In a key interpretation of the Prevention of Money Laundering Act (PMLA), the Supreme Court has ruled that authorities don’t need to name a person as an accused in order to continue holding on to their seized assets under Section 8(3)(a) of the Act. The mere existence of a pending complaint concerning an alleged PMLA offence is sufficient to justify retention.
A bench comprising Justices Abhay S Oka and N Kotiswar Singh clarified that it’s not the identity of the accused that triggers Section 8(3)(a), but the pendency of a complaint under Section 3 of the PMLA. In their words, “The order of cognizance is of the offence and not of the accused or the offender.”
The case revolved around electronic devices, documents, and cash seized from a respondent during an Enforcement Directorate (ED) investigation launched in 2017. Though a complaint under Section 44 was later filed and the Special Court took cognizance in February 2018, the respondent argued that since he wasn’t named in the complaint, the ED had no right to continue holding the materials.
The ED had acted under Section 17(4) of the PMLA, with the Adjudicating Authority confirming the retention on April 4, 2018. Later, both the Appellate Authority and the High Court ruled that the retention order would lapse after 90 days, as per the amended Section 8(3)(a). This prompted the Union of India to appeal to the top court.
The twist? The Supreme Court observed that the version of Section 8(3) in force at the time of the ED’s order—i.e., prior to the April 2018 amendment—did not impose a 90-day limit. It permitted retention as long as proceedings related to a PMLA offence were ongoing. And crucially, the Court emphasized, the complaint was based on the very ECIR in which the respondent was originally listed as an accused.
Even if the amended version were considered, the Court noted, the 90-day period could be extended if a complaint remained pending. “The order was to continue till the disposal of the complaint,” the judges ruled, setting aside the decisions of the High Court and the Appellate Authority.
In short: who’s named in the complaint doesn’t matter. What matters is whether the wheels of PMLA justice are still turning.
