Delhi High Court on PMLA Search & Retention: Prior Complaint Need Not Be Against Same Person.

Headnote:

The Delhi High Court set aside the Appellate Tribunal’s 2019 order that had directed de-freezing of property seized from Amlendu Pandey during a PMLA search. The Tribunal had wrongly held that search and retention were invalid because no prosecution complaint was filed against Pandey. The High Court clarified that under Section 17 PMLA, the requirement is only that a prior complaint/report relating to the scheduled offence exists — it need not be against the same person whose premises are searched. Since a prosecution complaint against co-accused Hassan Ali Khan was already filed in 2011, the statutory requirement stood satisfied. The Court remanded the matter back to the Tribunal for fresh consideration on merits, allowing the respondent’s LR to raise all substantive objections regarding legitimacy of possession and cash seizure.

Background:

• ED initiated a money laundering investigation following Income Tax raids (2007) on Hassan Ali Khan revealing foreign bank accounts in Switzerland/Singapore.

• ED registered ECIR/02/MZO/2007 and filed a prosecution complaint on 06.05.2011 against Khan and associates for offences under IPC and Passports Act.

• Multiple searches followed; in one such search on 09.02.2016, ED searched the premises of Amlendu Pandey, seizing ₹26.30 lakhs, a laptop, mobile phones, and a pen drive.

• ED sought retention of seized items under Section 17(4) PMLA due to voluminous electronic data requiring scrutiny.

• Pandey argued before the Adjudicating Authority that the cash belonged to legitimate sources (property sale, agriculture income) and items contained no incriminating material.

• The Adjudicating Authority confirmed retention on 28.06.2016.

• Pandey appealed before the Appellate Tribunal; during the appeal, he died, and his daughter was impleaded.

• The Tribunal allowed the appeal on 21.05.2019, directing de-freezing on the ground that no prosecution complaint existed against Pandey.

Court’s Observations:

• The Tribunal committed a clear error by treating the absence of a prosecution complaint against Pandey as fatal — this was never argued by the respondent, nor supported by law.

• Under Section 17 PMLA (pre-2019 amendment), the precondition for search was existence of a complaint or report relating to a scheduled offence — not necessarily against the person searched.

• A person may possess proceeds of crime or relevant records without being an accused in the underlying scheduled offence; thus, search under Section 17 can extend to such persons.

• In this case, a prosecution complaint regarding the same ECIR had already been filed in 2011 before the Special PMLA Court, satisfying the statutory requirement.

• Pandey’s statements recorded during investigation admitted facilitating Hassan Ali Khan in obtaining a passport on forged documents and assisting in opening a Singapore bank account.

• The Tribunal failed to address actual grounds raised — such as legitimacy of the cash, lack of nexus with money laundering, and absence of incriminating material.

• Both parties agreed that the matter could be remanded to the Tribunal for reconsideration on its merits.]

Legal Provisions Discussed:

• Section 42, PMLA – Appeal to High Court.

• Section 17, PMLA – Search and seizure; scope and preconditions (pre-amendment requirement of Section 157 CrPC report/complaint discussed).

• Section 17(4) & Section 8(3), PMLA – Retention of seized property.

• Section 5, PMLA – Attachment of proceeds of crime; distinction explained.

• Sections 467, 420, 471 IPC & Sections 10(3), 12(1) Passports Act – Scheduled offences forming basis of ECIR.

Decision

The High Court:

• Set aside the Appellate Tribunal’s order dated 21.05.2019.

• Remanded the matter to the Tribunal for fresh adjudication on all grounds raised by the respondent.

• Directed the Tribunal to provide a full opportunity of hearing to both sides and decide the appeal in accordance with law.

Citation: 2025:DELHC: M.A.(PMLA) 8/2022

Case: Deputy Director, Directorate of Enforcement v. Amlendu Pandey (Deceased) Through LR

Court: High Court of Delhi at New Delhi

Coram: Hon’ble Mr. Justice Vivek Chaudhary & Hon’ble Mr. Justice Manoj Jain

Date of Decision: 21 November 2025

Misc. Appeal (PMLA) No.: 8 of 2022