Chargesheet Not Pre-condition Under PMLA: Delhi High Court Upholds Provisional Attachment Of Lawyer Gautam Khaitan’s Property

The Delhi High Court has upheld the provisional attachment of Lawyer Gautam Khaitan’s property and held that the chargesheet is not precondition under Prevention of Money Laundering Act (PMLA). A Division Bench of Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar while reiterating the broad scope of the Enforcement Directorate’s powers under the Prevention of Money Laundering Act (PMLA), upheld the provisional attachment order (PAO) issued in connection with the alleged kickback scandal relating to the procurement of VVIP helicopters from AgustaWestland The appellants had questioned the legality of the PAO issued on November 15, 2014, arguing that it was passed without the filing of a chargesheet in the predicate offence and without adequate material to justify the ED’s belief. They further contended that amendments to Section 5 of the PMLA could not be applied retrospectively. The proceedings arise out of the alleged corruption and money-laundering trail linked to the Rs. 3,600-crore VVIP chopper deal. According to investigative agencies, the mandatory service ceiling for the tender was reduced from 6,000 metres to 4,500 metres, allowing AgustaWestland to qualify. It is alleged that the relaxation was procured through illicit payments routed through a complex web of companies. The ED claims that illegal gratification paid by AgustaWestland to two Italian intermediaries—Guido Haschke and Carlo Gerosa—was funneled into India through various corporate structures, including IDS Infotech (India), its Tunisian subsidiary IDS Sarl, and Aeromatrix Info Solutions Ltd. Searches conducted at the premises of one of the appellants in September 2014 led to seizure of jewellery and properties, eventually resulting in the provisional attachment. The appellants argued that a provisional attachment could not be issued without a chargesheet under Section 173 CrPC in the scheduled offence, as required under the unamended Section 5(1) of the PMLA. Amendments in 2015—which clarified that a chargesheet is not mandatory before attachment—could not be applied retrospectively, as they substantially altered property rights under Article 300A. The ED lacked adequate material to form a “reason to believe” that immediate attachment was necessary. The Single Judge, while dismissing the petition on the ground of alternative remedy, ought not to have made observations on merits. The Enforcement Directorate contended that the second proviso to Section 5(1), inserted in 2013, independently empowers attachment even without a chargesheet if immediate action is required. The argument of mandatory chargesheet would render the proviso “meaningless,” contrary to legislative intent. The attachment was supported by cogent material, including financial trails, statements, and the timing of property acquisitions. Courts exercising writ jurisdiction should avoid interfering with provisional attachment orders when statutory remedies under Sections 8, 26, and 42 of PMLA exist. Relying on its recent precedent in Directorate of Enforcement v. Hi-tech Merchantile India Pvt. Ltd. (2025), the Bench held the first proviso to Section 5(1) requires a report under Section 173 CrPC only when the attachment is based under that proviso. The second proviso, however, allows attachment based solely on the ED’s “reason to believe” that non-attachment would frustrate proceedings. After the 2013 amendment, the requirement that the person must be “charged” with a scheduled offence (earlier clause ‘b’) was deleted, expanding ED’s powers. Thus, the argument that a PAO before a chargesheet is void was rejected. The Court noted that the PAO was not passed arbitrarily, as the ED had material showing flow of funds from AgustaWestland to IDS India and its Tunisian arm. Subsequent routing through Aeromatrix and related entities. Acquisition of properties by one of the appellants during the relevant period. The Bench found that the attachment was a preventive, temporary measure, and the adequacy of material can be fully tested before the Adjudicating Authority. The Court observed that the PMLA provides a complete appellate framework, and writ petitions against PAOs can “circumvent the legislative scheme” if entertained routinely. The Single Judge’s discussion of merits was justified because the appellants themselves pressed for adjudication on those points. The High Court upheld the Single Judge’s order and dismissed the appeal, clarifying that its observations are limited to the scope of the appeal and should not prejudice subsequent proceedings before any other forum. Case Details Case Title: Gautam Khaitan & Anr. Versus Union Of India & Anr. Case No.: LPA 72/2015, CM APPL. 2627/2015 & CM APPL. 13983/2017 Date: 15.11.2025 Counsel For Petitioner: Ramesh Singh, Senior Advocate Counsel For Respondent: Himanshu Pathak Click Here To Read Order Read More: Registration Of Document Recording Purchase Of Immovable Property Doesn’t Confer Guaranteed Title Of Ownership: Supreme Court

Chargesheet Not Pre-condition Under PMLA: Delhi High Court Upholds Provisional Attachment Of Lawyer Gautam Khaitan’s Property

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