyequivalentinvalueheldwithinthecountryor abroad;

Explanation. – For the removal of doubts, it is hereby clarified that “proceeds of crime” include propertynotonlyderivedorobtainedfromthescheduledoffencebutalsoanypropertywhichmaydirectlyor indirectlybederivedorobtainedasaresultofanycriminalactivityrelatabletothescheduledoffence;

attachment of the property in questi