ED can’t attach assets by sending communication to sub-registrar

The bench made it clear that there is no provision under the PMLA for the ED to issue communications in lieu of provisional orders of attachment and attach one's properties.
(L) Madras High Court; Enforcement Directorate(R)
(L) Madras High Court; Enforcement Directorate(R)File Photo

CHENNAI: The Madras High Court held that in a Prevention of Money Laundering Act (PMLA) case, the Enforcement Directorate (ED) has no power to attach property by straight away issuing a communication to the sub-registrar asking him not to register that particular properties.

“ED cannot by way of a communication to the Sub-Registrar encumber and attach the properties of the petitioner and thereafter, completely forgets about it,” the bench comprising Justice PN Prakash and Justice N Anand Venkatesh held.

The court passed the orders on allowing a petition filed by M Muruganandam. The petitioner prayed to quash ED’s notice and reminder dated May 2 and 25, 2018, issued to the Vembakkam and Dusi Sub-Registrars in Tiruvannamalai district.

ED asked the authorities not to allow any transactions in respect of the properties of the petitioner. The ED cited that it has registered ECIR against the petitioner under the PMLA arising out of an FIR filed by Central Crime Branch (CCB) Chennai.

“The power of the ED to issue a provisional order of attachment flows from Section 5 of the PMLA and the same has to be confirmed by the adjudicating authority within 180 days thereafter,” Justice Prakash wrote. The bench made it clear that there is no provision under the PMLA for the ED to issue communications in lieu of provisional orders of attachment and attach one's properties.

Since one Balaravichandurudu had a civil dispute with the petitioner, the former filed a complaint and an FIR under various sections was booked against the petitioner. Thereafter, the ED booked the petitioner under PMLA.

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