High Court Of Delhi Holds That Property Purchased From Proceeds Of Crime Prior To Enforcement Of The Prevention Of Money Laundering Act, 2002 May Still Be Liable To Attachment If Possession Continues Thereafter.

The High Court of Delhi, by way of its judgment dated 16.03.2026, in the matter of Directorate of Enforcement v. M/s. Mahanivesh Oils & Foods Pvt. Ltd.¹, allowed the appeal against the order of the Single Judge which had quashed a Provisional Attachment Order issued under Section 5(1) of Prevention of Money Laundering Act, 2002 (“PMLA”). The court held that where property constitutes ‘proceeds of crime’ and the person continues to remain in possession or use thereof even after PMLA coming into force, the offence of money-laundering is a continuing one and attachment of such property can be sustained.

The issue before the court was whether the immovable property allegedly purchased out of proceeds generated from a scheduled offence, but acquired prior to the enforcement of the PMLA, could still be attached under Section 5(1) of PMLA where the accused continued to possess and utilise such property after the statute came into force.

The court held that the offence of money laundering under Section 3 of PMLA is independent of the scheduled offence and includes continued activities such as concealment, possession, acquisition or use of proceeds of crime. It was observed that continued possession or enjoyment of the property from the proceeds of crime after PMLA came into force, amounts to a continued offence, thereby enabling attachment and confiscation of the proceedings. Consequently, the findings underlying the Provisional Attachment Order were justified and necessary to safeguard the confiscation proceedings.

Footnote

1. LPA No. 144/2016.

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