The Orissa High Court has held that an administrative communication from the Enforcement Directorate (ED), without a statutory attachment order or a restraint imposed by a competent court, cannot by itself justify refusal to register a property sale deed.

The bench of Justice Sashikanta Mishra set aside the orders of the Sub-Registrar and the ADM-cum-District Registrar, Balasore, which had prevented registration of a sale deed on the basis of an ED letter requesting that the ownership status of the property should not be changed. 

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The bench directed registration within three days of production of a certified copy of its judgment, subject to compliance with all statutory requirements.

The dispute concerned property in Balasore that was originally owned by Torrento Hotels and subsequently purchased by Micro Hotels Pvt. Ltd.

The property formed part of the background to criminal proceedings involving the Micro Finance Group of Companies. In July 2017, the trial court convicted the group’s managing director, Durga Prasad Mishra, and imposed sentences for offences under the Indian Penal Code and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The judgment also directed payment of ₹215 crore as compensation to unpaid depositors after realisation in accordance with law.

To facilitate payment of compensation, the Special CJM (CBI), Bhubaneswar, permitted sale of the property by an order dated October 6, 2018. The permission required the sale proceeds to be used towards the compensation awarded in the criminal case, with any residual amount deposited in the company’s account.

The petitioners subsequently acquired the property through a sale deed. The High Court recorded that the deed had been registered, the transaction was reflected in the encumbrance certificate, and the record of rights had been issued in their favour. The sale proceeds were deposited in the Special Treasury as directed by the trial court.

Further Sale Blocked on Registration Portal

On December 23, 2025, the petitioners presented a further sale deed for registration, involving a stated consideration of ₹4,49,280. They had paid stamp duty of ₹17,980.

The registering authority refused registration, relying on non-payment of registration fees and an ED communication dated August 19, 2022. That communication requested that any change in the ownership status of the property should not be allowed at the instance of its registered owner, Micro Hotels Pvt. Ltd., pending confirmation from the ED.

The State maintained that the property had been blocked in the e-registration portal because of the ED communication. It argued that the ongoing money-laundering investigation affected the property’s marketability, notwithstanding the earlier judicial permission for its sale.

The petitioners challenged the refusal before the District Registrar, but their appeal was rejected on May 13, 2026. They then approached the High Court.

Examining the authorities’ reliance on the Prevention of Money Laundering Act, 2002 (PMLA), the High Court noted that Section 5 provides the mechanism for provisional attachment, while Section 8 governs adjudication and confirmation of attachment.

However, neither the registration refusal nor the appellate order disclosed that a provisional attachment order had been passed in respect of the property. No material was placed before the Court showing confirmation of an attachment by the Adjudicating Authority. Nor was any order of a competent court restraining transfer brought to its notice.

The Court found that the ED letter was merely an administrative request. It did not refer to an attachment under Section 5 or confirmation under Section 8.

The wording of the letter, requesting that a change in ownership “may not be” allowed, could not be treated as an attachment order. If the competent authority intended to restrain the property under the PMLA, it had to exercise its statutory powers in accordance with the Act.

The registering authority could not supply that missing legal foundation by treating the communication itself as a binding restraint.

The High Court held that the mere pendency of a PMLA investigation, or an allegation that property constitutes proceeds of crime, does not automatically prohibit registration.

Questions concerning whether a property represents proceeds of crime, whether money-laundering offences are attracted, and whether attachment is warranted must be considered by the authorities constituted under the PMLA. A registering officer has no jurisdiction to decide those questions.

The Court also noted that the ED communication referred to the former owner. On its findings, the property had already passed to the petitioners, but the Sub-Registrar had not informed the ED of that change.

The registration authorities had relied on Section 22-A(1)(a)(ii) of the Registration Act as amended in Odisha. The High Court pointed out that this provision concerns property belonging to religious institutions governed by the Odisha Hindu Religious Endowments Act, 1951. It had no application to the property in dispute.

The Court separately considered Section 22-A(1)(c), which permits refusal where a State or Central enactment prohibits alienation or transfer. It found no actual and subsisting statutory prohibition in the present case.

The authorities’ reliance on Section 52 of the Transfer of Property Act was also rejected, as no case relating to the property was shown to be pending before a court.

On non-payment of registration fees, the High Court accepted that this was a valid ground, but held that the defect was curable by requiring the presenter to comply with the statutory requirement.

Relying on the Supreme Court’s decision in K. Gopi v. Sub-Registrar, cited in the judgment as (2026) 2 SCC 696, the High Court reiterated that registering officers have no adjudicatory power to determine an executant’s title.

The Court criticised the appellate authority for undertaking an interpretative exercise concerning proceeds of crime and potential attachment proceedings, instead of confining itself to its statutory registration functions.

Apprehensions that registration might affect future confiscation proceedings or expose officials to administrative scrutiny could not substitute for a lawful prohibition.

Allowing the writ petition, the High Court set aside the impugned orders and directed registration within the prescribed three-day period, subject to fulfilment of statutory requirements. The ruling addresses refusal based on an administrative ED communication where no enforceable attachment or judicial restraint was demonstrated. 

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