Vakil Help Desk News: a High Court has held that property acquired before the alleged offence is not automatically protected from provisional attachment under the money-laundering law, as the authorities can attach property of 'equivalent value'.
Vakil Help Desk News, Litigation & Courts. A High Court has dismissed a writ petition challenging the provisional attachment of properties under the Prevention of Money Laundering Act (PMLA), while keeping all statutory remedies open to the affected person.
What the Court held
- The fact that properties were bought before the alleged offence does not, by itself, invalidate their attachment as property of equivalent value.
- Reading Section 2(1)(u) with Section 5, equivalent-value attachment is not limited to cases where the proceeds of crime are held abroad. The Court relied on Vijay Madanlal Choudhary and Axis Bank.
- The PMLA does not require prior notice or a hearing before a provisional attachment under Section 5(1); the safeguards come later — the order goes to the Adjudicating Authority, a complaint must be filed in time, and the person can respond under Section 8.
- Whether the property is truly linked to proceeds of crime is a fact-specific question for the PMLA authorities and the Appellate Tribunal.
What this means for you
Owning a property before the alleged offence does not automatically shield it from PMLA attachment, and the absence of a prior hearing is not a ground to challenge attachment at the writ stage — the real contest is before the Adjudicating Authority and the Appellate Tribunal. We advise on PMLA attachment, adjudication and appeals.