The Orissa High Court has directed a fresh valuation of two vehicles seized by the Enforcement Directorate before determining the fixed deposit security required for their release to the registered owner. The Court modified an order requiring security of ₹55.50 lakh, observing that the Special Court ought to have obtained a recent valuation instead of relying on an older report.
The bench of Justice G. Satapathy retained the requirement that the owner furnish a fixed deposit receipt from a nationalised bank equivalent to the vehicles’ current value, in the name of the Director of Enforcement. The Court did not accept the petitioner’s request to substitute property surety for the FDR.
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The proceedings concerned a Tata Harrier and a BMW registered in the petitioner’s name. According to the judgment, the ED seized the vehicles in connection with a money-laundering case, treating them as part of the alleged proceeds of crime.
The vehicles were provisionally attached under Section 5 of the Prevention of Money-laundering Act, 2002, on December 29, 2021, and January 31, 2023. The Adjudicating Authority subsequently confirmed the attachments through orders dated August 18, 2022, and June 30, 2023.
The High Court recorded that the petitioner had not challenged these attachment orders before any forum.
As the vehicles’ condition deteriorated and their value diminished, the ED sought permission to sell them under Rule 4(2) of the Prevention of Money-Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013. The agency maintained that maintenance expenses were likely to exceed their value in the near future.
On August 20, 2026, the Special Judge, CBI-1, Bhubaneswar, permitted their sale. However, the Special Court also allowed the owner to take possession by furnishing an FDR of ₹55.50 lakh from a nationalised bank at Bhubaneswar, in the name of the Director of Enforcement, on or before September 15, 2026.
The owner challenged this order through a criminal revision petition.
The petitioner argued that the valuation relied upon by the Special Court was old and that the vehicles continued to lose value while exposed to the weather.
He sought interim custody to preserve their utility and requested permission to furnish property surety instead of the FDR directed by the Special Court.
Opposing the revision, the ED submitted that Rule 4(2) provided for retention of the vehicles against an FDR equivalent to their value. It defended the Special Court’s order and sought dismissal of the petition.
The High Court examined the second proviso to Rule 4(2), which addresses movable property constituting a mode of conveyance.
The provision permits the authorised officer, after obtaining a valuation report from the Motor Licensing Authority or another appropriate authority, to accept and retain an FDR from a nationalised bank equivalent to the property’s value.
The security must be in the name of the Director of Enforcement. A report must then be sent to the Special Court or the Adjudicating Authority for information and appropriate action.
The Court also considered Sections 5 and 8 of the PMLA concerning provisional attachment, confirmation of attachment, and orders relating to confiscation or release.
It referred to Section 8(7), which addresses situations where a trial cannot be conducted or, after commencement, cannot be concluded. Reading the provisions together, the Court recognised the Special Court’s power to direct release of seized property, including vehicles, to a person claiming entitlement to possession.
Applying this framework, the High Court held that the petitioner could retain the vehicles upon producing an FDR from a nationalised bank equivalent to their value.
The High Court identified the valuation used to determine the security amount as the aspect requiring modification.
The Special Court had relied on a valuation report dated March 17, 2025. The High Court observed that it ought to have obtained a recent report before passing the order.
Consequently, the earlier figure of ₹55.50 lakh will not automatically govern the petitioner’s opportunity to secure possession. The required FDR must correspond to the vehicles’ value established through the fresh valuation.
The High Court did not itself fix a revised amount or direct a particular reduction. It required a fresh assessment before the Special Court passes its consequential order.
The Court explained that the petitioner could retain the vehicles by furnishing the prescribed FDR within a reasonable time.
If he failed to furnish the security, the authorised officer could sell the vehicles with leave of the Special Court or the Adjudicating Authority, as applicable.
The judgment further stated that the sale proceeds could be deposited in the nearest Government Treasury or placed in fixed deposit with a branch of the State Bank of India, its subsidiaries, or another nationalised bank, with the receipt retained.
The operative direction requires the vehicles to be dealt with according to the applicable law and rules if the petitioner does not furnish the required FDR.
Disposing of the criminal revision, the High Court directed the Special Judge, CBI-1, Bhubaneswar, to obtain a fresh valuation report and provide the petitioner an opportunity to furnish an FDR equivalent to the recent value of both vehicles.
The Special Court must pass an appropriate order within 15 days of receiving the valuation report, after providing an opportunity to both the petitioner and the ED.
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