Rule 3A(4) Bars PMLA Restoration Order Without Giving An Opportunity Of Hearing To Property Owner: Delhi High Court

The Delhi High Court has held that Rule 3A(4) of the Prevention of Money Laundering Act (PMLA) explicitly bars restoration order without giving an opportunity of hearing to property owners. The bench of Justice Sanjeev Narula has observed that Rule 3A(1) contemplates consideration by the Special Court “after framing of the charge” under section 4 of PMLA, and further contemplates publication of a notice in two daily newspapers calling upon claimants to submit and establish claims. Rule 3A(4) creates an explicit bar: no restoration order shall be passed without giving an opportunity of hearing to the owner of the property. The bench stated that where a restoration direction operates upon identified attached property, and an affected owner asserts a stake, the Special Court must, at the minimum, issue notice and afford a fair opportunity of being heard. An order passed without such opportunity cannot be sustained, quite apart from the broader principle of audi alteram partem. The petitioners confined their challenge to Asset No. 6 in Table 27 of the Provisional Attachment Order, which pertained to 17% equity shares of Solitaire Security Services Private Limited, valued at approximately ₹108.04 crore. These shares formed part of assets provisionally attached by the ED in an ongoing money laundering investigation. Senior Advocate Rebecca John, appearing for the petitioners, argued that the Special Court could not have entertained or allowed an application for restoration “during trial” without adhering to the Prevention of Money Laundering (Restoration of Confiscated Property) Rules, 2016, particularly Rule 3A. It was contended that Rule 3A(1) contemplates consideration of restoration only after framing of charges under Section 4 of the PMLA and publication of public notice calling for claims. Rule 3A(4) expressly bars passing of any restoration order without giving an opportunity of hearing to the owner of the property. The petitioners submitted that no notice was issued to them, no opportunity of hearing was granted, and the impugned order did not record any submissions on their behalf, despite the fact that their proprietary interests were directly affected. Senior Advocate N. Hariharan, appearing for Respondent No. 2 (Greenopolis Welfare Confederation), stated on instructions that there was no objection to remanding the matter to the Special Court for fresh consideration, limited to Asset No. 6. This statement was recorded as being without prejudice to objections on merits and locus of the petitioners. The High Court found the challenge to be well-founded and held that the impugned order could not be sustained insofar as it related to the equity shares in question. Justice Narula emphasized that compliance with Rule 3A, especially the right of hearing to affected owners, is mandatory and admits of no dilution. Even assuming that the Special Court was competent to consider restoration at the relevant stage, no restoration order could be passed without hearing the property owner, in line with Rule 3A(4) and the principles of natural justice. The absence of notice and hearing rendered the order legally unsustainable. The High Court set aside the Special Court’s order dated November 27, 2025, limited to Asset No. 6 (17% equity shares of Solitaire Security Services Pvt. Ltd.). Remanded the application under Section 8(8) PMLA to the Special Court for fresh consideration strictly in accordance with Rule 3A. Clarified that all rights and contentions of the parties, including objections on maintainability, stage, and locus, remain open. The Court permitted the petitioners to file their reply to the restoration application within three weeks, with rejoinder to follow within two weeks thereafter. The parties have been directed to appear before the Special Court on February 23, 2026, with a request to decide the application expeditiously. Case Details Case Title: Richa Bharadwaj & Anr. Versus ED Case No.: CRL.REV.P. 539/2025 & CRL.M.As. 38180-38183/2025 Date: 23.12.2025 Counsel For Petitioner: Rebacca John Counsel For Respondent: Vivek Gurnani Click Here To Read Order Read More: Money Laundering Case Not Maintainable Once Predicate FIRs Are Closed: Calcutta High Court

Rule 3A(4) Bars PMLA Restoration Order Without Giving An Opportunity Of Hearing To Property Owner: Delhi High Court

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Rule 3A(4) Bars PMLA Restoration Order Without Giving An Opportunity Of Hearing To Property Owner: Delhi High Court

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