Attachment of Properties Situated in Different States in a Delhi PMLA Case: Jurisdiction, Possession and Legal Remedies

Direct Answer: A property does not become immune from attachment merely because it is situated outside Delhi. In a Delhi-linked investigation under the Prevention of Money Laundering Act, 2002, the Directorate of Enforcement may provisionally attach land, flats, commercial premises, factories, hotels, resorts, bank balances or other assets located in Haryana, Uttar Pradesh, Punjab, Rajasthan, Maharashtra, Himachal Pradesh or another state, subject to the statutory requirements of the PMLA.

The PMLA extends throughout India. Its definition of “property” covers movable and immovable, tangible and intangible assets wherever located. Its definition of “proceeds of crime” also recognises the value of property and, in appropriate circumstances, equivalent-value property held in India or abroad.

The location of the asset is therefore only one part of the analysis. The more important legal questions are:

• What scheduled offence is relied upon?
• What property was generated from the alleged criminal activity?
• How is the property in another state connected with those proceeds?
• Is it alleged to be direct proceeds, indirectly derived property or value-equivalent property?
• Who legally and beneficially owns the asset?
• Was the property purchased before or after the alleged offence?
• Was it acquired through lawful independent funds?
• Did the authorised officer have jurisdiction over the case or class of cases?
• Were property-specific reasons to believe recorded?
• Were all joint owners, mortgagees, tenants and third-party claimants given the required opportunity?
• Was local registration and possession procedure properly followed?
• Was an appeal and interim-stay application filed within limitation?

Core legal position: A Delhi investigation can result in attachment of property situated in another state. However, the property’s location does not remove the requirement to establish a scheduled-offence foundation, proceeds-of-crime nexus, lawful authority, proper valuation, ownership and compliance with Sections 5 and 8 of the PMLA.

Why Properties in Several States May Be Included in One PMLA Case

Financial transactions rarely remain confined to one state. A company may have its registered office in Delhi while its projects, factories, land banks, hotels, warehouses, subsidiaries and promoter assets are situated elsewhere.

A Delhi-linked investigation may involve:

• A company registered or managed from Delhi;
• A scheduled-offence FIR registered by Delhi Police or CBI in New Delhi;
• Bank accounts operated from Delhi;
• Loan or investor funds collected in Delhi;
• ED Headquarters or a Delhi unit conducting the investigation;
• Corporate and accounting records maintained in Delhi;
• Directors residing or working in Delhi;
• A prosecution complaint filed before a designated Special Court in Delhi; and
• Properties acquired from the alleged proceeds in several other states.

For example, money collected or diverted through a Delhi company may later be used to purchase:

• A residential property in Gurugram;
• Land in Noida or Agra;
• A hotel or resort in Himachal Pradesh;
• A commercial property in Mumbai;
• A farmhouse in Rajasthan;
• A factory in Punjab;
• A warehouse in Uttar Pradesh;
• A flat in Bengaluru;
• A vehicle registered in another state; or
• Shares in a company that owns property outside Delhi.

The financial trail, rather than the state boundary, generally determines why an asset is examined.

What Does “Attachment” Mean under the PMLA?

Under Section 2(1)(d), attachment means prohibition of the transfer, conversion, disposition or movement of property through an order issued under Chapter III of the PMLA.

Provisional attachment generally prevents the owner or holder from:

• Selling the property;
• Gifting it;
• Creating a mortgage or charge;
• Leasing it in a manner affecting the attachment;
• Transferring possession;
• Creating third-party rights;
• Changing the ownership structure;
• Encumbering it;
• Converting it into another asset; or
• Otherwise dealing with it in a manner that may frustrate confiscation.

Attachment is not automatically the same as confiscation.

Attachment

Attachment is a statutory restraint on dealing with property. At the provisional stage, ownership does not automatically vest in the Central Government.

Confirmation

The Adjudicating Authority may confirm the attachment after considering the reply, hearing the parties and recording whether the property is involved in money laundering.

Possession

After confirmation, ED may initiate possession proceedings under Section 8(4) and the 2013 Taking Possession Rules, subject to the statutory and judicial safeguards applicable to interim possession.

Confiscation

Confiscation ordinarily follows an order of the Special Court under Section 8 after the statutory adjudicatory and criminal process. On confiscation, the property may vest in the Central Government in accordance with Section 9.

Important distinction: A provisional attachment order does not itself amount to a final judicial declaration that the property is proceeds of crime or that its owner is guilty of money laundering.

Does the PMLA Apply Throughout India?

Yes. Section 1 states that the PMLA extends to the whole of India.

Section 2(1)(v) defines property broadly to include:

• Assets of every description;
• Corporeal and incorporeal property;
• Movable and immovable property;
• Tangible and intangible assets;
• Documents evidencing title or interest; and
• Property wherever located.

The statutory expression “wherever located” is significant. It prevents an asset from falling outside the PMLA merely because it is situated beyond the territorial limits of the ED office conducting the principal investigation.

Can Delhi ED Attach Property Situated Outside Delhi?

Yes, subject to statutory authority and the facts of the individual case.

A Delhi or Headquarters ED unit may issue a provisional attachment order that includes property situated in another state where:

• The officer is authorised under Section 5;
• The case or class of cases is assigned to that authority under the applicable administrative framework;
• The officer possesses material supporting the attachment;
• Reasons to believe are recorded in writing;
• The property is identified as proceeds of crime, indirectly derived property, property involved in money laundering or property representing its value; and
• The remaining statutory conditions are satisfied.

Section 51 provides that ED authorities exercise jurisdiction according to directions issued by the Central Government. Such directions may consider:

• Territorial area;
• Classes of persons;
• Classes of cases; and
• Other specified criteria.

The location of the property outside Delhi does not, by itself, prove that the investigating officer lacked jurisdiction. Conversely, the nationwide operation of the PMLA does not make jurisdictional scrutiny irrelevant.

The affected person may examine:

• The rank and authorisation of the officer signing the PAO;
• The case or class of cases assigned to that unit;
• Any transfer or assignment of the investigation;
• The ECIR and predicate-offence connection;
• The specific role of the Delhi, Headquarters or other zonal unit;
• Whether the attachment order covers properties unrelated to the assigned case; and
• Whether the officer recorded reasons concerning each category of property.

Section 5: Requirements for Provisional Attachment

Section 5 authorises the Director or an officer not below the rank of Deputy Director authorised for that purpose to provisionally attach property.

The authorised officer must have material in possession and must record reasons to believe that:

• A person is in possession of proceeds of crime; and
• The proceeds are likely to be concealed, transferred or otherwise dealt with in a manner that may frustrate confiscation proceedings.

The provisional attachment may initially operate for a period not exceeding 180 days, subject to the statutory exclusions concerning a High Court stay.

Predicate-Offence Requirement

Ordinarily, the first proviso requires a police report or complaint concerning the scheduled offence to have reached the competent court.

The second proviso permits immediate attachment in the specified circumstances where the authorised officer records reasons to believe that failure to attach property involved in money laundering would frustrate proceedings under the Act.

Forwarding Material to the Adjudicating Authority

Immediately after attachment, the officer must forward the attachment order and material in possession to the Adjudicating Authority in the prescribed manner.

Thirty-Day Complaint

Section 5(5) requires the officer to file a complaint stating the facts of attachment before the Adjudicating Authority within thirty days from the attachment.

Can One PAO Cover Properties in Several States?

One provisional attachment order may contain a schedule of several assets situated in different states where ED alleges that they form part of the same proceeds-of-crime or value-equivalent calculation.

A multi-state property schedule may contain:

• Serial number of each property;
• State and district;
• Village, municipal area or project name;
• Survey number, khasra number, plot number or flat number;
• Area and boundaries;
• Registration-document details;
• Name of recorded owner;
• Alleged beneficial owner;
• Date of acquisition;
• Purchase consideration;
• Current or estimated value;
• Nature of alleged proceeds-of-crime connection;
• Mortgage or charge details;
• Joint ownership; and
• Whether the property is direct or value-equivalent property.

The existence of one common PAO does not eliminate the requirement for property-wise scrutiny.

The defence should test every asset separately because one property may be directly traceable while another may:

• Predate the alleged offence;
• Belong to a spouse;
• Be jointly inherited;
• Be mortgaged to a bank;
• Belong to an independent company;
• Have been purchased by a bona fide third party;
• Represent a productive business asset;
• Have a valuation error; or
• Have no demonstrated connection with the alleged proceeds.

Direct Proceeds, Indirect Proceeds and Value-Equivalent Property

Direct Proceeds of Crime

A property may be alleged to be direct proceeds where the same money generated from the scheduled criminal activity is used to purchase it.

Example:

Fraudulent collection → identified bank account → payment to seller → purchase of identified flat.

Indirectly Derived Property

A property may be alleged to be indirectly derived where the original proceeds are layered, converted or transferred before acquisition.

Example:

Proceeds → shell company → inter-company loan → land purchase → transfer of shares in land-owning company.

Value-Equivalent or Alternate Property

Section 2(1)(u) includes the value of property and recognises equivalent-value property where the original property is taken or held outside the country. The Supreme Court has also examined the statutory reach of attachment of alternate property representing the value of unavailable proceeds.

ED may allege value-equivalent attachment where:

• The direct proceeds have been dissipated;
• The property has been transferred to third parties;
• The proceeds were consumed or spent;
• The original asset has lost its identity;
• The proceeds are held abroad;
• The property has been mixed with other funds;
• The direct asset has been sold to numerous homebuyers; or
• Attaching the original asset may prejudice bona fide occupants or claimants.

The defence may still examine:

• Whether value-equivalent attachment is legally available on the facts;
• The amount of identified proceeds of crime;
• Whether the original proceeds are actually unavailable;
• Whether the same value has already been attached elsewhere;
• Whether double counting has occurred;
• Whether the alternate property belongs to the person alleged to possess the proceeds;
• Whether innocent third-party property has been included;
• Whether valuation is based on purchase price or unsupported current estimates; and
• Whether attachment exceeds the alleged proceeds-of-crime amount.

Can Property Purchased Before the Alleged Offence Be Attached?

The fact that a property predates the alleged scheduled offence is important but may not always end the inquiry.

If ED describes the property as direct proceeds of crime, a property acquired before generation of the alleged proceeds ordinarily creates a serious chronological objection.

ED may nevertheless attempt to attach a pre-existing property as property representing the value of unavailable proceeds, depending upon the statutory basis and facts.

A proper defence should therefore distinguish:

• Whether ED calls the property direct proceeds;
• Whether ED calls it indirectly derived property;
• Whether it is expressly attached as value-equivalent property;
• Whether the PAO identifies the original proceeds;
• Whether the original proceeds are unavailable;
• Whether the property owner ever received or controlled those proceeds;
• Whether the valuation is proportionate; and
• Whether the legal conditions for alternate attachment are satisfied.

The defence should produce:

• Earlier sale deed;
• Inheritance documents;
• Loan records;
• Historical bank statements;
• Income-tax returns;
• Books of account;
• Proof of salary or business income;
• Construction records; and
• Evidence that acquisition predated the alleged crime period.

Property Owned by a Spouse or Family Member

ED may examine property held in the name of a spouse, child, parent, relative, employee, associate or family-controlled entity where beneficial ownership or funding from proceeds of crime is alleged.

Relationship alone is not sufficient to prove that the property belongs beneficially to an accused.

Relevant questions include:

• Who paid the purchase price?
• Who paid stamp duty and registration charges?
• Who repaid the property loan?
• Who declared the asset in tax returns?
• Who receives rent?
• Who controls possession?
• Who paid for construction or renovation?
• Did the recorded owner have independent income?
• Was the asset acquired before the relevant period?
• Did money move from the accused or a related entity?
• Is there evidence of beneficial ownership?
• Was the property held on behalf of another person?

A family member should prepare an independent source-of-funds statement rather than rely solely upon the assertion that the property is registered in his or her name.

Jointly Owned Property

Section 8 requires service of notice on all persons jointly holding the property.

Where only one co-owner is alleged to be connected with proceeds of crime, the defence should identify:

• Each co-owner’s legal share;
• Contribution to the purchase price;
• Inheritance rights;
• Separate loan liability;
• Independent income;
• Possession and use;
• Whether the entire property or only one share is attached; and
• Whether the valuation reflects the concerned person’s actual interest.

Under the 2013 Taking Possession Rules, where an immovable property is under joint ownership, the authorised officer may accept an equivalent-value fixed deposit to the extent of the concerned person’s share estimated to be involved in money laundering.

This option is not automatically granted in every case. It may nevertheless be relevant where continued attachment of the entire physical property disproportionately affects innocent co-owners.

Property Owned by a Company or LLP

A company or LLP has a separate legal identity. Property registered in its name does not automatically become the personal property of its promoter or director.

ED may seek to establish that:

• The entity received the alleged proceeds;
• The company was a shell or conduit;
• The promoter controlled its bank accounts;
• The entity lacked independent operations;
• The purchase was funded by another accused entity;
• The company held the property for the beneficial owner;
• Corporate records were fabricated; or
• The entity was created to hold or conceal assets.

The company may rely upon:

• Incorporation and ownership records;
• Independent business activity;
• Employee and office records;
• Board approvals;
• Loan and banking documents;
• Tax returns;
• Audited financial statements;
• Commercial contracts;
• Independent source of acquisition funds; and
• Evidence disproving beneficial ownership by the accused.

Bona Fide Purchasers and Third-Party Claimants

A person who purchases property from an accused or related entity may discover that the property has subsequently been attached.

The purchaser’s position depends upon:

• Date of purchase;
• Date of attachment;
• Whether attachment information was publicly available;
• Whether consideration was genuine and paid through banking channels;
• Market value;
• Relationship with the seller;
• Possession;
• Registration;
• Title search and due diligence;
• Knowledge of the investigation;
• Whether the transaction was intended to defeat attachment; and
• Whether the purchaser has a legitimate independent interest.

Section 8(2) permits a person other than the original noticee to claim the property and receive an opportunity of hearing to prove that it is not involved in money laundering.

A bona fide purchaser should ordinarily preserve:

• Agreement for sale;
• Registered sale deed;
• Bank-payment trail;
• Loan sanction;
• Valuation report;
• Title-search report;
• Encumbrance certificate;
• Public-notice publication;
• Possession letter;
• Mutation or municipal entry;
• Tax receipts;
• Correspondence with the seller; and
• Evidence of good-faith due diligence.

Tenants and Leaseholders

Attachment of the owner’s property does not automatically establish that the tenant participated in money laundering.

The tenant should examine:

• Whether the lease is registered;
• Date of commencement;
• Rent paid;
• Security deposit;
• Relationship with the owner;
• Whether the rent is commercially reasonable;
• Whether the lease predates attachment;
• Whether ED alleges that the lease was created to defeat proceedings; and
• Whether possession proceedings have been initiated.

Under the Taking Possession Rules:

• Where a registered lease exists, the authorised officer may direct the occupant to pay rent to the Directorate of Enforcement;
• Where registration was optional and the property is occupied by a third party, the Rules contemplate vacation and possession with assistance of local authorities; and
• Questions concerning genuine tenancy, hardship and existing legal rights may require adjudicatory or appellate consideration.

Mortgaged Property and Secured Creditors

A property may already be mortgaged to a bank, financial institution or secured creditor when ED issues a PAO.

The issues may include:

• Date of mortgage;
• Date of alleged criminal activity;
• Date of attachment;
• Whether the bank acted in good faith;
• Whether the loan was genuine;
• Whether the mortgage financed acquisition of the property;
• Whether the bank had notice of the alleged offence;
• Whether SARFAESI or DRT proceedings were already pending;
• Whether an auction had been completed;
• Whether the purchaser received a sale certificate; and
• Whether the same asset is subject to insolvency proceedings.

Rule 8 of the Taking Possession Rules provides that where confirmed attached property is hypothecated, mortgaged or pledged to a bank or financial institution, the authorised officer may direct that institution to retain the property and related interest or dividend subject to further orders.

Priority and enforcement disputes between PMLA attachment and secured-creditor action are highly fact specific. The parties should not assume that:

• A prior mortgage automatically defeats ED attachment;
• ED attachment automatically extinguishes every secured interest;
• SARFAESI proceedings conclusively resolve PMLA ownership;
• A bank auction always creates an indefeasible title; or
• An attachment order by itself determines the final distribution of value.

Property in the Custody of Another Court or Authority

A property may already be under the control of:

• A civil court;
• A criminal court;
• A DRT Recovery Officer;
• An NCLT-appointed resolution professional or liquidator;
• A court receiver;
• RERA or another regulatory authority;
• A state revenue authority;
• A police investigating agency; or
• Another ED proceeding.

Rule 7 provides that where confirmed attached property is in the custody of a court, the authorised officer must apply to that court with the PAO and confirmation order and seek release of the property and related interest or dividend in favour of ED.

This means that confirmed attachment should not ordinarily be implemented by simply ignoring the custody or orders of another judicial forum.

Section 8 Adjudication in a Multi-State Attachment

Within thirty days of the PAO, ED must file its complaint before the Adjudicating Authority.

If the Adjudicating Authority records the required reason to believe, it may issue a notice of not less than thirty days.

The notice calls upon the affected person to explain:

• Source of income;
• Source of earnings;
• Source of assets;
• Manner of acquisition;
• Evidence relied upon;
• Ownership and beneficial ownership;
• Other relevant information; and
• Why the property should not be declared involved in money laundering.

Joint and Beneficial Ownership Notices

Where the property is held on behalf of another person, a copy of the notice must also be served on that other person.

Where property is jointly held, notice must be served upon all joint holders.

Third-Party Claims

A claimant who was not originally served may seek an opportunity to establish that the property is not involved in money laundering.

Property-Wise Reply

Where the PAO contains assets across several states, the reply should not treat them as one undifferentiated block.

A separate schedule should be prepared for every property containing:

• Property number;
• State and district;
• Recorded owner;
• Beneficial-owner allegation;
• Acquisition date;
• Purchase consideration;
• Source of funds;
• Loan details;
• Current possession;
• Joint owners;
• Tenant or mortgagee;
• ED’s alleged nexus;
• Defence documents; and
• Relief requested.

Does the Adjudicating Authority Have to Sit in the State Where the Property Is Located?

Not necessarily.

Section 6 provides that Benches of the Adjudicating Authority ordinarily sit at New Delhi and at other places notified by the Central Government. The Central Government may specify the areas over which each Bench exercises jurisdiction.

Adjudication under Sections 5 and 8 is therefore different from an ordinary civil title suit concerning local immovable property.

The Adjudicating Authority examines whether the property is involved in money laundering. It does not merely decide local mutation, boundary or possession disputes.

However, where ownership, title, tenancy, succession, mortgage or beneficial interest is disputed, the affected party must place the relevant state-specific property documents before the Authority.

Role of the Registrar and Sub-Registrar in Each State

After confirmation of attachment, the authorised officer may issue notice to the Registrar having jurisdiction over the area in which the property is situated.

The notice may require the Registrar or Sub-Registrar not to:

• Register a sale deed;
• Register a gift deed;
• Register a mortgage;
• Register a lease creating further interest;
• Register a release or relinquishment;
• Register a development agreement;
• Create or recognise another transfer; or
• Permit dealing with the property contrary to the attachment.

For properties in several states, separate implementation may be required before each jurisdictional registration authority.

For example:

• A Gurugram property requires action before the concerned Haryana registration authority;
• An Agra property requires action before the relevant Uttar Pradesh authority;
• A Mumbai property requires action before the relevant Maharashtra authority;
• A Himachal Pradesh resort requires action before the appropriate local registration and revenue authorities; and
• A Punjab land parcel requires action before the concerned Sub-Registrar and revenue offices.

Revenue Records, Mutation and Municipal Entries

Immovable property may also appear in:

• Jamabandi records;
• Khata and khasra records;
• Mutation registers;
• Municipal assessment records;
• Property-tax records;
• Development-authority records;
• Housing-society records;
• RERA project records;
• Industrial-development authority records;
• Leasehold-conversion records; and
• Local land-revenue databases.

ED may communicate the attachment to state or local authorities so that the restraint is reflected or acted upon.

The defence should verify:

• Whether the correct property number was communicated;
• Whether unrelated land was included;
• Whether the recorded area is correct;
• Whether only a fractional share is attached;
• Whether the owner’s name is accurately described;
• Whether a clerical mismatch affects another property; and
• Whether a later mutation entry incorrectly enlarges the PAO.

Taking Possession after Confirmation

Section 8(4) and the 2013 Taking Possession Rules contain the framework for possession after confirmation.

At the same time, the Supreme Court has explained that taking physical possession before final confiscation should not be applied mechanically in every case and is intended for exceptional situations where interim possession is necessary to protect the proceedings.

The distinction between attachment and immediate dispossession is therefore important.

Land, House, Building or Flat Occupied by the Owner

The Rules provide for:

• Notice to the jurisdictional Registrar;
• Affixation of the confirmation order at a conspicuous part of the property;
• A ten-day eviction notice to an owner-occupant; and
• Assistance from local authorities if possession is lawfully taken.

Registered Tenant

The authorised officer may direct the tenant to pay rent to ED.

Unregistered or Optionally Registered Tenancy

The Rules contemplate vacation and possession with local-authority assistance, subject to any legal challenge concerning the tenant’s bona fide rights.

Productive Asset or Running Factory

Where the property is a productive establishment or running factory, the Rules permit possession with a direction that gross income or monetary benefits be deposited in the ED account.

Jointly Owned Property

An equivalent-value fixed deposit may be considered to the extent of the concerned person’s share.

Possession Requires State-Level Implementation

A Delhi ED officer does not physically relocate land from another state. Implementation occurs where the property is situated.

Depending upon the property, ED may require assistance from:

• Local police;
• District administration;
• Registrar or Sub-Registrar;
• Revenue officers;
• Municipal authorities;
• Development authorities;
• Motor-vehicle registering authorities;
• Banks and financial institutions;
• Housing societies;
• Factory or industrial authorities; and
• Other state or local bodies.

Section 54 expressly requires specified officers, including police officers and Registrars or Sub-Registrars, to assist in enforcement of the PMLA.

Is an Appeal Automatically a Stay?

No.

Filing an appeal under Section 26 does not automatically suspend the confirmation order or possession action.

The appellant should consider filing a specific interim application seeking:

• Stay of the confirmation order;
• Stay of possession proceedings;
• Status quo regarding ownership and possession;
• Restraint against eviction;
• Permission to continue a productive business;
• Permission to collect or use rent subject to conditions;
• Protection of innocent co-owners;
• Protection of a bona fide tenant;
• Segregation of an attached share;
• Substitution through security or fixed deposit; or
• Protection against irreversible third-party consequences.

The application should explain why interim relief is necessary and how ED’s interest can remain secured.

Appeal to the PMLA Appellate Tribunal

Section 26 permits a person aggrieved by an order of the Adjudicating Authority to appeal to the Appellate Tribunal.

The appeal is ordinarily required within forty-five days from receipt of the order.

The Tribunal may consider a delayed appeal where sufficient cause is established.

A multi-state property appeal should ordinarily include:

• PAO;
• Section 8 notice;
• Reply and annexures;
• Confirmation order;
• Property schedules;
• Sale deeds and title documents;
• Bank and source-of-funds records;
• Valuation objections;
• Mortgage and tenancy documents;
• Possession notices;
• Proof of receipt of the impugned order;
• Interim-relief application; and
• A state-wise and property-wise synopsis.

Which High Court Has Jurisdiction under Section 42?

A Section 42 appeal is filed against a decision or order of the Appellate Tribunal on a question of law or fact.

The ordinary limitation period is sixty days from communication of the Tribunal’s decision. The High Court may allow a further period not exceeding sixty days where sufficient cause is shown.

For the aggrieved private party, the statutory definition identifies the High Court within whose jurisdiction the aggrieved party:

• Ordinarily resides;
• Carries on business; or
• Personally works for gain.

This means that the following assumptions may be incorrect:

• Delhi High Court always has jurisdiction because the Adjudicating Authority sits in Delhi;
• The High Court of the state where the property is located always has Section 42 jurisdiction;
• The location of the ED office alone determines the High Court; or
• All owners of properties in different states must necessarily file in different High Courts.

The statutory residence or business of the aggrieved appellant, identity of the parties and nature of the order must be examined before filing.

Writ jurisdiction is a separate constitutional question and depends upon cause of action, territorial facts, availability of statutory remedies and the nature of the challenge.

Which Special Court Tries the Delhi PMLA Case?

The Special Court dealing with the money-laundering prosecution is not selected merely because an attached property is situated in a particular state.

Sections 43 and 44 provide for designated Special Courts and refer to the area in which the offence has been committed.

A Delhi Special Court may therefore deal with a prosecution even though some attached properties are located outside Delhi, depending upon:

• Location of the alleged money-laundering activity;
• Scheduled-offence proceedings;
• Place where funds were received or layered;
• Location of the investigated company;
• Designation notification;
• Case or class of cases assigned to the Special Court; and
• Orders concerning transfer or committal of the scheduled offence.

The property’s local state remains important for registration, possession, valuation, title and execution issues, but it does not alone determine the trial court.

Recent Example: New Delhi Case with Properties in Three States

In January 2026, ED publicly stated that movable and immovable properties valued at approximately ₹51.57 crore were attached in a case involving a real-estate company investigated by its Headquarters office in New Delhi.

The properties were stated to include a villa, hotel and resort property, office spaces and land parcels situated in:

• Gurugram, Haryana;
• Himachal Pradesh; and
• Maharashtra.

A prosecution complaint was filed before the Special Court at Patiala House Courts, New Delhi.

The example demonstrates that one Delhi-linked PMLA case may include several property categories situated across different states.

The factual allegations contained in an ED press release remain subject to proof, adjudication and judicial review.

Recent Example: Delhi Zonal Office Attaching Punjab Properties

In February 2026, ED’s Delhi Zonal Office publicly stated that it had provisionally attached 247 immovable properties valued at approximately ₹10,021.46 crore in the PACL investigation.

The properties were stated to be located in:

• SAS Nagar;
• Rupnagar;
• Zirakpur; and
• Mohali.

The predicate FIR had been registered by CBI in New Delhi. ED stated that its cumulative attachments in the case included assets situated in India and abroad.

The example illustrates that the investigating and prosecuting centre need not be the state in which every attached property is physically located.

Recent Example: New Delhi Unit Attaching a Gurugram Property

In January 2026, ED’s Headquarters Investigation Unit in New Delhi stated that it provisionally attached a luxury residential property situated in Gurugram, Haryana, along with bank balances in a loan-diversion investigation.

ED stated that the investigation arose from FIRs registered by the Economic Offences Wing, Delhi Police.

The example shows the practical distinction among:

• Location of the predicate FIR;
• Location of the investigating ED unit;
• Location of the attached property;
• Location of bank accounts; and
• Location of the eventual Special Court proceedings.

Recent Example: Alternative Properties in Agra

In February 2026, ED’s Headquarters Investigation Unit-II stated that it attached land valued at more than ₹598 crore situated in Agra, Uttar Pradesh, in a case arising from a CBI New Delhi FIR.

ED publicly stated that the original property alleged to constitute proceeds of crime had been developed and sold to third-party homebuyers. It therefore attached alternative immovable properties in Agra that it alleged were held through associated land-holding entities.

This example highlights several important issues:

• Protection of innocent homebuyers;
• Loss of identity of the alleged direct proceeds;
• Attachment of alternative property;
• Beneficial ownership of land-holding entities;
• Property situated in a state different from the investigative centre; and
• Need for careful value-equivalent calculation.

ED’s statements remain allegations subject to statutory adjudication and judicial determination.

Principal Grounds for Challenging Multi-State Attachment

1. No Valid Scheduled-Offence Foundation

The predicate offence relied upon must fall within the PMLA Schedule and remain legally capable of supporting the alleged proceeds-of-crime case.

2. No Identified Proceeds of Crime

ED should identify the property generated from criminal activity rather than equate the entire business turnover, project collection or loan amount with proceeds of crime without analysis.

3. No Transactional Nexus

The PAO may fail to explain how money moved from the alleged criminal activity to the specific out-of-state property.

4. Wrong Owner or Beneficial Owner

The property may belong independently to a spouse, company, trust, co-owner, lender, purchaser or other person.

5. Lawful Source of Acquisition

Bank statements, loans, tax returns, inheritance records and historical income may prove independent acquisition.

6. Property Predates the Crime Period

This may contradict an allegation that the property is direct proceeds and require ED to justify any alternate-value theory.

7. Excessive Valuation

ED may use an unsupported estimated market value, count the same value more than once or attach assets far exceeding the quantified proceeds.

8. Double Attachment

The same proceeds-of-crime amount may already be covered through:

• Bank balance;
• Direct property;
• Related-company property;
• Value-equivalent property;
• Foreign asset; or
• Another PAO.

9. No Property-Specific Reasons

A generic statement concerning several defendants and numerous properties may be challenged where the PAO does not explain the nexus, possession, urgency or value for the concerned property.

10. Non-Service on Joint Owners

All joint holders should receive the statutory notice.

11. Ignoring Third-Party Rights

Bona fide purchasers, tenants, mortgagees and innocent co-owners are entitled to place their claims before the competent forum.

12. Premature or Mechanical Possession

Physical dispossession before final confiscation may be challenged where no exceptional circumstance exists and ED’s interest can be protected through a less intrusive restraint.

13. Incorrect State-Level Implementation

The wrong Registrar, wrong property number, incorrect area, unrelated parcel or defective possession notice may create serious implementation issues.

14. Officer’s Authority or Case Assignment

The authorisation and jurisdiction of the officer may be examined under Sections 5 and 51.

15. Failure to Consider Exculpatory Material

The PAO and confirmation process should not ignore documents establishing lawful ownership, prior acquisition, genuine tenancy, mortgage or independent consideration.

Documents to Collect for Every Attached Property

• PAO and complete property schedule;
• Section 8 notice;
• Original complaint filed by ED;
• Confirmation order;
• Possession notice;
• Registrar or Sub-Registrar communication;
• Revenue-record entry;
• Registered sale deed;
• Agreement for sale;
• Allotment letter;
• Possession letter;
• Mutation and jamabandi records;
• Municipal property records;
• Property-tax receipts;
• Home or business loan documents;
• Bank statements showing payment;
• Stamp-duty and registration payments;
• Construction or development records;
• Inheritance or family-settlement documents;
• Income-tax returns;
• Audited financial statements;
• Rent and lease agreements;
• Mortgage and charge records;
• Valuation reports;
• Encumbrance certificates;
• RERA and development-authority documents;
• Company beneficial-ownership records;
• Joint-owner contribution records;
• Evidence of current occupation;
• Evidence of bona fide third-party rights; and
• Proof of receipt of every order for limitation purposes.

State-Wise Property Defence Matrix

Where a PAO contains properties in several states, prepare a single consolidated table with separate rows for every asset.

Field	Required Information
Property ID	PAO serial number and internal defence reference
Location	State, district, village, municipal area and complete address
Title	Recorded legal owner and beneficial-owner allegation
Acquisition	Date, document number, seller and purchase value
Source	Bank account, loan, income, inheritance or business funds
ED Theory	Direct, indirect, layered or value-equivalent property
Third Parties	Co-owner, tenant, bank, purchaser or other claimant
Current Status	Attached, confirmed, possession notice, appeal or stay
Local Records	Registrar, mutation, municipal and authority entries
Defence	Primary legal and factual objections

Immediate Steps after Receiving a Multi-State PAO

1. Record the exact date and mode of service.
2. Obtain the full PAO, not merely the first page or property list.
3. Identify every property and owner.
4. Contact all joint owners and affected entities.
5. Collect title and source-of-funds documents state by state.
6. Verify whether the property number and area are correct.
7. Check existing mortgages, tenancies and court proceedings.
8. Prepare an independent proceeds-of-crime calculation.
9. Identify whether ED alleges direct or alternate property.
10. Check whether the thirty-day Section 5 complaint was filed.
11. Prepare a property-wise Section 8 reply.
12. Monitor communication to Registrars and revenue authorities.
13. Oppose premature possession where grounds exist.
14. File the Section 26 appeal within forty-five days of receipt of the confirmation order.
15. File a specific interim-stay application.
16. Preserve original documents and electronic records.
17. Do not transfer, encumber or create artificial third-party rights.
18. Maintain one consistent factual position before all forums.

Frequently Asked Questions

Can Delhi ED attach a property situated in Haryana?

Yes. The property’s location in Haryana does not by itself prevent attachment in a Delhi-linked PMLA investigation. The statutory authority, proceeds-of-crime nexus and local implementation procedure must still be established.

Can Delhi ED attach property situated in Uttar Pradesh?

Yes. ED Headquarters and Delhi-linked units have publicly reported attachments of properties situated in Uttar Pradesh. Every attachment remains open to property-specific adjudication and appeal.

Can one PAO include properties in Delhi, Haryana and Maharashtra?

Yes. A single PAO may contain assets in several states where ED alleges that they form part of the same money-laundering investigation or proceeds-of-crime calculation.

Does ED need a separate ECIR for every state?

Not merely because different properties are situated in different states. The issue is whether the properties are connected with the same investigation and whether the concerned authority is lawfully assigned the case.

Does ED need permission from the state government?

PMLA is a central law extending throughout India. State and local officers listed under Section 54 are required to assist. Separate state-government consent is not ordinarily a precondition merely because the property lies in that state.

Can ED attach agricultural land?

Yes. Agricultural land falls within the broad definition of immovable property. Its nature, title, state land law and proceeds-of-crime nexus remain material.

Can ED attach a family home?

It may be attached where ED alleges that it represents proceeds of crime or legally attachable equivalent value. The owner may contest source, date, ownership, proportionality and the statutory basis.

Can ED attach property owned by the accused’s spouse?

It may be investigated and attached where beneficial ownership or funding from proceeds of crime is alleged. Relationship alone is not conclusive.

Can ED attach inherited property?

ED may attempt alternate-value attachment in appropriate circumstances, but inherited title, acquisition date, source and absence of proceeds-of-crime connection are important defence issues.

Can ED attach only one co-owner’s share?

The PAO should accurately identify the concerned interest. Attachment of an entire jointly owned property may be contested where innocent co-owners hold independently funded shares.

Must all joint owners receive notice?

Section 8 requires service on all persons jointly holding the property.

Can a tenant be evicted after attachment?

Possession depends upon confirmation, the nature of the tenancy, registration, the Taking Possession Rules and applicable judicial safeguards. A genuine tenant may place its claim before the competent forum.

Can a bank continue SARFAESI proceedings against attached property?

The interaction is fact specific. The date and nature of mortgage, attachment, default, auction and third-party rights must be examined. Neither proceeding should be considered in isolation.

Can ED attach a property already in court custody?

It may attach the interest, but after confirmation the Rules require an application to the court holding custody for release in favour of ED.

Can ED attach property acquired before the alleged crime?

A pre-crime property ordinarily cannot logically be direct proceeds of later criminal activity. ED may nevertheless allege value-equivalent attachment, which must be separately tested.

Can ED attach more property than the alleged proceeds of crime?

The attachment may be challenged for excessive valuation, double counting and disproportionality where the total attached value materially exceeds the properly quantified proceeds.

Can ED attach property belonging to a company when only its director is accused?

Separate company ownership must be respected unless ED establishes that the company received the proceeds, acted as a conduit or held the property beneficially for the accused.

Does confirmation mean the property is finally confiscated?

No. Confirmation continues the attachment. Final confiscation is ordinarily ordered by the Special Court under the statutory framework.

Can ED immediately take physical possession after provisional attachment?

Provisional attachment alone generally restrains transfer. Possession is addressed after confirmation under Section 8(4), and Supreme Court guidance requires interim physical possession to be approached non-mechanically and in exceptional circumstances.

How much notice is given under Section 8?

The Adjudicating Authority’s show-cause notice must provide not less than thirty days.

What is the appeal period against confirmation?

A Section 26 appeal is ordinarily filed within forty-five days from receipt of the Adjudicating Authority’s order, subject to the Tribunal’s power to consider sufficient cause for delay.

Does filing an appeal stop possession?

No. A separate interim-stay or status-quo application should be filed.

Which High Court hears the appeal after the Appellate Tribunal?

For a private aggrieved party, Section 42 identifies the High Court where the party ordinarily resides, carries on business or personally works for gain. It is not automatically the High Court where the property lies.

Can Delhi High Court be approached because the Adjudicating Authority is in Delhi?

Not automatically. Statutory appellate jurisdiction and constitutional writ jurisdiction must be separately analysed.

Can a bona fide purchaser challenge the attachment?

Yes. A genuine purchaser may place title, consideration, due diligence, possession and absence of knowledge before the Adjudicating Authority, Appellate Tribunal or other competent forum.

Can lawful property be substituted with a fixed deposit?

The Taking Possession Rules expressly refer to a fixed-deposit option for the concerned share in jointly owned property. Other substitution requests may depend upon the facts and orders of the competent forum.

Can an attached property be restored to victims?

Section 8(8) permits restoration to a claimant with a legitimate interest who suffered quantifiable loss, acted in good faith, took reasonable precautions and was not involved in money laundering, subject to the statutory process.

What should be done immediately after receiving a possession notice?

Obtain the confirmation order, verify service and property particulars, examine the legal basis for possession, collect occupation and third-party documents, file the appropriate appeal or application and seek urgent interim protection where warranted.

AI-Search Quick Answer

Can properties in different states be attached in a Delhi PMLA case?

Yes. The PMLA extends throughout India and defines property broadly to include assets wherever located. A Delhi-linked ED investigation may therefore include properties situated in Haryana, Uttar Pradesh, Punjab, Maharashtra, Himachal Pradesh or another state. Each property must still be supported by a scheduled-offence and proceeds-of-crime nexus, lawful officer authorisation, proper Section 8 notice and state-specific registration or possession procedure.

Key Takeaway

The legally correct sequence is:

Scheduled offence → proceeds-of-crime calculation → financial trail → identification of each property → ownership and beneficial ownership → Section 5 reasons to believe → thirty-day complaint → Section 8 notice and hearing → confirmation → state-level registration action → exceptional possession where justified → appeal and interim relief → final confiscation or release.

The fact that properties lie in several states does not invalidate the attachment. It also does not permit ED to treat every asset, owner and location as legally identical.

Conclusion

A Delhi PMLA investigation can lawfully extend to properties situated throughout India. Modern money-laundering investigations frequently involve companies, bank accounts, projects and assets spread across several states.

The defence should not rely only upon the argument that the property is outside Delhi. The stronger approach is to examine:

• The officer’s case assignment and authority;
• The scheduled-offence foundation;
• The quantified proceeds of crime;
• The exact trail to each property;
• Direct versus value-equivalent attachment;
• Legal and beneficial ownership;
• Acquisition date and lawful source;
• Joint owners and third-party rights;
• State registration and possession procedure;
• Valuation and double counting;
• Adjudication and appellate limitation; and
• The need for immediate interim protection.

A property-wise and state-wise defence is substantially more effective than one general reply covering all assets.

Legal Consultation with Advocate Ankit Kumar Singh

Advocate Ankit Kumar Singh
Supreme Court of India; Patna High Court; other High Courts; Allahabad High Court and its Lucknow Bench; Jharkhand High Court at Ranchi; Calcutta High Court; and High Court of Madhya Pradesh matters concerning Bhopal.

Legal consultation and case preparation may be considered in matters involving provisional attachment orders, properties situated in several states, Section 8 notices, joint ownership, family property, company assets, bona fide purchasers, tenants, mortgages, possession notices, Adjudicating Authority proceedings, Appellate Tribunal appeals and High Court remedies under the PMLA.

Contact: 8294431232
Email: ankitsingh.legum@gmail.com
Website: advocateankitkumarsingh.in

Book a legal consultation with Advocate Ankit Kumar Singh

No judicial, adjudicatory, investigative or administrative result can be guaranteed. Legal strategy depends upon the predicate offence, property documents, ownership, source of funds, PAO, confirmation order, possession action and procedural stage of the individual matter.

Related Legal Resources

• PMLA, ED and white-collar-crime legal services
• Important provisions governing ED attachment, arrest and trial
• Proceeds of crime and scheduled offences under PMLA
• Bank fraud and diversion of business loans through related companies
• Cross-border transactions and attachment of foreign or domestic assets
• Important Supreme Court judgments governing PMLA proceedings
• Service areas for PMLA, ED and property-attachment matters
• Complete legal blog and research index

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