Ancestral Property Not Immune From PMLA Attachment: Delhi High Court

The Delhi High Court has held that ancestral or inherited property is not automatically immune from attachment if it represents the “value of proceeds of crime.” The Bench of Justice Navin Chawla and Justice Ravinder Dudeja has observed that dismissed an appeal challenging the attachment of a residential property in Delhi, affirming the powers of the Directorate of Enforcement (ED) under the statute. The appeal assailed the order dated November 27, 2025, passed by the Appellate Tribunal under the PMLA, which had upheld the confirmation of a Provisional Attachment Order dated July 28, 2017, issued by the ED. The attached property—located at 255, Sainik Vihar, Pitam Pura, Delhi—was claimed by the appellant to be ancestral in nature. It was argued that the property had been purchased in 1991 by the appellant’s father from his own funds in the joint names of the father and the appellant. According to the appellant, he had not contributed any money toward its acquisition, and therefore, it could not be treated as “proceeds of crime.” The appellant contended that since the property was neither derived from nor acquired through criminal activity relating to a scheduled offence, it could not fall within the ambit of Section 2(1)(u) of the PMLA. The appellant relied on the decision of the Karnataka High Court in H.M. Malthesh v. Directorate of Enforcement (2020) and the Supreme Court’s ruling in Supreme Court of India in Pavana Dibbur v. Directorate of Enforcement (2023) 15 SCC 91. It was argued that property acquired prior to the commission of a scheduled offence cannot be attached and that only tainted property directly linked to criminal activity qualifies as “proceeds of crime.” On the other hand, the ED submitted that the proceeds of crime generated by the appellant had been remitted abroad in the form of foreign exchange and were not traceable. Therefore, the subject property was attached as “equivalent value” under Section 5 read with Section 2(1)(u) of the PMLA, which expressly permits attachment of property equivalent in value when the actual tainted property is unavailable. The Bench examined the statutory definition of “proceeds of crime” under Section 2(1)(u) of the PMLA, which includes not only property derived directly or indirectly from criminal activity but also “the value of any such property,” and, where such property is held outside India, property equivalent in value held within or outside the country. Relying heavily on the landmark judgment of the Supreme Court of India in Vijay Madanlal Choudhary v. Union of India(2022), the Court observed that the definition of “proceeds of crime” is wide and includes equivalent value properties where the original tainted assets cannot be traced. The Court also referred to its own earlier ruling in Prakash Industries Ltd. v. Directorate of Enforcement (2022) and the decision in Deputy Director, Directorate of Enforcement v. Axis Bank & Ors. (2019), which clarified that untainted property can be attached as equivalent value, provided the attachment corresponds to the value of the proceeds of crime. Rejecting the appellant’s core argument, the Court held that the mere fact that a property is ancestral or inherited does not grant it immunity under the PMLA. The statute does not carve out any exception for ancestral property, and therefore, such assets can be attached if they represent equivalent value of proceeds of crime. “The plea of the property being ancestral does not ipso facto grant immunity from attachment under the PMLA,” the Bench observed, adding that the argument to the contrary was “misconceived and contrary to the scheme of the Act.” The Court further noted that the Adjudicating Authority had recorded a finding, upon appreciation of evidence, that the property represented value equivalent to proceeds of crime generated from scheduled offences. No perversity or illegality was found in the findings of the Adjudicating Authority or the Appellate Tribunal. Concluding that the Tribunal had exercised its jurisdiction properly and that the impugned order reflected due application of mind and adherence to statutory requirements, the Court dismissed the appeal along with pending applications. Case Details Case Title: Arun Suri Versus ED Citation: JURISHOUR-93-HC-2026(Del) Case No.: MISC. APPEAL (PMLA) 13/2026 Date: 16/02/2026 Counsel For Petitioner: Shubail Farook Counsel For Respondent: Anupam S. Sharrma Click Here To Read Order Read More: Income Tax Reopening Over Rs. 1.59 Crore Cash Deposits Dropped After PAN Found Wrongly Linked; No Addition Made

Ancestral Property Not Immune From PMLA Attachment: Delhi High Court

Membership Required

Latest articles

Verification Reports Must Be Shared Before Adjudication: Bombay High Court Quashes GST Order Against Pidilite

GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

Service Tax Demand on Electricity Distribution Utility Quashed; CESTAT Holds Ancillary Services Exempt

More like this

Verification Reports Must Be Shared Before Adjudication: Bombay High Court Quashes GST Order Against Pidilite

GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

About us

Company

Categories

Ancestral Property Not Immune From PMLA Attachment: Delhi High Court

Membership Required

Latest articles

Verification Reports Must Be Shared Before Adjudication: Bombay High Court Quashes GST Order Against Pidilite

GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

Service Tax Demand on Electricity Distribution Utility Quashed; CESTAT Holds Ancillary Services Exempt

More like this

Verification Reports Must Be Shared Before Adjudication: Bombay High Court Quashes GST Order Against Pidilite

GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

About us

Join Our Newsletter

Company

Categories