Abdul Rasheed @ Dr.A.R.Babu vs The Deputy Director on 18 December, 2025

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Kerala High Court

Abdul Rasheed @ Dr.A.R.Babu vs The Deputy Director on 18 December, 2025

These appeals have been preferred against the common judgment dated 07.07.2025 passed by the learned Single Judge of this Court in W.P.(Crl) Nos. 48, 124 and 151 of 2025. The above petitions were preferred by the petitioners challenging the orders passed by the competent authority under section 8 of the Prevention of Money Laundering Act, 2002 ('PMLA' for the sake of brevity). The learned Single Judge relying on the observations made in Mohankumar K. and Another v. Union of India and Ors.1 held that when the Act provides for an appellate remedy, against an order passed under section 8, no interference was warranted. The Writ Petitions were accordingly dismissed granting the petitioners the liberty to agitate their grievance before the competent authority in accordance with law. The learned Single Judge also made it clear that the time during which these writ petitions were pending before this Court would stand excluded while calculating the period of limitation. The above orders are under challenge in these Appeals.

2. W.A.No. 1938 of 2025 is filed by Heera Summer Homes Pvt. Ltd., represented by its Managing Director, Sri. Abdul Rasheed. W.A.No. 1926 of 2025 is 1 [2025 SCC OnLine Ker.4188] W.A.Nos.1926 of 2025 & connected cases :8: 2025:KER:97426 filed by Abdul Rasheed in its personal capacity and W.A.No. 1929 of 2025 is filed by Heera Educational and Charitable Trust, represented by its Managing Trustee, Sri. Abdul Rasheed.

3. The facts revealed that Crime No. RCO3(A)/19/CBI/ACB/Cochin dated 10.04.2019 against Sri. Abdul Rasheed, his family members and an entity by name "Heera Construction Company Pvt. Ltd." (HCCPL) in respect of a project loan secured by HCCPL of which the family members were Directors. The said company which was engaged in real estate was enjoying a credit facility. A project loan of Rs.15 Crores was sanctioned to HCCPL for the project "Heera Lake Front" at Akkulam on 27.09.2013 through the Kowdiar Branch of SBT to be repaid by 23.12.2016. The said loan was secured by the equitable mortgage of various items of property which included certain flats in an Apartment Project by name "Heera Lake Front" at Akkulam and an item of property having an undivided share of 30.995 cents in a total extent of 52.153 cents along with 26 shop rooms of Heera Plaza, Kollam and situated in Kollam East Village. Based on request of the HCCPL, the bank granted permission for part release of the mortgage property on the premise that the security available was sufficient to cover the exposure of the bank to the company. Later, it was revealed that HCCPL had sold the property which was kept as collateral security and they had also not remitted the same proceeds to the bank to bring down the liability. It was also revealed that the properties were sold by HCCPL without the permission of the bank. The loan was classified as NPA on W.A.Nos.1926 of 2025 & connected cases :9: 2025:KER:97426 29.5.2017. When the bank initiated action to take possession of the primary security, being Heera Lake Front consisting of 72 apartments, it was revealed that almost all the flats had been sold by the company. On the allegation that the acts on the part of the accused tantamount to offences, a Crime was registered under Section 420 r/w. Section 120B and Section 13(2) r/w. Section 13(1)(d) of the Prevention of Corruption Act, 1988. It is based on the above FIR that the Directorate of Enforcement registered ECIR/KCZO/08/2021 under Sections 3 and 4 of the PMLA.

4. On 15.2.2023, the ED conducted a search and seized original title deeds in respect of the properties owned by Sri. Abdul Rasheed, Heera Construction Company Pvt. Ltd., Heera Summer Holiday Home Pvt. Ltd. and Heera Educational & Charitable Trust. The retention of the above properties was confirmed by the adjudicating authority. Challenging the same, the appellant approached this Court and filed W.P.(Crl) No. 772 of 2023. By order dated 17.08.2023, a learned Single Judge of this Court directed the ED to return the 63 original title deeds seized by them on the premise that the provisions of the PMLA permits enjoyment of the immovable properties by the owner even if they are attached under Section 5. Directions were however issued not to assign or carry out any transactions to the detriment of the investigation. The petitioner asserts that a provisional attachment order was issued under Section 5(1) of the PMLA, 2002, which stood confirmed by Ext.P5 order issued by the adjudicating authority. W.A.Nos.1926 of 2025 & connected cases :10: 2025:KER:97426

5. Challenging Exts.P3 provisional order and Ext.P5 confirmation order, the petitioners approached this Court and filed separate writ petitions which were dismissed by the learned Single Judge by the impugned order. The learned Single Judge, however, granted liberty to the petitioners to agitate before the competent authority in accordance with law. It was ordered that if any appeal is filed, the time during which the Writ Petitions were pending consideration before the learned Single Judge shall be excluded while calculating the period of limitation. It appears that acting on the liberty granted by the learned Single Judge, the appellants preferred separate appeals before the Appellate Tribunal and the statutory fee was also remitted. The appellants contend that the appeals were returned as defective and no opportunity was granted to cure the same. According to the appellants, the ED acted without jurisdiction as the properties that have been attached were all acquired long before the alleged illegal activity. The appellants contend that the Apex Court in Pavana Dibbur v. Directorate of Enforcement2, has held that the property acquired before the commission of the alleged offence cannot be proceeded under the PMLA, 2002. Reliance is also placed on the observations made by a Three Judge Bench of the Apex Court in Vijaya Madhanlal Choudary v. Union of India3, and it is argued that the Hon'ble Court has held that property not derived or obtained in pursuance to a criminal activity cannot be brought within the purview of the PMLA. It is urged that though the learned Single Judge 2 [(2023) 15 SCC 91] 3 [(2023) 12 SCC 1] W.A.Nos.1926 of 2025 & connected cases :11: 2025:KER:97426 permitted the appellants to exhaust the alternate remedy, it is illusory as the appeal preferred by the appellant was returned on technical issues and no proper opportunity was granted.

6. Sri. S. Sreekumar, the learned Senior counsel appearing for the appellants submitted that the learned Single Judge had committed a grave error in rejecting the writ petition on the grounds of availability of alternative remedy. According to the learned counsel, the exhaustion of alternate remedy is a rule of discretion and not one of compulsion. Though the normal rule is that the courts may refrain from entertaining a writ petition under Article 226 of the Constitution when alternate remedies exist, when exceptional cause is shown such as when the the petitioner is seeking enforcement of any of his fundamental rights or where there is violation of principles of natural justice or where the order or the proceedings are without jurisdiction or where the vires of an Act is challenged, the Court can exercise its Writ jurisdiction and deal with such cases. Reliance is placed on the judgment of the Apex Court in PHR Invent Educational Society v. UCO Bank and Ors.4 and it was urged that in cases wherein the statutory authority has not acted in accordance with the provisions of the enactment in question, a petition under Article 226 of the Constitution could be entertained despite the availability of an alternate remedy. Reliance is also placed on the judgment rendered by a learned Single Judge of this Court in Davy Varghese v. Deputy Director, Directorate 4 (2024) 6 SCC 579 W.A.Nos.1926 of 2025 & connected cases :12: 2025:KER:97426 of Enforcement5, Satish Motilal Bidri v. Union of India6 and it was forcefully urged that the power of provisional attachment can be exercised in respect of property that is derived or obtained, directly or indirectly from a criminal activity relating to a scheduled offence and under no circumstances can properties acquired before the commission of an alleged offence be attached under the Act as they do not constitute proceeds of crime.

7. Sri. Jayasankar V. Nair, the learned Standing Counsel appearing for the Enforcement Directorate, submitted that the contention advanced by the learned Senior counsel is without reckoning the true nature and purport of the definition of "proceeds of crime" as defined under Section 2(1)(u) of the PMLA, the definition of "property" as defined under Section 2(1)(v) and "Value" as defined under Section 2(zb). The attention of this Court was invited to para 11 of Ext.P3 and it is submitted that a tentative assessment of the proceeds of the crime has been calculated to be Rs.34.82 Crores split up into Rs.21.50 Crores being the outstanding loan amount as on 30.09.2022, 1.15 Crores being the sale proceeds of mortgaged property and Rs.12.17 Crores being the net sale proceeds in the hands of HCCPL. It is further submitted that the attached immovable properties were shortlisted for provisional attachment under Section 5(1) of PMLA to recover the proceeds of the crime, as being equivalent in value as per the second limb of Section 2(1)(u) of PMLA. Profuse reliance was placed on paragraph 172 of Vijay 5 2025 (1) KHC 409 6 2024 SCC (OnLine ) KER 3410 W.A.Nos.1926 of 2025 & connected cases :13: 2025:KER:97426 Madanlal Choudhary (supra) wherein the argument advanced that the attachment of the property must be equivalent in value of the proceeds with the crime only if the proceeds with the crime are situated outside India was repelled. It is urged that the definition of "Proceeds of Crime" was wide enough to not only refer to the property equivalent in value of any such property. It is further submitted that either party, including the authority, if aggrieved by the order passed by the adjudicating authority, can file an appeal under Section 26 of the Act, particularly under sub-section (l) of S.26. That apart, even a decision rendered by the Appellate Tribunal is appealable under S.42 of the Act. Any person aggrieved by the decision or order of the Appellate Tribunal would be entitled to file an appeal before the High Court within the prescribed period of limitation. It is further submitted that the appellants had acted upon the directions issued by the learned Single Judge and had preferred an appeal before the Appellate Authority and had even remitted the fees. However, on a tenuous contention that some defect was noted, they have, without prosecuting the appeal, ventured to file an appeal. Having elected the remedy suggested by the learned Single Judge, there was no justification in again approaching this Court in appeal, contends the learned Counsel.

8. We have carefully considered the submissions advanced.

9. We shall first deal with the contention advanced by the learned Standing Counsel that the learned Single Judge was well justified in relegating the W.A.Nos.1926 of 2025 & connected cases :14: 2025:KER:97426 parties to its statutory remedy. A perusal of the statutory framework reveals that Chapter III of the Prevention of Money Laundering Act, 2002 deals with attachment, adjudication, and confiscation of property. An order passed under Section 5(1) of the Act is merely provisional in nature, and its validity extends only for a period of 180 days, subject to confirmation by an independent Adjudicating Authority. Under Section 5(2), the officer issuing the provisional attachment order is mandated to forward a copy of the same to the Adjudicating Authority in a sealed envelope. Sub-section (5) of Section 5 requires that a complaint be filed by the said officer before the Adjudicating Authority within 30 days of the order. The said exercise has in fact been carried out in the instant case. As per Section 8(1) of the Act, upon receipt of the complaint, if the Adjudicating Authority has reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime, it may issue a show cause notice to such person. The notice shall call upon the noticee to disclose the sources of his income, earnings, or assets through which the property under provisional attachment was acquired, and to produce supporting evidence, relevant particulars, and information, demonstrating why such property should not be declared as involved in money laundering and consequently confiscated by the Central Government. Section 8(2) further mandates the Adjudicating Authority to consider the reply submitted by the noticee, provide an opportunity of hearing to both the notice and the officer issuing the provisional attachment, and take into account all materials on record before arriving at a conclusion. Upon due consideration, the Adjudicating W.A.Nos.1926 of 2025 & connected cases :15: 2025:KER:97426 Authority may record its findings on whether all or any of the properties mentioned in the notice are involved in money laundering. The Authority may either confirm or decline to confirm the provisional attachment order accordingly. Under Section 8(4), upon confirmation of the provisional attachment, the authorised officer shall take possession of the attached property. Under Section 8(5), upon conclusion of the trial, if the Special Court finds that the offence of money laundering has been committed, it shall order that the property involved in such offence shall stand confiscated to the Central Government. Conversely, under Section 8(6), if the Court finds that no offence of money laundering has taken place, or that the property is not involved in money laundering, it shall order release of the property.

10. Section 26 of the PMLA speaks about Appeals to the Appellate Tribunal. It says that the Director or any person aggrieved by an order passed by the Adjudicating Authority under this Act may prefer an appeal to the Appellate Tribunal, and any reporting entity aggrieved by an order of the Director passed under sub-section (2) of Section 13 may likewise file an appeal before the Appellate Tribunal. Every such appeal shall be filed within forty-five days from the date of receipt of a copy of the order of the Adjudicating Authority or the Director, as the case may be, in the prescribed form and accompanied by the prescribed fee; however, the Appellate Tribunal may, after affording an opportunity of being heard, entertain an appeal filed after the expiry of the said period if it is satisfied that there was sufficient cause for the delay. Upon receipt of an appeal, the Appellate W.A.Nos.1926 of 2025 & connected cases :16: 2025:KER:97426 Tribunal shall, after giving the parties an opportunity of being heard, pass such orders as it deems fit, including confirming, modifying, or setting aside the order appealed against, and shall communicate a copy of every such order to the parties to the appeal as well as to the concerned Adjudicating Authority or the Director, as applicable. The Appellate Tribunal is to endeavour to dispose of the appeal finally within six months from the date of its filing.

11. A further appeal is provided to the High Court under Section 42 of the Act. The said provision provides that any person aggrieved by a decision or order of the Appellate Tribunal may prefer an appeal to the High Court within sixty days from the date on which the decision or order is communicated to him, on any question of law or fact arising out of such decision or order. The High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, permit the appeal to be filed within a further period not exceeding sixty days.

12. In the case on hand, in terms of the directions issued by the learned Single Judge, an appeal was preferred by the Appellants before the Appellate Tribunal . Requisite Court fee was also remitted. It is contended that some defect was noted and hence it is urged that the appeal provisions are illusory. As to what was the defect noted, or what prevented the appellants from curing the defect or in approaching the learned Single Judge complaining of inaction in complying with the directions is not mentioned in the petition.

W.A.Nos.1926 of 2025 & connected cases :17: 2025:KER:97426

13. As rightly held by the learned Single Judge, the Act provides an efficacious alternative remedy through a tiered appellate mechanism, including a second appeal and further recourse to the High Court. It is well-settled that the extraordinary writ jurisdiction under Article 226 of the Constitution of India is not to be invoked to circumvent or short-circuit statutory procedures, save in exceptional and extraordinary circumstances where statutory remedies are wholly inadequate or ill-suited to address the grievance, and even then, only for compelling reasons.

14. In United Bank Of India v. Satyawati Tondon And Others7, the Hon'ble Supreme Court observed as under in paragraph 43 of the judgment:

43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

(2010) 8 SCC 110 W.A.Nos.1926 of 2025 & connected cases :18: 2025:KER:97426

44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.

15. In the case on hand the appellants have elected to approach the Appellate Remedy and after remitting the requisite fee have approached this Court with the Writ Petition. The situation in the said circumstances is even more precarious. On that preliminary ground itself, we find no reason to entertain the Writ Petition.

16. In order to persuade this Court that the order passed by the adjudicating authority is fraught with a jurisdictional error, it was contended that the immovable properties which have now been attached have all been purchased W.A.Nos.1926 of 2025 & connected cases :19: 2025:KER:97426 before the commission of the alleged crime and therefore will not fall within the ambit of "proceeds of crime" as defined under Section 2(1)(u) of the PMLA Act. In view of the vehement submissions made before us, we shall deal with the said question to clear the issues.

17. "Proceeds of Crime" has been defined under Section 2(1)(u) of the Act. The said provision reads as under:

Section 2 (1) (u)- "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad;

[Explanation.--For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. ( emphasis supplied )

18. The word "property" which is classified as a noun, finds a place in Section 2(1)(u). The said provision reads as under:

Section 2(1) (v)- "property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located; W.A.Nos.1926 of 2025 & connected cases :20: 2025:KER:97426 [Explanation.--For the removal of doubts, it is hereby clarified that the term "property" includes property of any kind used in the commission of an offence under this Act or any of the scheduled offences;

19. Value has been defined under Section 2 (1) (zb). It reads as under:

2 (1) (zb)- "value" means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person.

20. Now we shall come to the provisions dealing with attachment. Section 5 of the Act provides for Attachment. The said provision reads as under:

           Section       5:         Attachment     of   property     involved    in
           money-laundering.--

(1)Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that--

(a) any person is in possession of any proceeds of crime; and

(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:

W.A.Nos.1926 of 2025 & connected cases :21: 2025:KER:97426 Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:

Provided further that, notwithstanding anything contained in 1 [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.

[Provided also that for the purposes of computing the period of one hundred and eighty days, the period during which the proceedings under this section is stayed by the High Court, shall be excluded and a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted.;

(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such W.A.Nos.1926 of 2025 & connected cases :22: 2025:KER:97426 period as may be prescribed.

(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under 3 [sub-section (3)] of section 8, whichever is earlier.

(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.--For the purposes of this sub-section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.

(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority

21. The learned counsel appearing for the appellant, relying upon the observations of the learned Single Judge in Satish Motilal Bidri (supra), contended that the expression "value" occurring in Section 2(1)(u) can only refer to the monetary worth of the property directly derived from criminal activity. It was further argued that attachment to the extent of the monetary value of a property not derived from criminal activity is permissible under the PMLA only where the property derived from such criminal activity has been taken out of India or is held outside the country. In other words, according to the appellant, the power to W.A.Nos.1926 of 2025 & connected cases :23: 2025:KER:97426 proceed against property of equivalent value, having no nexus with the predicate offence, arises only when the tainted property is located abroad.

22. The aforesaid submission appears to have been advanced without due consideration of the binding pronouncement of the Constitution Bench of the Supreme Court in Vijay Madanlal Choudhary (supra). In that case, an identical contention that attachment of property equivalent in value is permissible only when the proceeds of crime are situated outside India was expressly raised and rejected. Paragraph 172 of the judgment reads thus:

"It was also urged before us that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India. This argument, in our opinion, is tenuous. For, the definition of 'proceeds of crime' is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of 'property' as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such interpretation would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering."

23. To place the issue beyond doubt, it is apposite to deconstruct the definition of "proceeds of crime" into three distinct components:

W.A.Nos.1926 of 2025 & connected cases :24: 2025:KER:97426

(i) property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence;

(ii) the value of any such property; and

(iii) where such property has been taken or held abroad, any other property of equivalent value, whether held in India or abroad.

24. It is evident that the legislature has consciously incorporated the mechanism of provisional attachment to address situations of urgency. A person engaged in criminal activity, intending to project the proceeds of crime as legitimate or untainted, would ordinarily act swiftly to place such assets beyond the reach of law. At the initial stage of investigation, the full extent and contours of the offence are often unclear. Such crimes are typically committed in secrecy and through layered transactions that may appear lawful on the surface. The true nature of the offence emerges only after a detailed investigation, which necessarily takes time. Until then, the precise quantum of wrongful gain cannot be accurately determined. Provisional attachment is therefore intended to secure suspect assets and ensure their availability for effective enforcement.

25. Of the three categories of attachable property, the first unmistakably falls into the category of property that is tainted. This category comprises property for which there is prima facie material showing that its source or consideration is traceable to criminal activity relating to a scheduled offence. The essence of the offence of money-laundering lies in the projection of such tainted property as W.A.Nos.1926 of 2025 & connected cases :25: 2025:KER:97426 untainted. This category also includes property acquired by using tainted property as consideration, whether directly or indirectly. For instance, a bribe or illegal gratification received by a public servant in cash constitutes tainted property and, therefore, proceeds of crime. If such cash is used to purchase immovable property or is converted into cryptocurrency or any other valuable asset, the resultant asset/property would equally constitute proceeds of crime, having been indirectly derived from criminal activity.

26. The second and third categories ordinarily consist of property that may be untainted in origin and acquired through legitimate means. Such property is nonetheless brought within the statutory fold where the tainted assets are untraceable, unreachable, or insufficient to account for the pecuniary advantage derived from the criminal activity. It is for this reason that the statute mandates equivalence in value when such property is attached. Before confirmation of attachment, there must therefore be at least a tentative assessment of the value of the wrongful gain, unless such assessment is impracticable at that stage due to the complexity of the case. The final order of confiscation must always be confined to the value of the illicit gains.

27. The use of the expression "such property" in the second category clearly refers back to property of the nature described in the first category, the legislative intent being to permit attachment of other property of equivalent value where the tainted property itself cannot be traced. The absence of the words "any W.A.Nos.1926 of 2025 & connected cases :26: 2025:KER:97426 other property of equivalent value" in the second category does not dilute this intent, particularly when read in harmony with the third category. It would be apposite to remember that property would mean any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located, and is not limited to immovable property.

28. Consequently, where the enforcement authority is unable to trace the tainted property, it is lawfully entitled to proceed against other property of the accused under the second or third category, provided such property is of near or equivalent value to the proceeds of crime. To ensure fairness and proportionality, the authorised officer must assess, even if tentatively, and periodically re-evaluate the quantum of proceeds of crime as the investigation progresses. Attachment must be limited to assets of equivalent value, and eventual confiscation must be strictly confined to the illicit gains. The burden of proving facts to the contrary lies on the person asserting them.The above view taken by us gets support from the law laid down by the Delhi High Court in The Deputy Director Directorate of Enforcement Delhi v. Axis Bank 8.

29. Though the Two Judge Bench of the Apex Court in Pavana Dibbur (supra), held that the property acquired before the commission of the alleged 8 2019:DHC:1887 W.A.Nos.1926 of 2025 & connected cases :27: 2025:KER:97426 offence cannot be proceeded under the PMLA, 2002, the above view was taken without reckoning the interpretation of law laid down by the binding Three Judge Bench of the Apex Court in paragraph 172 of Vijay Madanlal (supra). The Hon'ble Supreme Court in Vijay Madanlal (supra) repelled the argument that the attachment of property must be equivalent in value of the proceeds of crime only if the proceeds of crime are situated outside India and went on to hold that the definition of "proceeds of crime" is of wide amplitude and includes not only property directly derived from criminal activity but also the value of such property. If the property is taken or held outside the country, even in such a case, the property equivalent in value held within the country or abroad can be proceeded with. The definition of 'property' as in Section 2(1)(v) is equally wide enough to encompass the value of the property of proceeds of crime. Such an interpretation advances the legislative objective of attachment and confiscation of proceeds of crime, which is the core purpose of the PMLA. The Court emphasised that the statutory scheme is designed to reach the proceeds of crime regardless of the form they take or the person in whose name they are held, and that statutory interpretation must further the object of the legislation rather than defeat it by a narrow or pedantic construction.

30. In the case on hand, it can be seen from the impugned orders that the competent authority has assessed the tentative value of the wrongful gain and has also determined the value of the property which is required to be attached for W.A.Nos.1926 of 2025 & connected cases :28: 2025:KER:97426 the purpose of eventual confiscation, if required. The said exercise is in tune with the statutory provisions.

In view of the discussion above, we find no reason to interfere with the judgment rendered by the learned Single Judge. These appeals are dismissed. It would be open to the appellants to pursue the appeals before the Appellate Tribunal in accordance with law, if so advised.

                                                            sd/-      
                                                   RAJA VIJAYARAGHAVAN V,
                                                               JUDGE


                                                            Sd/-
                                                      K.V. JAYAKUMAR,
                                                           JUDGE

PS/18/12/25

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