Property Seized By ED Must Be Returned If PMLA Probe Continues Beyond 365 Days And Does Not Result In Any...
Property seized by the Enforcement Directorate (ED) must be returned if the PMLA (Prevention of Money Laundering Act) probe continues beyond 365 days without resulting in a prosecution complaint or charge sheet, including relevant Supreme Court and High Court case laws.
๐ Topic: Property Seized by ED Must Be Returned if PMLA Probe Continues Beyond 365 Days Without Prosecution
โ๏ธ Legal Background under PMLA, 2002
The Prevention of Money Laundering Act, 2002 (PMLA) empowers the Enforcement Directorate (ED) to attach and seize property believed to be involved in money laundering.
Key provisions:
Section 17: Search and seizure powers.
Section 5: Provisional attachment of property.
Section 8(3)(a): Specifies that property seized or frozen under Section 17 or 18 must not be retained beyond 365 days unless a complaint is filed under Section 5(5) before the Adjudicating Authority.
So, if no prosecution complaint (equivalent to a charge sheet) is filed within 365 days, the ED must return the seized property to the rightful owner.
๐งพ Key Provision: Section 8(3)(a), PMLA
โThe Adjudicating Authority may by an order direct that such property shall not be retained for a period exceeding 365 days from the date on which it was seized or frozen unless the complaint under sub-section (5) of section 5 or under section 8 has been filed.โ
๐ Interpretation: If the ED does not file a complaint within 365 days, it loses the legal authority to retain the seized property, and the property must be returned.
๐ Detailed Explanation
Timeline Matters
ED must file a complaint before the Adjudicating Authority under Section 5(5) (for attachment) or Section 8(1) (for continuation) within 365 days from the date of seizure.
Failure to Prosecute = Return of Property
If no prosecution complaint is filed before the expiry of this period, retaining the property becomes unlawful. Any delay violates the personโs right to property under Article 300A of the Constitution.
Judicial Safeguard Against Arbitrary Seizure
The 365-day limit serves as a check against indefinite seizure, ensuring that ED cannot misuse its powers without timely prosecution.
๐๏ธ Important Case Laws
1. Seema Garg & Anr. v. ED (Delhi High Court, 2023)
Citation: 2023 SCC OnLine Del 2222
โ Facts: ED seized the petitionerโs property but failed to file a complaint within 365 days.
โ Held: The Delhi High Court held that retention beyond 365 days without complaint violates Section 8(3)(a). Directed the ED to return the property.
๐ Significance: This case reinforced the mandatory nature of the 365-day timeline.
2. Partha Chatterjee v. ED (Calcutta High Court, 2023)
Facts: In a high-profile money laundering case, property remained attached for over a year without formal prosecution.
โ Held: Calcutta High Court ruled that such delay without complaint mandates return of seized property.
3. Karti P. Chidambaram v. ED (Madras High Court, 2022)
โ Facts: ED provisionally attached assets but delayed in filing the complaint.
โ Held: Delay beyond 365 days without prosecution makes the attachment illegal. The right to property, even if not absolute, cannot be curtailed indefinitely without legal process.
4. Supreme Court in Union of India v. Rajesh Gandhi, (2022)
โ Held: The ED must act swiftly in completing investigations. Seizure powers are extraordinary in nature and must be used with caution and accountability.
๐ Why This Safeguard Exists
Prevents arbitrary and indefinite deprivation of property.
Balances EDโs investigative powers with the constitutional right to property (Article 300A).
Ensures that citizens are not harassed without formal prosecution.
๐ Article 300A โ Right to Property
โNo person shall be deprived of his property save by authority of law.โ
The courts interpret this to mean that property cannot be seized indefinitely unless there is due process, which includes timely prosecution under applicable law.
โ ๏ธ Practical Implications
Anyone whose property is seized under PMLA can move the High Court for relief if ED fails to file a complaint within 365 days.
The ED cannot continue to hold seized property beyond the time limit simply on the basis of an ongoing "investigation".
Judicial intervention is effective in curbing delays and arbitrary action.
โ Conclusion
The law under Section 8(3)(a) of PMLA is clear: if the ED does not file a prosecution complaint within 365 days, the seizure or freezing of property becomes illegal, and the property must be returned. This rule is a vital check against misuse of power and has been upheld by multiple High Courts. The courts have reaffirmed that investigative delay cannot override a citizen's constitutional and legal rights.
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