Attachment of Property under PMLA acquired prior to Criminal Activity

Property acquired prior to commission of scheduled offence i.e. criminal activity or introduction of PMLA cannot be attached unless property obtained or acquired from scheduled offence is held or taken outside the country.

The Appellants in the matter of Seema Garg vs. The Deputy Director, Directorate of Enforcement, PMLA No. 1 of 2019 (O&M), raised three fold arguments, namely:

i) at the time of expiry of 90 days from the date of confirmation order investigation was pending;

ii) property in question was purchased much prior to not only commission of alleged offence but also introduction of PMLA; and

iii) there is non-compliance of the requirement of recording of reasons prior to provisional attachment of property. 

The Hon’ble High Court of Punjab and Haryana, considering the law and facts, order:

i) In case investigation is pending, filing of complaint against others is not sufficient to deprive any person from benefit of time cap of 365 days;

ii) Property acquired prior to commission of scheduled offence i.e. criminal activity or introduction of PMLA cannot be attached unless property obtained or acquired from scheduled offence is held or taken outside the country; and

iii) Director or any other officer authorised by him is bound to record reasons which must be specific and mere reproduction of wording of Section 5 is not sufficient.