Delhi High Court on PMLA Search & Retention: Tribunal Misread Section 17 Requirements.

Headnote:

The Delhi High Court set aside the Appellate Tribunal’s order de-freezing cash and electronic devices seized from the premises of late Amlendu Pandey during a search under Section 17 of the Prevention of Money Laundering Act, 2002 (PMLA). The Tribunal had held that the absence of a prosecution complaint against the respondent made the search and retention unsustainable. The High Court held that this reasoning was legally erroneous, as Section 17 does not require that the complaint or report be filed against the same person whose premises are searched. Once a prior complaint concerning the scheduled offence existed (as in this case), the statutory precondition stood satisfied. The matter was remanded to the Tribunal to consider remaining issues such as the legitimacy of the seized cash.

Background:

• The Enforcement Directorate (ED) conducted searches on 5–6 January 2007 relating to Hassan Ali Khan, revealing offshore accounts and suspected money laundering.

• ED registered ECIR/02/MZO/2007 and filed a prosecution complaint on 06.05.2011, leading to arrests and confirmation of attachment of several properties.

• On 09.02.2016, ED searched the premises of Amlendu Pandey (now deceased) under Section 17 of PMLA, seizing a laptop, pen-drive, mobile phones, and ₹26.30 lakh cash.

• ED sought retention of seized items under Section 17(4), which the Adjudicating Authority confirmed on 28.06.2016.

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

• On 21.05.2019, the Appellate Tribunal allowed the appeal, directing de-freezing of cash and devices solely because no prosecution complaint had been filed against Pandey.

• ED challenged this order under Section 42 PMLA before the Delhi High Court.

Court’s Observations:

• The Tribunal’s finding—that absence of a complaint against the respondent invalidated the search—was incorrect, as Section 17 PMLA only requires a prior complaint/report in relation to the scheduled offence, not against the same individual searched.

• A supplementary complaint filed in 2018 recorded the respondent’s admissions regarding assisting Hassan Ali Khan with forged passport documentation and opening a Singapore account.

• The Court explained the distinction between Section 5 (provisional attachment) and Section 17 (search and seizure):

– Section 5 requires a pending complaint/report regarding the scheduled offence under the proviso.

– Section 17 allows search of premises of any person possessing proceeds of crime or records relating to money laundering—even if that person is not named as an accused.

• The search of 09.02.2016 was pursuant to the 2011 complaint, thus meeting the statutory precondition.

• The Tribunal failed to consider key issues raised by the respondent, including:

– His explanation of legitimate sources of cash

– His claims regarding the sale agreement

– Alleged absence of incriminating material in devices

• Both parties agreed that these issues should be examined on merits.

Legal Provisions Discussed:

• Section 17, PMLA – Search and seizure powers; scope and preconditions.

• Section 5, PMLA – Provisional attachment and its requirements.

• Section 42, PMLA – Appeal to High Court.

• Section 26, PMLA – Appeal to Appellate Tribunal.

• Sections 467, 420, 471 IPC – Forgery, cheating, and using forged documents.

• Sections 10(3) & 12(1), Passports Act, 1967 – Offences related to passport misuse.

• Section 157 CrPC – Forwarding of report (as previously required in Section 17 proviso).

Final Order:

• The Tribunal’s order dated 21.05.2019 is set aside.

• The matter is remanded to the Appellate Tribunal (PMLA) for fresh adjudication.

• Tribunal shall decide the appeal afresh after giving a full opportunity of hearing to both sides.

• Appeal disposed of accordingly.

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